Return to Physical Stores

Even before the COVID-19 crisis, the role of the store was undergoing transformation. The physical store will not disappear, but its role will change. The store needs to contribute added value to the business beyond sales. Hybridization and the mix of online and offline is increasing.

First, consumers move between online and offline during their journey, for example ordering online and picking up in store, or using the physical store as a showroom and placing order for delivery.

Second, the in-store experience is becoming increasingly digital mixing, for example self-checkout options and interactive displays. Finally, the store is beginning to become more like the eCommerce sales funnel with the ability for businesses to capture more data from the sales floor.

In many categories, consumers are returning to in-store shopping while other categories remain highly online.

What can make the physical store more interesting to customers and more efficient to operate?

Experiential Retail

In previous reports we highlighted the store’s role as a community hub building connections between brand and customer. While a lot of in-person engagement was paused over the past two years, today we see this type of in-store brand engagement bouncing back. The store should contribute to the holistic relationship with the consumer.

Shoppers spend more in-store:
Where do consumers spend over $50 per visit?

(Source: The State of Consumer Spending, First Insight Inc. Survey)

71%

In Store

vs.

50%

Online

In-Store Navigation

Deeyook

Galileo

Oriient

Phygital

Contactless In-store Experience

Accelerated by health and safety concerns around the initial outbreak of Covid 19, the prevalence of contact-less in-store experiences is growing. Beyond avoiding germs, contactless options may stick around. First, they are often more convenient and quicker for shoppers.

Second, they can create an eCommerce like funnel within the physical point of sale by collecting more data about consumers behavior and opening opportunities for proactive in-store offers.

There are many mature pinpointed solutions in this area, but few that create the full experience on their own. Given the need to synchronize technologies, who will be the operating system?

56% of consumers were anxious about shopping in-stores

(Source: Deloitte 2021 Retail Industry Outlook)

Autonomous Store

Payment

Data-Driven Stores

Physical stores are becoming more like eCommerce businesses on the back-end too. Tools for managing employees and inventory can then be leveraged for more efficient operations. Further, these technologies can transform the store from being a blind spot and obstacle to being an asset for omnichannel approaches.

In-store data can contribute to consumer engagement and smarter marketing efforts online. As AR, VR and metaverse mature, they may be able to connect the bridges between in-store on online more completely.