Good news for small retailers. Consumers of all ages still prefer physical stores to eCommerce shopping, according to a study by A.T. Kearney. In fact, brick-and-mortar retailing is not only the industry’s cornerstone today – but also its future the study predicts.
Although eCommerce seems to get all the media attention these days, in reality, the Omnichannel Shopping Preferences Study notes, 90 percent of all U.S. retail sales still happen in stores. Just 5 percent occur via online-only channels such as Amazon.com, and another 5 percent occur on the eCommerce sites of companies that also have brick-and-mortar locations.
Opening a physical store, in fact, is becoming a hot trend for formerly eCommerce-only companies such as Warby Parker, Birchbox and Bonobos. The report explains:
“Stores provide consumers with a sensory experience that allows them to touch and feel products, immerse in brand experiences, and engage with sales associates who provide tips and reaffirm shopper enthusiasm for their new purchases.”
Study Polled Consumers in Five Demographic Categories:
- Generation X
- Baby Boomers
And About Five Steps in the Shopping Journey:
The study found that at nearly all ages and nearly all stages, the majority of consumers preferred the in-store experience to the online one.
Overall, stores play a key role even in online purchases. Some two-thirds of customers who buy something online visit a physical store at some point before or after the purchase.
The only stage along the transactional journey where shoppers prefer online for a select few categories, such as computers/electronics. Most consumers prefer in-store discovery for popular retail categories including furniture, apparel and accessories and health and beauty products.
The stage where in-store matters most. A whopping 80 percent of all consumers prefer to test products in a physical store. For some products, such as furniture or health and beauty, the percentage was even higher at 85 percent. “Immediacy, ease and accuracy” were some of the reasons people cited for preferring to test products in-store.
Surprisingly despite all we hear about showrooming, 70 percent of consumers prefer to make purchases in-store, especially for products such as furniture, fine jewelry and electronics. They tend to believe physical stores offer better customer service than online-only retailers.
Overall, about 55 percent of consumers prefer to pick up products in a store rather than have them delivered. This may offer more instant gratification.
Finally, nearly three-fourths of consumers on average prefer to return items to a physical store. Speaking as a serial returner, I know I always feel a little less than confident about shipping a product back to the seller.
Generation Gap – or Not?
It’s not surprising that seniors and Baby Boomers were most likely to prefer physical stores at all stages of the shopping process. What did surprise me was there were very small differences between age groups.
In fact, teens were right up there with the older folks in preferring brick-and-mortar stores for just about every phase except discovery. (This could be because teens don’t yet have credit cards allowing them to shop easily online.) The one group with the lowest preference for physical stores is Millennials. But even they would rather try, buy and return in a brick-and-mortar store.
In the future, the report predicts, physical experience will continue to be a key differentiator for retailers. You won’t be able to get by with a purely real-world store. You’ll need at least some eCommerce component. However, all else being equal, you’ll be far more successful if you have a great store experience and a mediocre website than if you have a great eCommerce site and a so-so store.
So Where Does Opportunity Lie?
As always, with the young folks:
- Attract teens now while they still enjoy physical shopping by making your store appealing and fun. Create opportunities to enhance the physical experience with social media, such as encouraging shoppers to take pictures in-store and get opinions from their friends; share selfies of them with your products on social media; or enter contests online that have in-store payoffs.
- Lure Millennials into your store and keep them coming back by making the retail and e-tail experience seamless. For instance, consider selling some online-only products that can be shipped to the store for pickup, or allowing in-store returns of online items. Make your website a showcase for your retail store by letting customers reserve apparel items online, then come in-store to try them on and buy.