Resurgence of the physical channel.

• Author: Hall, Robert
• Position: Marketing Solutions - Brief Article

Shortly before Christmas, I walked into a store and had an experience that tells me that 2002 could become the "Year of the Store." The resurgence of the physical or people channel--neglected during the rise of the Internet--may be coming:

* The war of the channels is over. The perceived conflict about which channel would "win" is dead. Customers want all of them.

* Online shopping is maturing. This year for the first time the profile of Internet users is starting to minor that of offline consumers.

* There is research (cited here previously) that says the physical channel seems to be the better driver of revenue and profits.

The place I visited was Restoration Hardware, a freestanding store near the Galleria mall (my destination), and I parked in its lot only to skirt the mall traffic. As I slipped through the store, I was unexpectedly captivated. I made several purchases, then went back for more and marveled to friends ever since.

What Restoration Hardware does is hard, yet the store does it well:

They merchandise effectively. Much of the subtleties of their displays, groupings and signage probably escaped me, but, the fact is, I meant to use the store as a corridor to the mall, nothing more. Good websites do the same thing. I never mean to linger online anywhere, so when I do, there's bound to be some effective site merchandising at work.

It is hard to compete with online providers' product inventory and robust search mechanisms. But Restoration Hardware seems to have nailed that by solving what is for me and my ilk the hardest part of gift-shopping: the idea. All good providers solve problems, but they have carved out their niche with ideas that solve the really tricky problems--those that customers did not know they had until somebody puts the solution in front of them.

Until I saw a classy brass thermometer mounted head-high in the store, I had no idea how much I missed checking the temperature every day as I did years ago in the country. Until my wife saw a self-coiling hose in the store's garden grouping, she had never noted her daily difficulties with our ordinary hose. I took the time to watch other customers who appeared to be having the same experience...