Although ecommerce has been cast as the fatal threat to bricks-and-mortar stores, retailers are discovering that stores help forge a valuable connection with customers in ways that online experiences cannot, a consultant argues.
Erin Jordan, vice president and partner with Walker Sands Communications, leads the consulting company’s retail and supply chain technology team and recently made her observation in Walker Sands’ annual industry report titled, The Future of Retail 2019 – The Paradox Between Convenience and Connection.
She believes that bricks-and-mortar stores still possess advantages they can readily exploit if management chooses to learn how to do so.
“While so much of the online experience has been personalized, the data reveals that feeling connected to a brand involves more than just advertising relevant products – and in-store experiences play a large part.”
Jordan points out that one in four consumers (25%) surveyed say they feel more connected with brands when they go to stores.
The No. 1 place consumers prefer the convenience of one-stop shopping is for books (80%), followed by CPG products (79%), office supplies (76%), food or groceries (including fresh food) (74%), health and beauty (71%) and pet supplies (71%).
Clothing and furniture were the two categories where consumers were most split between the convenience of a one-stop shop and the experience of a branded store.
“This indicates a rise in consumer comfort purchasing items online alongside the growth of technology fueling these categories,” Jordan points out, adding that, “It also hones in on the rising consumer preference for experience-driven commerce in store.”
Luxury goods also enjoyed a stronger preference for a branded experience (60%). While consumers remain focused on convenience in categories such as luxury, they also still want the white glove treatment.
The research reveals that while consumers continue to grow in comfort shopping online, the youngest are focused more on in-store, particularly on more niche and branded experiences.
Those under the age of 35 are overall less likely to want a one-stop shop experience. The youngest consumers also are the most likely to want a branded retailer experience, especially when it comes to clothing. In fact, 59% of those 18-25 say they prefer a branded experience.
In addition, youngest consumers (ages 18-25) are the most likely to say they’ve shopped at a mall in the past year to buy clothing (69%), indicating a shift toward more niche shopping experiences. In fact, one out of five (21%) consumers ages 18-35 have been to a mall in the past year to visit a branded experience store.
“As today’s younger consumers continue to play a larger role in today’s shopping economy, their preferences for more specific in-store branded experiences are likely to completely evolve today’s brick-and-mortar stores,” Jordan says.
<h3>Supply Chain Is Key</h3>
If a consumer is entering the store, especially to make a larger purchase, it’s likely they have done research ahead of time. Surveys show that a whopping 87% now begin product searches online.
This aligns with an increased comfort in online purchasing of big-ticket items where research is easier and purchases often arise from the recommendation of others, Jordan observes.
This year’s report reveals that nearly half of consumers (46%) say they are more open to purchasing a big-ticket item online than they were a year ago. That number is even higher for those 18- 25 (51%) and 26-35 (56%).
Walker Sands found the categories seeing the most growth in online browsing and purchase include larger, more expensive items that have strong reviews and a typically low reputation for the quality of the in-store experience.
For example, a third of consumers report having browsed for furniture (33%) and cars (34%) online, and three in 10 have browsed for appliances online over the past year.
Consumers ages 26-35 are most likely to browse for or make purchases for big-ticket items (37%, compared to 24% of those over the age of 45), again showing the combination of comfort with shopping online and funds for purchase, Jordan says.
While consumers say faster shipping will make them more likely to shop online, they seem driven by the overall convenience of door-to-door delivery.
Three out of five consumers (61%) have purchased a product online in the past year to be delivered with regular shipping, and 42% to be delivered with two-day shipping.
Picking up in store has also gained steam, with 38% of consumers reporting they have ordered online to pick up at the store, Walker Sands reports.
Still, the majority of consumers are looking for improvement on today’s delivery options – just 17% of consumers say they are always satisfied with online retailer’s shipping options for speed of delivery, compared to nearly double who are satisfied with Amazon’s delivery speed (30%).
Retailers are doing a better job of providing transparency in the delivery process, with 81% of consumers rating retailers’ communication as “excellent” or “good,” compared to 83% who feel the same about Amazon’s communication during the delivery process.
“While so much has changed in retail over the past several years, the convenience of free and fast shipping remains the key to increased online purchases,” Jordan says. “And while consumers are optimistic about the future of online shopping, better in-store experiences continue to become more prominent across various product categories.”
Free shipping reigns as the most important option for the sixth year in a row (77%), followed by fast shipping. Amazon’s one-day shipping and FedEx’s seven-days-per-week shipping arrived just in time, since 35% of consumers say next-day shipping is a key in getting them to purchase more online.
But fast shipping preferences don’t stop there — 39% of consumers say same-day shipping would make them more likely to shop online, and 20% are looking for two-hour (or less) shipping.
When asked about their perception of Amazon’s growth in the retail industry, 45% say they are excited about it because it will provide either more convenient or less expensive buying experiences. Just 14% are concerned about Amazon gaining a monopoly.
“Certain goods will become more synonymous with a convenient connection, but truly differentiated brands will drive connection that surpasses convenience for today’s consumers,” Jordan says.
“Brands able to differentiate themselves by demonstrating their value to consumers as a part of their lifestyle will be able to build both convenience and connection to compete and succeed in today’s retail landscape.