8 Reasons Why Physical Stores are Still Important for Retail
eCommerce dominated during the Covid-19 pandemic. In fact, even though overall retail spend decreased, eCommerce sales grew. However, it might surprise you to know that, even with the pandemic, eCommerce represents a small percentage of total retail sales. According to eMarketer, it’s as low as 14.5% in the U.S. This makes it clear that physical stores are still very important, and retailers need to continue investing in them. Here are eight reasons why:
1. Customers who pick up in a store buy additional items
Click and collect, or BOPIS (buying online and picking up in store), and curbside pickup are very popular with consumers and retailers for its convenience and speed. For retailers, it is cheaper than delivery, brings shoppers in, and it can lead to more purchases. According to Forrester, 30- 40 percent of consumers using this method buy more at the store.
2. Consumers are more likely to buy a product they’ve seen in person
The main reason consumers prefer to shop in physical stores is, according to KPMG , to see, experience, and test products in person before buying. A physical location can dispel doubts and help close the sale. In addition, this can reduce the chance of a product being returned for size, color, etc.
3. Personalized customer service increases sales
While eCommerce is popular, human interaction is still important. RetailEXPO data says that more than 60 percent of shoppers feel that knowledgeable salespeople can influence their willingness to go to a physical store, and 75 percent are likely to spend more after getting high quality service in a store.
4. The brand experience is still physical at its core
Retail is very competitive. It’s a challenge to stand out online, but a physical store provides the opportunity to deliver a powerful brand experience. Today, providing an experience that balances safety, excitement, and convenience can differentiate one brand from another.
5. Stores can reduce the cost of returns
Consumers return 5-10 percent of in-store purchases, while the returns from online purchases is 15-40 percent. Also, it costs more when consumers exchange or return purchases bought online than at physical stores because it removes shipping and transportation fees. This aligns with what consumers want; the National Retail Federation reports that 80 percent of shoppers say they prefer to return products to a store than send it back.
6. Physical stores can be used as part of the supply chain
One of the problems with omnichannel retail is that the cost of logistics can explode and erode margins. To combat that, some retailers use some or all of their physical stores as warehouses and fulfillment centers–called “dark stores”. This can reduce inventory management costs and expand their reach across larger geographies by improving distribution.
7. Retailers get free market research about customers’ preferences and habits
Although data collected from an online store can help retailers see trends, they can learn much about their customers by watching them shop and interact with the space and products.
8. Physical stores attract more traffic to online stores
The International Council of Shopping Centers reported that traffic to websites increases by 37 percent the following quarter when a physical store is opened. Also, when a retailer opens a physical store, the number of online mentions of the brand and web searches increase significantly–which leads to increased profitability.
And that’s not all. A Harvard Business Review survey reported shoppers who buy both online and in physical stores often spend more on average, confirming that physical retail still has a major role to play in their business strategy.
Let ArcherPoint Help You With Your Omnichannel Strategy
ArcherPoint provides omnichannel retail solutions retail solutions that bridge the digital-physical divide between virtual and physical stores with a single, convenient platform. With solutions like LS Retail, Dynamics 365 Business Central, Dynamics 365 Commerce, and Microsoft Power Platform, we can give you a solution that combines in-store observational and transactional data across digital and physical channels so you can meet customers where they are. Our retail experts can help you take advantage of these and future trends in retail to keep you competitive. Contact ArcherPoint to learn more about our retail solutions.