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How Digital Disrupted the Brick-and-Mortar World

Change is never easy, particularly in the world of business. Today, markets once dominated by massive corporations, with retail locations from Los Angeles to Boston and cities big and small in between, are being upended by lean, agile players that have figured out how to leverage the power of new technology.

With few exceptions, digital disruption has affected virtually every industry, leaving those incapable of adapting behind and likely on the brink of extinction. But with the right mindset and strategies in today’s digital-centric world, this can be less of a disaster and more of an opportunity. To forge a better path forward, business owners should stay attuned to the changing leaves and heed examples of the recent past.

The following industries and companies offer some enlightening insight into how the business world has been transformed and how to avoid the fate of those brick and mortars that have proven unable to adjust.

Record Stores

They say video killed the radio star. While that might be debatable, what is certain is that the world of digital downloads and online music streaming quickly destroyed the business model that was used to prop up the countless record, cassette and CD stores across the nation.

Tower Records on the Sunset Strip was once a Los Angeles institution, and the Virgin Megastore in Times Square was just as famous. Now, due to Steve Jobs’ innovation and the technology that allowed physical media to be reduced to small computer files, these once-popular retail outlets, over time, slowly faded away.

Video Rental Stores

Remember Blockbuster? Back in the day, going to video rental stores was a way of life for a whole generation of Americans and the only avenue to pick up and return home to watch new Hollywood releases or old-time classics.

But around the turn of the century, as technology began to make its massive leap forward, the Blockbusters and Hollywood Videos of the world failed to envision a rapidly emerging digital-first future.

Instead of looking to adopt digital delivery, Blockbuster doubled down on physical expansion and continued to open new retail locations, leaving the company susceptible to business disruption, first from the likes of Redbox and Netflix and then other brands that saw a new future emerging. Indeed, this story is a parable for others: Complacency can be deadly.

Indoor Shopping Malls

The same market forces that once weighed on other industries are taking their toll on retail, with Amazon and other online storefronts causing fewer and fewer people to do their shopping at the mall. The 1990s cultural rite of passage of spending all day walking around stores and loitering in the food court is no more for teens.

Instead, millennials and Gen Z tend to follow the brands they like on social media in order to pounce at the latest instant discount, then order online. Some tastemakers do still enjoy the experience of visiting brick-and-mortar storefronts, but they tend to prefer pop-up stores and other more chic options that aren’t housed in a giant showroom full of cheap wares.

And with changing fashion come changing cities. While malls and large outlet centers haven’t disappeared entirely, like specialized music and video stores, they are slowly dwindling — and things will never again be quite the same.

Call Centers

Facing an uphill fight, retailers are now increasingly looking to cut unnecessary costs and overhead expenses. In particular, this is leading more and more companies to abandon old business models that called for housing all back office and service personnel on-site.

These days, there are more and more options when it comes to using third-party service providers and a cloud call center to handle and address customer support duties that retailers can typically find better — and cheaper — results if they embrace the cloud.

By taking their business model online and shuttering massive big-box call center operations, cloud call centers can serve as a primer for companies to endorse a better and brighter future, rather than sticking with tried-and-true business practices that will lead them down a path toward increasing irrelevance.

Travel Agencies

Travel agencies have highlighted the mixed bag that exists for companies trying to transition to a new age. Nowadays, you won’t see many travel agencies in operation; after all, people who once relied on professionals to book flights, hotels and tourism packages in the 1980s and 90s can now turn to online resources and apps like Expedia and Airbnb.

While the competition for travel dollars is fierce — and people are less willing to pay additional booking fees — clever modern travel agencies are now bundling packages and using their expertise to craft custom excursions, providing travel enthusiasts more peace of mind and savings.

Learning from the Past

While no business is guaranteed to keep its doors open forever, steps can be taken over time to better entice and indulge consumers to keep coming back. Of course, dealing with changing times is never easy. But it doesn’t have to be the end all and be all, even for companies that have been traditionally tied to the days when brick and mortar reigned supreme.

The key is to always keep one eye looking forward and not get caught sleeping. In 2018, it may be better to recognize the murky waters that lie ahead and pivot when necessary, rather than stubbornly keep toiling away at a floundering business model that’s quickly becoming obsolete.

Photo Credit: Image provided by Social Monsters with permission to use. 

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