What Do 81% Of Shoppers Do In Stores That Only 19% Of Shoppers Do Online?

 Just like Mark Twain's erroneous obituary, the news that brick-and-mortar stores are dead has been greatly exaggerated. True, the situation has become ever-more competitive with the advent of new retail channels, greater costs (to offer products across channels), and retail price competition (due to the dramatic rise in price transparency through digital channels). All of these factors augured the weakening of traditional stores' productivity and profits; but studies show that retail stores still have certain advantages, can only improve, and are going to be around for a long time.

According to its Future of Stores study of 3,200 U.S. and UK consumers last February by global-expansion-thought-leadership firm, J.T. Kearney, retail stores remain at the heart of the customer relationship and play a main role in fulfilling multi-channel demand. The study found that consumers value the retail store experience on multiple levels for multiple reasons, and continue to make the vast majority of their purchases in stores. The biggest bonus for stores is that they remain the best opportunity for a retailer to inspire customers to spend more money than they planned to.

According to the Kearney Study*:

* 61% of consumer shopping time is spent in stores.

* 31% of consumer shopping time is spent online; with 4% via mobile, and 4% by catalog. 

 

How consumers shop can be broken down into several stages, from research to the after-sales experience.

1. Research: 55% do it in stores, 45% do it online.

2. Test or try on: 81% do it in stores; 19% do it online.

3. Purchase: 76% purchase in stores; 24% purchase online.

4. Pickup or delivery: 76% do it in store; 24% online.

5. After-sales experience: 83% get this in store, 17% online.

(See Figure 3, below: There are multiple new ways to research, verify, and purchase products):

 

As the figures suggest, digital channels play the largest role in the research phase, as shoppers read online reviews and find recommendations through social media; and physical stores dominate later stages, including product trial and testing and after-sales service and support.

Why consumers shop in physical stores:

People continue to value physical stores for several reasons that can't be addressed by digital channels:

24% of store shoppers: Filling an immediate need ("I like the instant gratification of taking an item home"),

15% of store shoppers: Trying products on, and experiencing products before purchase ("I like being able to get items right away, to try them out").

13%: to spend time with friends or family: A visit to a store still represents an important social event, as respondents also highlight spending time with friends and family as an important motivation to go to stores.

9%: To compare prices.

7%: To find promotions or special offers.

(See Figure 4, Below: Why Consumers Shop In Physical Stores): 

 

One of the biggest benefits for in-store retail is that when consumers shop in brick-and-mortar stores, they spend more money:

40 percent of consumers report spending more money than planned in retail stores, while only 25 percent report doing so when shopping online. 

 

Bottom Line For A Retailer's Bottom Line:

The idea that retail stores are dead or dying has been greatly exaggerated. Retailers are harnessing deep knowledge of how and why consumers shop, and then retooling and redeploying their store network accordingly. Retail stores do have to change to meet the multichannel challenges, but they still have some advantages in their backpack.

The trick for retailers is to approach this new market context strategically, not only to under-stand the best roles for stores and the store network to play in today's retail ecosystem, but also to keep stores at the center of the customer relationship while maximizing value across channels. In Part 2, we'll take a look at The Future Role of Stores and how consumers shop.

*The study showed that the physical store is the channel of choice across all ages (from Millennials to senior citizens), representing household income levels from less than $25,000 per year to more than $100,000 per year. The survey sample represented the adult population on demographics, including gender (53 percent female, 47 percent male), age (from 18 to 65), household income (from under $25,000 to more than $100,000), and geography (urban, suburban, and rural).  

 

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Gilon Miller, CMO

About Author

Gilon is a seasoned marketing, sales and business development executive with over 15 years of experience in the software and Internet business. He is the Founder and CEO of GuruShots. Previously, Gilon was the CMO of Upstream Commerce, VP of Marketing at iMDsoft and Director of Global Marketing at SAP. He earned an MBA at the MIT Sloan School of Management and a BS in Electrical Engineering from Tufts University.
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