How the physical store can have a future in retail
Physical stores are struggling. Footfall traffic is down every year and e-commerce is growing steadily. Consumer use of mobile devices to purchase goods has exploded. Stores are closing, chains are focusing on their digital strategies. But the fat lady hasn’t sung yet and it’s way too early to declare the death of the physical store.
It might sound a bit incongruous in this day and age, where the industry has shifted more and more of their focus towards e-commerce, but there are several trends and tendencies that offers more than a glimpse of hope for the physical store. I am certain that retailers who embrace the possibilities and adapt their strategies have a chance to create a viable future for their physical stores.
Me and my team went to the big NRF tradeshow in New York earlier this year and we were struck by how much focus was put on physical stores, and what retailers can do to secure their place in the future of retail.
This is not only backed by nostalgia and a sense of securing the fate of previous investments, there are some solid data to support it: for much of the online shopping world, a 2 percent conversion is considered good, but for physical stores upwards of 50 percent is not out of the ordinary.
Two out of three customers who get an in-person consultation spend more and recent studies show that omnichannel customers spend as much as three times more than those who choose to only go into the physical store or do their shopping online.
It's no wonder then that, according to Forrester Research presented at the NRF, one of the main areas of investment in the retail sector is cross-channel (omnichannel) solutions – with buy online, pick-up in-store (BOPIS) being a major play for most retailers.
But this is just the beginning
With the numbers hugely in support of adding BOPIS solutions to the physical store experience, there is little doubt that this will be even more wide-spread in the coming years. But this alone will not be enough to secure the future of the physical store.
The reality is that in a world where consumers don't need to go to the store, retailers must find ways to make them want to go there.
Research by WD Partners show that there are quite a few things retailers can add to their stores in order to encourage both younger people – the "digital natives" – and the older generations often categorized as "digital immigrants" to do just that – make them want to visit physical stores.