Remaining Relevant
It’s easy these days to get caught up in the frenzy as online sales growth outpaces total retail sales growth. But let’s not lose sight of an important fact: The physical store still remains the most crucial brand touchstone for shoppers. It’s also where the overwhelming majority of retailers still rack up their volume. And according to nearly every reputable forecast, that isn’t likely to change anytime soon.
Yes, consumers love using their phones as retail tools. But they love to go out and shop even more, a fact borne out by survey after survey. According to one of the most recent ones, by technology company Synqera, more than two-thirds (67%) of Americans prefer to shop in brick-and-mortar stores than online.
“All the handwringing over the supposed demise of the physical retail store and challenges like showrooming overshadows one important fact: People still love to shop in stores,” the company wrote on its blog.
“Otherwise, why would technology brands like Apple be so aggressive in making their physical retail space an experience, while others like Microsoft and Samsung push pop-up stores?”
It’s not just technology brands. Pure online specialty retailers are also opening stores. There is no mystery why: It’s difficult for online retailers to duplicate the immediacy and real-time experiences that are the hallmarks of the physical store.
“We’ve heard from our members that being able to see and try on products before they buy is still an important part of the shopping experience for them,” said Adam Goldenberg, co-CEO, JustFab. The online subscription retailer recently opened its first store.
But as much as the digital revolution has not killed the physical store, it has certainly upped the ante, putting a premium on things like customization, convenience and store experience. That’s especially true when it comes to reaching out to Gen Y.
A survey by the Urban Land Institute, “Generation Y: Shipping and Entertainment in the Digital Age,” found that, contrary to popular opinion, Gen Y does most of its purchasing in stores. Other studies reached similar conclusions. The NPD Group found that 53% of millennials shop in-store at least once a week, and 81% of their dollars are spent in stores.
There is a caveat, however.
“Gen Y’ers have grown up with information technology, and they are accustomed to stimulation in the form of music, light, color and action,” said Patrick L. Phillips, CEO, Urban Land Institute. “Retailers need to continually change their looks, services and merchandise offerings in order to keep up with this trend-oriented generation.”
His advice resonates pretty much across the board — not just for retailers looking to appeal to millennial shoppers. Technology has conditioned nearly all of us to want better, faster and more memorable customer experiences, and more personalized and consistent ones as well. Physical stores aren’t going away, but they are changing. Those that don’t do so at their own peril.
Marianne Wilson
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