Dive Brief:
Majority of Retail Sales Titled for In-Store Channels Within Approaching Years: Forrester Prediction
It's commonly believed that the pandemic has boosted e-commerce sales, but it's more accurate to say that consumers have simply become more "tech-savvy" according to a new Forrester report. Here's the lowdown:
More than half of US e-commerce shoppers enjoy trying new brands, and 63% often compare products before they buy, showing a thoughtful approach to their purchases. Nevertheless, brick-and-mortar stores remain the primary destination for shoppers, with Forrester estimating that 72% of US retail sales will occur in-store through 2024.
Key reasons behind shopping in stores? Customers want to test products (47%) and take it home on the spot (38%). However, the surge of coronavirus variants, such as Delta, has brought a fresh wave of uncertainty to the retail and foot-traffic landscape.
Currently, stores are a valuable marketing and customer acquisition tool. But as Forrester emphasizes, retailers must ensure that their stores deliver exceptional experiences and cater to various consumer preferences.
The pandemic has led to a surge in delivery options customers expect while shopping online. For instance, 45% of Forrester's respondents prefer numerous delivery options. Moreover, 38% use BOPIS services more than before, and 32% plan to continue using curbside pickup post-pandemic. Interestingly, nearly a third of curbside pickup users elected the service to save time rather than search for items in-store.
Returns are another matter, with 41% finding online returns difficult and 36% having been deterred from online shopping due to challenges. An impressive 56% of respondents prefer in-store returns.
Dive Insight:
Although vaccines are now widely available in the US, the ongoing pandemic casts a shadow of uncertainty, particularly for retail and foot-traffic to stores and malls. Since July 2021, shopping mall traffic has not only recovered to pre-pandemic levels (up 1% compared to July 2019 at indoor malls and up 1.8% at outdoor malls) but has even surpassed these levels[1]. However, traffic since then has taken a dip. In August 2021, traffic compared to two years ago fell 2.5% at indoor malls and 4.7% at outdoor malls[2]. Experts attribute this decline to rising COVID cases, the timing of Labor Day, and the return to school.
Nevertheless, October 2021 is not looking much better. The festive season could, however, lure more people back to physical locations, especially if COVID cases once again start to recede[2]. Retailers must focus on providing unique and convenient in-store experiences that cater to various preferences to maintain consumer loyalty.
Enrichment Data:
While headlines may suggest e-commerce continues to outshine physical stores, it's important to recognize that retail sales have fluctuated throughout the pandemic. March 2023, for example, witnessed a significant uptick in sales (1.4% month-over-month), with various sectors experiencing a boom, including motor vehicles, building materials, sporting goods, food services, and electronics[1][2]. The retail sector added around 30,000 jobs in January 2023, signaling a robust labor market[3]. Despite the growth in e-commerce, in-store shopping still accounts for 72% of US retail revenue, demonstrating a sustained preference for in-person shopping experiences[4].
Retailers are adopting creative approaches to draw customers, such as 'pop-up shops.' These temporary, experiential stores function as a platform for customer engagement and product launches[5]. Additionally, retailers are employing omni-channel strategies that integrate both online and offline channels, such as Buy Online, Pick Up In Store (BOPIS)[3]. Economic resilience, fueled by job growth, and solid consumer confidence, along with technological advancements in retail, further boost physical retail's appeal[1][2][4][5].
- The new Forrester report suggests that the pandemic has made consumers more "tech-savvy," leading to increased e-commerce sales.
- Sixty-three percent of US e-commerce shoppers compare products before they buy, demonstrating a thoughtful approach.
- despite theShift towards e-commerce, brick-and-mortar stores remain the primary destination for shoppers, with 72% of US retail sales set to occur in-store through 2024.
- The surge of coronavirus variants such as Delta has brought uncertainty to the retail and foot-traffic landscape.
- Stores are a valuable marketing and customer acquisition tool, but retailers must ensure they deliver exceptional experiences and cater to various consumer preferences.
- The pandemic has led to a surge in delivery options customers expect while shopping online, with 45% preferring numerous delivery options.
- Moreover, 38% use Buy Online, Pick Up In Store (BOPIS) services more than before, and 32% plan to continue using curbside pickup post-pandemic.
- Returns are a problem, with 41% finding online returns difficult and 36% having been deterred from online shopping due to challenges.
- An impressive 56% of respondents prefer in-store returns, highlighting the continued preference for in-person shopping experiences, even as vaccines become widely available and platforms like AI and cybersecurity continue to reshape various industries such as retail, finance, health, lifestyle, culture, and fashion.
