Are you ready for the consumer shift to physical retail?

In 2024, retailers are expected to shift their focus towards providing more physical and in-person shopping experiences for their customers. This change is driven by the recognition that physical retail stores have a higher average conversion rate, typically ranging from 20-40%, compared to the average conversion rate of online shopping or e-commerce platforms, which is estimated to be between 1-3%.

While online shopping sales continue to experience growth, it's predicted that this growth rate will gradually slow down as more customers opt for in-store shopping. Several factors contribute to this shift, including increased shipping costs, sustainability concerns associated with excessive packaging and emissions, and the unique advantages offered by brick-and-mortar shopping, such as the ability to physically interact with products before making a purchase.

The Consumer Shift to Physical Shopping

To capitalise on this trend, brands are expected to embrace in-person and hybrid shopping models. Even digitally-focused brands are likely to expand into the realm of in-person commerce, leading to heightened competition in the physical retail space. This diversification of shopping options will provide consumers with more choices and opportunities to engage with their favourite brands.

Retailers need to recognise that committing to a long-term, full-scale approach may not be necessary. Instead, they should consider how they can intermittently provide their consumers with the opportunity to experience their brand firsthand. This could involve hosting pop-up events, showcasing limited edition products in physical stores, or organising exclusive in-store shopping events. By doing so, retailers can create a sense of excitement and exclusivity, driving customer loyalty and enhancing the overall brand experience.

Considering Omnichannel

Retailers also need to prioritise and invest in enhancing their omnichannel approach, which encompasses seamlessly integrating their online sales platform with their physical shopping or brick-and-mortar stores. By doing so, retailers can create a cohesive and immersive shopping experience for their customers, regardless of the channel they choose to engage with. This is important due to the rising trend of consumers shopping across various channels. Therefore, retailers must adapt and cater to this evolving consumer behaviour by providing a seamless and integrated shopping experience across all channels.

Reshaping The Expectations of Physical Retail

Finally, retailers with physical spaces already should be maximising it's potential by not only using it as a “showroom” and customer experience centre but also by implementing additional strategies to enhance the overall customer experience. By offering interactive displays, personalised recommendations, and expert guidance, the retailer can create a unique shopping environment that leaves a lasting impression on customers.

Also, brands can organise special events, workshops, and product demonstrations to engage with customers and foster meaningful relationships. By leveraging the physical store as a multifunctional space, the retailer can create memorable experiences that go beyond traditional shopping and establish long-term customer loyalty.

The shift is happening, will retailers be ready?

To receive Strut journals straight to your email each week, join the conversation here.