Earlier reports of retail stores’ death have been highly exaggerated! Though online shopping is certainly on the rise, but contrary to projections a few years ago the role of the brick-and-mortar store has in reality become more important than ever. As early as March, a PwC survey, highlighted the fact that physical stores still remain the primary destination for shoppers, since then the momentum has only increased and over the year various reports and surveys are proving and stressing on the importance of physical stores for retail, substantiating the same retailers are now avidly looking to strengthen their stores and improve the shopping experience for customers’ loyalty.
Though the digital age has encouraged more consumers to shop and browse products on the web, but a physical store is where they want to purchase these products. Increasingly international retailers are improvising and executing strategies to improve there in-store experience, Walmart and Target, who were among the first to jump on to the digital platform have taken a U-turn to relook at their stores, taking much-needed measures to create a better store experience. Macy’s is in the process to remodel its stores and has created a fresh team to capture shoppers who love the traditional way of shopping. The fact that e-Tailers such as amazon are opening retail stores gives some credence to the importance of physical stores. According to the latest report by TimeTrade, which is a culmination of the many reports that appeared earlier, “Amazon is a perfect example of the notion of retail convergence, which is converging of the web and physical retailing. The main driver for retail convergence is that purchase behaviour has changed. Consumers are now more educated and now view the in-store experience as the final buying decision point.”
HIGHLIGHTS OF TIMETRADE REPORT
• 87 per cent of consumers say they plan to shop in physical stores in 2015.
• 85 per cent say they go into stores to ‘touch and feel things’.
• 71 per cent say they would prefer to shop in Amazon’s physical store versus Amazon.com.
• 65 per cent report that if an item they want is available online or in a nearby store, they prefer to shop in the store.
• Mobile shopping is cited as a trend, but when consumers are looking to buy something, just 13 per cent use a mobile device to do so. Most use mobile to browse, research products, compare prices, and then look for the nearest store location.
• Nearly 90 per cent of respondents are more likely to buy when helped by a knowledgeable staff member, and 50 per cent value the expertise of sales associates
Supporting this trend, the report claims that physical stores dominate retailing; though e-Commerce is expected to more than double by 2020 to about US $ 550 billion but the money spent at stores will still be nine times what is spent online in 2020. This report is based on an in-depth survey of 1,029 consumers, their shopping patterns and motivations and also includes data from other sources such as, the US Commerce Department. “The bottom line is customers value the personal experience of the physical store. We found that shoppers have done their virtual shopping or discovery online, than go into the store to get help with their final purchase decision,” informs Gary Ambrosino, CEO, TimeTrade. Also, the internet has made it easier for consumers to make price comparisons and to access product reviews before finally making a purchase. Continuously, retail is experiencing a paradigm shift in consumer behaviour. Many international retailers are aware of this change, and are supporting it by accommodating the customer’s end-to-end journey across multiple channels that they control.
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Today shoppers are loaded with research and no longer do impulse shopping like they used to before the economic downturn. This changing dynamic is creating a major challenge for retailers, who need to come up with new strategies to entice consumers who are ultra-knowledgeable and in many cases, more knowledgeable than the store’s own sales staff.
Sheryl Kingstone, Director, 451 Research asserts, “The industry needs to transition from a merchandising point of view to a customer-centric point of view. The shopping journey has changed more in the last five years than it did over the past 150 years. As a result, there can no longer be a divide between digital and Brick-and-Mortar.”
Nevertheless, the ongoing debate on online versus physical store will not fade away soon but only those retailers who change with the consumer behaviour and follow growing trends will be able to wade through and stand strong amidst competition. As consumers become more fickle-minded, it is becoming even more important to provide them with a unique experience in-store so that they become customers for life. But the battle still doesn’t end here, as brands have to continuously update and imbibe technologies in order to make stores an exclusive destination to satisfy the complex customers. As Mike Moriarty of A.T. Kearney concludes, “The boom in e-Commerce has brought challenges. Both Brickand-Mortar leaders and major pureplay online retailers are learning that the future of the industry is not merely online, but rather in creative omni-channel offerings that link online and physical shopping.”
