As I mentioned in my last blog, Zebra’s 2020 Shopper Study confirmed that most people still want to shop in a brick-and-mortar store, including millennials. The shopping experience offered in store – the ability to taste, smell and otherwise “try before you buy” – can’t be duplicated online in many cases. That is inspiring even “digital natives” to walk through your front door, albeit with their digital devices in hand.
In other words: the traditional retail model isn’t dead – it’s just evolving.
In fact, new research from IHL Group confirms that more than five retail chains opened stores for every retailer that closed stores in 2019, an increase from 2018. And the number of chains that added stores in 2019 increased 56 percent, while the number of closing stores decreased by 66 percent. At the same time, several “digital native” retailers have started to open their own brick and mortar locations while others are opting to leverage pop-up stores or partnerships with more traditional retailers to accommodate many consumers’ preference to “try before they buy” via in-store brand experiences.
That’s the good news.
The bad news?
Shoppers technically don’t have to come into your store for any reason anymore. They can “click-to-buy” literally everything, often with the confidence that any item can be returned if it doesn’t bring 100 percent satisfaction – couches and clothes included. And though “buy online, pick up in store” (BOPIS) options may still attract some shoppers inside for a (presumably) quick visit to the customer service counter, curbside pickup is gaining in popularity with home delivery service remaining highly desirable. In fact, over two-thirds of customers are willing to spend a minimum amount when ordering online if it means free delivery or a coupon/cash for waiting for delivery.
In other words, customers don’t have to drive to your storefront ever again if they don’t want to. That’s a drastic change from even five years ago when most consumers had no choice but to walk through your front doors to grab groceries, shop for furniture or even try on clothes.
Therefore, retailers who want to continue to entice people to shop in store for the unforeseeable future need to think about how they can adapt “traditional” operating models and evolve fulfillment strategies to reduce any friction in the customer experience – friction that might motivate shoppers to walk back out of your stores empty handed as quickly as they came in.
The New Reality: Shoppers Say Price and Convenience Drive Personal “Fulfillment”
This may be hard to believe considering the record-setting online sales that occurred during the 2019 Black Friday and Cyber Monday extravaganzas, but most shoppers still find it more convenient to shop in store than online. This is according to both Zebra’s 2020 Shopper Study and a study released in early December by the National Retail Federation and Prosper Insights & Analytics. The latter found that “a healthy in-store appetite from Gen Z shoppers, driven by their desire for social interaction, nostalgia about the childhood family tradition and FOMO (fear of missing out) about deals. More than three-fifths of those aged 18 to 24 shopped in physical stores over the holiday weekend, up from 46 percent last year,” as noted in this Forbes article.
However, sustained consumer interest in shopping in store does not give retailers permission to maintain the status quo. Quite the opposite. Though the things that motivate people to shop in store versus online remain very basic…
- The opportunity to browse or experience the product (53 percent)
- Believing a product will be available (46 percent)
- The opportunity for instant gratification – “I can buy it right now” (41 percent)
- The opportunity to comparison shop, especially as it relates to pricing markdowns, discounts and promotions (34 percent)
Traditional in-store operating models will make it difficult to successfully monetize these opportunities. Retailers must modernize if they have any chance of delivering the frictionless in-store experiences that keep shoppers motivated to walk inside, browse and ultimately buy.
Those who fail to adapt their strategies to what I call a “technology-powered tradition” model will find it impossible to find their operational edge or deliver what customers need and expect. In turn, shoppers will turn around and walk out – some never to return again. That is if they even feel motivated to shop in your store in the first place.
I’m not talking hypotheticals, either.
Only 57 percent of shoppers reported feeling satisfied with their recent in-store experiences in Zebra’s 2020 Shopper Study.
So, how do we get that number up to triple digits you might be asking?
Focus on improving what you can control: inventory, pricing, customer service and delivering an overall fulfilling “experience” every time a shopper steps foot in your store for any reason, even if it’s just to complete a return.
How Omnichannel Fulfillment and Return Models Play into Shoppers’ Feelings of “Fulfillment” – and the Likelihood They’ll Return to Your Store
I cited this stat in my last blog and find it worth repeating: 75 percent of millennial shoppers and more than half of Gen X shoppers indicated that, in the month prior to our study, they had shopped in a store but ultimately abandoned their purchases. The kicker is that they ended up buying the items online. While we don’t know exactly why they made this decision in these specific instances, what we do know is that 39 percent of shoppers said that they have left a store without a purchase due to desired items being out of stock. And one-quarter of shoppers have left a store without their purchases when the in-store price did not match the online price. (Remember, price and convenience are the top two factors influencing buying decisions today in every category except food service, but more to come on that in an upcoming blog.)
As stores increasingly turn into fulfillment centers for online orders, retailers have to be careful not to sacrifice fulfillment capabilities for shoppers’ in-store purchases – or desired purchases.
When pricing errors arise or store associate intervention is required to address a mismatch, shoppers may not have the patience to correct the issue, particularly if it is more convenient to click-to-buy online for a lower price – or the price they thought they were going to pay in your store. And when shoppers find items out of stock on the shelf, not all will go online on their mobile devices while in store to make the purchase for later in-store pickup or home delivery. They may not find that added step convenient in that moment. Time may be of the essence; they may not be able to wait for an online order to be fulfilled, even if you do offer one- or two-hour delivery. So, they’ll go visit a competitor’s store to get what they need – and anything else they decide to buy while browsing.
Will they return to your store the next time they need something? That depends. Once they are driven to go “experience” another store, they may find they like shopping their better – or they may find that it was more convenient for a number of different possible reasons. Loyalty is not what it used to be.
If you want to compel customers to repeatedly return to your store and ensure they leave “fulfilled” every time, even if they don’t make a purchase each time, then it is imperative that you prioritize actions that will secure a sale.
For nearly every retailer, that means augmenting the store environment with technology and/or equipping associates with mobile solutions that allow them to engage more directly and richly with customers. Those same mobile technologies also make it super simple to identify and take action on issues that could cost you a sale, such as incorrect shelf pricing, misplaced inventory, out-of-stocks that could easily be replenished from backroom inventory, planogram non-compliance and more. Combine them with prescriptive analytics, computer vision and intelligent automation solutions (yes, I’m talking about co-bots) and now you have a way to immediately see, analyze and act on every opportunity to improve a consumers’ in-store shopping experience.
In this video, I talk a little bit about how data generated by Internet of Things (IoT) solutions – including mobile devices – can be utilized to evolve traditional brick-and-store experiences to align with consumers’ highly-fluid expectations: