Business Column

How brick-and-mortar retail in Syracuse can survive and thrive in the age of online shopping

Nowadays, something seems off if a week goes by and there isn’t another article about a brick-and-mortar retail company closing its doors. Store closures have become the new norm.

Global mega retailer Macy’s recently announced it is slated to close about 15 percent of its locations in the United States. The Macy’s store in Clay’s Great Northern Mall, which is located about 20 minutes from Syracuse University’s campus, will close April 18. Closer to home, one of Destiny USA’s clothing stores, Wet Seal, will soon shut down, two years after the retailer first declared bankruptcy. The mall’s Hallmark Gold Crown closed its doors less than two weeks ago. And one of its original clothing stores, The Limited, closed shop in December.

There are numerous examples of retailers closing nationwide, with many locations in the Syracuse area, raising the question of what it takes for a retail store to survive in a digital age. The answer is bringing the traits of the physical experience to the virtual online space and building on brand identity.

For the past 30 years, the main strategy retailers have used to grow revenues is opening new store locations. With so many retailers in direct competition with one another, many companies felt they had to expand to compete — and ultimately survive. The overexpansion created a ticking time bomb, and the emergence of online shopping set it off.

“There are a couple of reasons for the increase in store closures,” said Ray Wimer, professor of retail practice in the Martin J. Whitman School of Management at SU. “The retail environment has been over-stored for quite sometime and the rise of e-commerce is impacting in store sales.”

As the consumer preference has shifted from in-person to online shopping, competitive new companies have emerged. The vast amount of resources and tools the web offers has given independent brands the opportunity to expand their businesses. Micro-brands that sell their products exclusively online have also emerged and are competing with large retailers for business.

Despite the issues retailers are facing, there are ways for these companies to weather the storm. Online sales have been pulling customers away from brick-and-mortar shopping, but retailers have developed ways to pull them back.

One method retailers are using to attract customers is the omni-channel strategy. The goal of an omni-channel strategy is to provide customers with a seamless retail experience no matter where they are shopping from — whether it’s online or in the store — and this is exactly the beginning of the path toward in-store and online unity more companies should be willing to embrace.

As part of this strategy, retailers are starting to offer the option for customers to order online and pick up their purchase in stores. This helps brings customers into the store, which opens up the opportunity to expand the customer’s initial purchase.

The primary goal of the omni-channel strategy is to add to the online sale with an in-store purchase. The idea is that the customer may see another item that they are interested in purchasing by coming into the physical store. This also provides the company with a safety net opportunity, so if customers don’t like the original product they ordered, they have the opportunity to swap out that product for a different one within the store.

Retailers are also scaling back retail space in order to cut costs. There is about 23 square feet of retail space per person in the U.S., according to Cushman & Wakefield’s Global Cities Retail Guide. This is double the retail space that exists in Canada and Europe, according to the guide.

Retailers are not making enough money to keep up with the cost of owning such large spaces. To offset that cost, many retailers are exploring the option of reducing the size of their stores so they can afford to keep them open.

The omni-channel strategy is helping to bring some customers into the store, but there needs to be a new approach developed to the brick-and-mortar retail business. Companies should look deep into their brand’s history and create experiences for their customers that revolve less around their products and more around the lifestyle of their customers, and offer this experience in the store.

In the future, the proportion of retail sales from brick-and-mortar locations and online is going to flip. Online sales are going to outpace brick-and-mortar retail sales, but this doesn’t mean that online shopping will entirely replace brick-and-mortar stores.

Physical locations are the hubs of how these retail brands have developed since their inception. The key for companies to survive will be how they can integrate their online experience to represent the same thing.

Daniel Strauss is a sophomore entrepreneurship and finance double major. His column appears weekly. He can be reached at


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