Upswing in bricks-and-mortar retail: back to the future of shopping
The dead live longer! According to the latest studies, this proverb also applies to bricks-and-mortar retail. After the difficult coronavirus years, local stores are picking up speed again. A trend that is considered sustainable. This is why former online pure players are now increasingly focusing on an omnichannel strategy. This raises the question of how to establish a successful brick-and-mortar presence.
Contents:
- Study situation shows: Brick-and-mortar retail is on the upswing
- Why is bricks-and-mortar retail becoming more interesting for consumers again?
- Why are retailers increasingly focusing on physical retail spaces again?
- Boom in bricks-and-mortar retail: what are the consequences for online pure players?
- 8 success factors for brick-and-mortar retail
Study situation shows: Brick-and-mortar retail is on the upswing
A few years ago, the end of bricks-and-mortar retail was predicted. Today, the situation looks different. The challenging lockdown times are over. People are being drawn back to their local stores. At least that’s what various studies confirm.
As part of the “Omnichannel Management” survey, the St. Gallen Retail Management Research Center has been interviewing people who shop on different sales channels since 2011. In 2024, 51% of participants said they had last shopped in a brick-and-mortar store. In comparison, this figure was only 43% in 2021. Online retail is also on the decline. According to the Swiss research team, only 38% made their last purchase there. Three years ago, the figure was 47%.
The study by the Institute of Marketing Management at the ZHAW blows the same horn. Around half of the online store operators surveyed reported a decline in sales for 2022. A quarter of them even suffered losses of over 5%.
Why is bricks-and-mortar retail becoming more interesting for consumers again?
The renaissance of bricks-and-mortar retail is partly due to the ROPO effect(Research Online, Purchase Offline). This involves customers researching online before buying offline. According to a survey by PWC, 48% of consumers research products online using a cell phone or tablet before making a purchase. Consumers are then drawn to the local store. This behavior underlines the desire for a comprehensive purchasing decision, consisting of a digital information search and a physical shopping experience. In addition to the traditional advantages of bricks-and-mortar retail, such as personal advice and immediate availability of products, the following aspects also play a role:
- Genuine interaction: Local shopping promotes human contact.
- Technological innovations: Stores are using technologies such as VR to enrich the shopping experience.
- Exclusive offers: There are often special promotions and events on site.
- Data protection: There are fewer concerns about data security when buying offline.
These points illustrate why bricks-and-mortar retail is becoming increasingly attractive and plays an important role in modern consumer behavior.
Why are retailers increasingly focusing on physical retail spaces again?
The USA is considered a trendsetter. Looking across the pond, it is clear that bricks-and-mortar retail is flourishing there. A new record of 1.1 million stores was set in mid-2023. Large chains such as Target and Walmart are investing heavily in physical locations, driven by their profitability.
The focus on stationary retail is justified as follows:
- Personal customer experience: Direct advice and individual service in-store satisfy specific customer needs more effectively than online offers.
- Reducing returns: The ability to test products before purchase reduces incorrect purchases and returns, which is economically and ecologically beneficial.
- Local presence: Physical stores promote local ties. Retailers can react more quickly to regional trends.
These points underline the fact that the expansion of physical sales areas is not only financially motivated, but also aims to improve the customer experience and strengthen brand loyalty.
Boom in bricks-and-mortar retail: what are the consequences for online pure players?
Although the omnichannel approach is not yet in the top 10 e-commerce trends for 2024, this could change as early as next year. The success of bricks-and-mortar retail combined with the hurdles of online business is making many e-commerce operators think twice. The desire to stand out more from the competition and at the same time have less work with returns, logistics and supply chains is increasing the appeal of a physical presence.
Many online retailers decide to supplement their e-commerce offering with a local presence. They choose a showroom concept, rent outlets or retail space. Click and collect is also becoming increasingly popular. This involves purchasing a product online and then collecting it from a local retailer.
8 success factors for brick-and-mortar retail
At Showme Stores, we understand the synergy between online and offline and offer an innovative solution. We enable online retailers to display their products in local showrooms. Customers can physically experience the e-commerce products and try them out directly on site. However, there are several key factors to consider when setting up a stationary presence in order to establish a successful and customer-oriented business.
Customer experience and service at the heart of brick-and-mortar retail
Creating an exceptional shopping experience is central to the success of the store. This includes everything from the design of the store to the quality of service. The customer approach also plays a decisive role. The more individually the potential buyer is looked after, the more comfortable they feel. Consumers are often already familiar with the product from the online store. However, they would like to experience it live before buying. If they are able to do this and receive qualified support from specialist advisors, this significantly enhances their shopping experience.
Location and accessibility of the local store
A strategically chosen location is crucial to ensure high visibility and accessibility for customers. Stores in areas with high footfall attract more customers and increase the likelihood of impulse purchases. If the store or showroom is easily accessible by car and public transport, the chances of success are significantly higher. This is why our showrooms are only located in attractive locations with good infrastructure and high customer traffic.
Omnichannel integration and technology in brick-and-mortar retail
The seamless integration of online and offline experiences through omnichannel strategies meets the expectations of modern consumers. The use of technologies such as VR try-ons or interactive displays in physical stores improves the customer experience and strengthens customer loyalty.
Extensive product range and high availability
A diverse product range that is permanently available meets consumer expectations. This will encourage repeat customers to visit your store regularly. Make sure that the presentation of the products reflects your brand and offers customers real added value.
Efficiency and flexibility when checking out at the local store
An efficient and flexible check-out process reduces waiting times and increases customer satisfaction. Various payment methods and a simple returns policy contribute to a positive shopping experience. The aforementioned study by PCW shows that 31% of consumers have already carried out a self-checkout in-store. Modern technology is also accepted here. At the same time, however, there is a desire for qualified specialist advice.
Employee development
Investing in staff training and development strengthens the customer experience through expert advice and excellent service. A well-trained team is crucial for conveying the brand values, presenting the products perfectly and gaining the trust of customers.
Sustainability and community engagement in brick-and-mortar retail
Sustainability in e-commerce and bricks-and-mortar retail is becoming increasingly important for consumers. Stores that adopt environmentally friendly practices and engage locally build a strong connection with their community and encourage customer loyalty. You should also focus on this when opening and operating a local store.
Safety and inclusion
A safe and inclusive shopping environment is fundamental to welcoming all customers. Accessibility and safety measures protect customers and employees alike. They promote a positive shopping experience and a pleasant business culture.
By addressing these key factors, retailers can build a strong brick-and-mortar presence that meets the needs of today’s consumers while emphasizing the value of the physical shopping experience. Combining online commerce with physical storefronts and showrooms represents a forward-thinking model for retail.
