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Neighbors of Kane County

The future of brick-and-mortar business

Oct 28, 2016 11:06AM ● By Neighbors Magazines

by Ben Scott

The business world is changing at an astounding pace, with some experts predicting that about 65% of children entering grade school today will later work in roles that don’t currently exist. The evolution of technology and online shopping has left many people feeling nostalgic for the experience of patronizing small, locally-owned brick-and-mortar businesses. What does the future hold for such businesses in communities like St. Charles? Will brick-and-mortar stores still exist in the future?

“There’s a lot of camaraderie when it comes to retail,” says Dan Stellato, President of BEI Properties. “Fox Valley Volkswagen recently opened in St. Charles, and we helped them get a sales tax rebate. We were able to attract them because we have a pro business attitude.”

BEI has successfully managed properties in the Fox Valley for the last 28 years, and Stellato is proud of accomplishments like the development of the Geneva Commons and the new Walgreens in downtown Batavia. Stellato, who has also been an Alderman for 22 years, believes St. Charles will continue to attract new brick-and-mortar businesses in the years ahead.

“We’ve brought forth a business friendly community,” he says.

But Stellato also understands that community businesses need to be adaptable in order to thrive. E-commerce has a bigger footprint than ever, with about 40% of all sales happening online. The last few years in particular have seen a rise in online shopping figures, facilitated in part by a 4G network that allows consumers to shop on the go. Most people can buy most of what they need online, and it’s possible to imagine e-commerce closing the door on many small, community brick-and-mortar stores one day. Surprisingly, however, experts like NYU Marketing Professor Scott Galloway say this won’t happen anytime soon.

“The future of retail looks more like Macy’s than Amazon,” Galloway says. “Pure-play e-commerce doesn’t work for anybody. The world looks more like a multi-channel future.”

Stellato echoes Galloway’s sentiment about a multi-channel future, noting that Amazon now has plans to launch brick-and-mortar convenience stores.

“You’re seeing places like Amazon omni-channeling and opening grocery stores,” Stellato says. “The companies that do both are going to be the most successful.”

Some small businesses try to keep their overhead low with a solely online presence, but they often have too much competition in a digital domain that has become overcrowded and expensive. Businesses today are involved in a costly game of “bidding on keywords against large retailers to land on the first page of search results.” (

“It’s very hard to launch a brand these days that’s just online-only. It’s an incredibly difficult and crowded e-commerce environment,” says Sucharita Mulpuru, a retail analyst at Forrester Research. Mulpuru also notes that there are more than 800,000 online stores competing for customers through the gateway of Google.

Business owners who open brick-and-mortar stores alongside their online presence are able to increase brand awareness and develop a customer base in a space where retail options aren’t infinite. According to Galloway and Stellato, businesses will need to focus on this kind of omni-channel approach to target their customers and remain relevant in the years ahead. For their part, consumers also want a variety of choices when shopping for a product, and an omni-channel approach gives them more options by seamlessly combining digital and physical shopping experiences.

A article points to men’s clothing retailer Bonobos as another example of an omni-channel business that offers their consumers a unique experience; Bonobos customers get fitted by “guides” at brick-and-mortar locations, place their order online and get their fitted clothing delivered to their homes. Traditional brick-and-mortar businesses will need to follow the lead of retailers like Bonobos to remain viable in the future.

“Consumers aren’t coming to brick-and-mortar stores for the prices or the selection,” writes Chris Wadsworth in an article on “They’re coming for an experience.”

According to Wadsworth, businesses need to provide “personalized retail” experiences that are tailored to each visitor. Regardless of what they’re shopping for, today’s consumers expect businesses to know their interests and preferences. Businesses have the ability to gather this information through predictive analytics, which involves the study of current and historical consumer data that businesses use to launch personalized marketing campaigns. Through predictive analytics, business owners can learn the demographics and interests of the people who shop for their product.

In the future, artificial intelligence may play a bigger role in gathering this predictive information, even for small, community businesses. In an article titled “Future Trends From NRF: A Brick & Mortar Disruption,” marketing expert Tamara McCleary talks about the possibilities of IBM’s artificially intelligent Watson and how its “cognitive computing abilities allow it to look at vast amounts of data, much of which is unstructured…allowing for companies to understand their customers in profound new ways.” For instance, businesses in the future may have Watson scour social media sites to quickly understand how customers feel about their product.

And while the integration of A.I. like Watson might be a few years off, small businesses already have access to some fairly advanced technology.

“Formerly enterprise-only solutions like touch-controlled office kiosks, interactive point-of-sale terminals and even sophisticated employee inventory systems are now within reach of the smallest small businesses,” writes Jonathan Blum in a story for

Looking further ahead, robots might one day replace humans in some office and administrative roles, with the ability to do everything from ordering stock to managing employees’ schedules and payroll. But most experts are confident there will still be plenty of jobs for humans in the future, and in a recent interview with President Obama showed optimism regarding the development of robotics and A.I.

“Historically, we’ve absorbed new technologies, and people find that new jobs are created, they migrate, and our standards of living generally go up,” Obama said.

New technologies will also play an important role in the experience of shopping at brick-and-mortar stores in the future. Engadget writer Chris Burch points to the ways in which many brands have already incorporated technology into the brick-and-mortar shopping experience. Some stores use Beacons, for example, to send coupons or product recommendations to consumers’ phones when they enter a store. Other technology like radio frequency identification (RFID) allows businesses to track their retail inventory digitally. Even more futuristically, some brick-and-mortar stores have embraced augmented and virtual reality to enhance their customers’ experience. Burch predicts that storefronts of the future will use augmented reality to demonstrate to customers the various ways products can be arranged and used: “Someday, you can expect to see virtual fitting rooms, interactive window displays and augmented reality-assisted navigation through larger stores,” Burch writes.

 It’s fun to think about the ways consumers and business owners will benefit from technology that streamlines the process of buying goods and services and will enhance the consumer experience. But, even looking 50 years into the future, it’s comforting to imagine some aspects of the local business community remaining the same.

“We still need to protect our heritage downtown,” Stellato says. “The Arcada, Hotel Baker—these businesses are an economic engine. They drive restaurant and hotel use.”

Stellato is confident brick-and-mortar businesses will exist well into the future in communities like St. Charles, showing faith that local business owners will keep up with innovations in technology.

“There’s a new way of thinking,” he says. “We all learn how to adapt.”