With customers shopping from home, what does the same-store sales metric mean anymore?

in-store sales

Just over a decade ago, the phrase “social media” was almost unknown. At best, it was used by early tech adopters and fringe internet communities. Fast-forward to today, even your grandma knows what it is.

Retail has experienced a similar shift. 

How companies sell and market products, and interact with customers, is unrecognizable compared to ten years ago. The companies that have innovated their products and services, and gone through the most change, have been the ones that have flourished. What happened to the complacent companies insistent upon their antiquated strategies? They’ve floundered.

Yet, despite all the change, one aspect of the industry has remained the same: the usage of the same-store sales metric to measure a brick-and-mortar store’s success. Same-store sales is merely the percentage increase or decrease in the amount of sales generated by a store year-over-year. For decades, the emphasis of countless companies’ quarterly earnings calls was intentionally placed on the same-store sales metric. It remains the end-all metric for retail companies’ success.

But the rapid change that e-commerce has brought to the retail industry has raised an important question: Is same-store sales becoming obsolete?

The simple answer is yes.

Along with the digital revolution in retail came a slew of industry complexities that are nearly impossible to measure. For example, how does a company gauge the importance of a brick-and-mortar store when a customer comes in to try on merchandise, only to purchase it online later in the day? How do you assess the value of customer’s assurance of knowing that he can easily return items he bought from a website to the store down the street?

With brick and mortar, companies are giving consumers what they really want: choice.

The idea of omnichannel retail, when a company offers a customer experience filled with both online and offline touchpoints, has become the pinnacle shopping experience despite coming at the expense of the in-store sales metric.

For these reasons and more, the value of a brick-and-mortar store has become far more difficult to quantify. The same-store sales metric does not capture the intangible value of a store. It’s an over simplified measure of a complex, multifaceted issue.

A few companies have already adapted to the new environment. For example, Petsmart has begun to leverage their brick and mortar network to complement their online sales. By partnering with Deliv, Petsmart is able to offer same day delivery in markets all over the country, allowing consumers to purchase and receive items within hours.

Interestingly, pure play e-commerce companies have made similar efforts to close the gap between product and customers by moving into physical locations of their own. Amazon has acquired Whole Foods, Bonobos opened Guide Shops, and Warby Parker’s retail locations have some of the highest revenue per square foot.

Whether it’s traditional retailers using their stores to improve the online experience or e-commerce experiences moving to brick and mortar, omnichannel retail has taken full hold of the shopping experience—making same day delivery the new standard in the retail industry.

Experience same day delivery yourself by scheduling a Deliv or Contact Us to find out more about our enterprise, API-integration.

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