A core reason for favouring online shopping instead of in-store is the convenience of ordering a product straight to your front door. However, is online shopping truly as convenient as we’ve perceived? With uncertain or inconvenient delivery times, pricey delivery costs for lower value items and impractical return policies, do the pros of online shopping actually outweigh the cons?

Introduction

In an era where our groceries can be delivered within hours of placing the order, we can book hotels, transport and museum tickets all within Booking.com’s one handy app and everything else can be easily ordered through Amazon, it’s easy to question the necessity of physical stores. Even our favourite high street retailers like M&S, H&M and Boots offer a seamless online shopping experience and, thanks to Deliveroo and Just Eat, you can even have a piping hot Costa in your hands within minutes of ordering. So, why do we still need physical stores?

The challenge: Finding the right location

Maximising revenue and return on investment while mitigating risk is a priority for any retailer. Choosing the right location is crucial for ensuring enough foot traffic and attracting loyal and new customers. A poorly chosen location can lead to low footfall, poor sales performance and the eventual closure of stores.
Retailers need to understand local market dynamics to position their stores effectively. This involves analysing footfall, demographic and dwell time data with spending insights to identify areas with high potential. Knowing where consumers go, their purchasing power and the density of the catchment area can help strategists make informed decisions.

Creating a memorable in-store experience

In the online world, we often speak about “user experience” and “customer journeys” to measure how quickly, easily and smoothly a customer can go from visiting a website, to viewing the product list, adding an item to their basket and paying at checkout. Creating a seamless online experience not only boosts sales but creates brand affinity. A mantra that successful brands replicate in their physical stores.
Physical shops allow retailers unique and engaging in-store experiences that can’t be replicated online. Take Selfridges. The fashion institution has gained worldwide fame for their lavish window displays. During the festive season, their Christmas windows attract 160,000+ visitors a day. Which is of course, photographed, hashtagged and shared across social media (Reference: British Heritage) This strategy utilises a physical location to not only lure in passers-by, enabling Selfridges to capitalise on the increase in footfall, but also to enhance their own online presence, creating a seamless omnichannel experience.

Building customer loyalty

Shopping in-store gives customers access to knowledgeable advisors and salespeople. By enhancing the in-store experience, sales teams can influence purchasing decisions and build a sense of trust and community. It’s this familiarity and comfort that is key to returning business. According to Google, 45% of shoppers who purchased in shops did so because it’s where they always buy. (Reference: Think with Google) Human interaction offers a significant advantage of physical stores.
Understanding the demographic profile of your locations, including age and purchasing power, enables brands to personalise the in-store experience to the preferences of their primary customer segments. Baby Boomers for example may prioritise customer service while Gen Z value experiential shopping. Primark for example, whose target audience falls within the 17-24 age bracket, offers far more than shopping in its regional flagship stores. With in-store beauty bars, charging points, a barbers and cafes, Primark has built a successful model aligned to its customers’ demographic preferences.

Benefits of in-store shopping

  • Certainty and convenience: shoppers are more likely to purchase products in-store where they can see and feel the item.
  • Reduced Return Rates: Only 9% of in-store purchases are returned compared to 30% of online purchases. (Reference: CBRE
  • Immediate Collection: 80% of shoppers prefer to buy in-store when they need an item immediately. (Reference: Think with Google)

Conclusion

Ecommerce has undoubtedly transformed retail, but physical stores remain crucial for providing a comprehensive shopping experience. A whopping 73% of customers said that physical stores are part of their main method for purchasing goods, and 61% said they would rather shop at brands with a physical location, over brands that are online only. (Reference: Think with Google)