With the introduction of online and mobile shopping decades ago, buyers’ once-limited choices and habits broadened, creating more pressure for traditional retailers to maintain their market share. In this new environment, shoppers migrated to retailers that provided emerging omnichannel options. As pressure mounts for today’s brick-and-mortar retailers to adapt and become more competitive, especially during the ongoing pandemic, those who do not will continue to experience declining sales and store closings.
To gain more insight into the changing retail landscape, BHDP Architecture (Cincinnati) initiated a survey of 1000 U.S. shoppers above the age of 13 who purchased product both online and in store from well-known specialty retailers in 2020. The results of this study have implications for retailers trying to survive in today’s quickly evolving landscape.
Respondents from across the U.S. were asked about their shopping preferences for three periods of time: prior to the COVID-19 pandemic, as COVID-19 restrictions were being lifted and after COVID-19 is gone. Almost half of the respondents preferred to shop in store before the pandemic, however the 18-24 and 25-34-year-old age groups preferred to shop online. With some restrictions being lifted, there was a shift from in store to online shopping as only 26.1 percent preferred to shop in store and more than 55 percent of respondents desired to shop mostly online. Post COVID-19, the number of respondents stating they will shop in store increased to 39.9 percent, while the number who will shop mostly online decreased to 28.4 percent.
The importance of no preference
Those respondents who stated they have no preference may be of most benefit to retailers. Prior to the onset of the pandemic, 16.8 percent of respondents had no preference between shopping in store or online. When asked about after the pandemic is over, the number of respondents without a preference increased to 26.8 percent. This no-preference trend was especially prominent in several age groups, including the 18-24 age group, which selected no preference over shopping in store or online after the pandemic is over, and in the 13-17 age group, which showed a 33 percent increase in their preference to shop in store. This suggests that the shopping habits formed during the pandemic are not necessarily permanent behaviors across all consumers.
The good news for retailers is there are indicators that shoppers across age groups and genders want to return to shopping in store. As expected, when COVID-19 restrictions were being relaxed, there was a dramatic drop in those currently shopping in store as compared to those who shopped in store before the pandemic. Yet, the number of respondents indicating they are likely to shop mostly or always in store after COVID-19 increased by 52.8 percent.
With a greater number of shoppers expressing no preference between shopping online or in physical stores, it is crucial for retailers to emphasize and deliver on the advantages of their existing brick-and-mortar stores. The connection between retail store staff and shoppers is one that is not replicated online. Shoppers appreciate personalized services, positive experiences and friendly and knowledgeable staff. One respondent mentioned, “I have a relationship with the staff, and they do an excellent job of assisting me.” Others mentioned the helpfulness of staff, including providing product recommendations and assisting with product decisions as key to the in-store experience. “It is easier to ask questions when you are in store instead of having to wait for an online response,” pointed out one shopper.
Retailers must quickly and accurately adapt to shoppers’ changing needs and desires or risk losing market share. To get ahead, retailers can meet shoppers’ expectations by consistently gathering information on their customers to understand their habits and behaviors and delivering on shopper expectations through omnichannel strategies. Those retailers that invest in the combination of the online and brick-and-mortar shopper experiences are starting to see some success.
One respondent summed it up by saying, “Local retail is struggling. It is more convenient, and I am able to get items in a timely fashion, but helping retailers through this unprecedented time is critical. If the retailers that I am loyal to disappear, I will have nowhere to turn to for my groceries, clothes, etc.”
Retailers that already offered some aspect of omni-choice fared well during the pandemic. The shift in shopper control and change in behaviors requires new thinking and approaches. Doing so with an omni-choice viewpoint enables retailers to serve the needs of their shoppers while preparing for the future.
With the shopper in charge, it is no longer about the retailer selling product, but instead it is about improving the shopping experience in the physical space by providing more options. Brick-and-mortar retailers need to capitalize on the strengths they offer over e-commerce retailers. This includes emphasizing convenience, the shopping experience itself, product availability and price.
Delivering for the younger shopper is a key and unique opportunity. As confirmed by our research, in the future generation Z will prefer to shop in store, even more than pre-pandemic. They look for authenticity, want to learn about the brand and meet the people in store who represent the brand.
To move forward, retailers need valuable insights on specialty retail shopper behaviors and beliefs to create holistic omnichannel strategies that bring shoppers back to brick-and-mortar stores. Our research showed that while at the start of the pandemic shoppers mostly had specific preferences on how and where they shopped, a significant number indicated they now no longer have a preference. This increase in “no preference” shopping represents the new baseline for the expectation of choice, thus removing the control from retailers and putting the shopper in charge.
It’s time for brick-and-mortar retailers and designers to reevaluate how retail stores are planned and designed. Retailers need to adapt to a new approach that puts buyers – and their expectations, changed behaviors and decision-making emotional drivers – at the center of the shopping experience. The opportunity to regain shopper loyalty is there for retailers that create more meaningful in-store experiences that marry online with in-store messaging and provide omni-choice solutions for all shoppers.
For more than 30 years, Andrew McQuilkin, FRDI, has served in key design leadership roles in the retail industry. In his role as Retail Leader at BHDP, Andrew is responsible for leading the retail design and architecture team’s expertise in branding, store planning, interior design, merchandising, building architecture and rollout for retail clients. Reach him at [email protected].