The death of physical retail stores has been greatly exaggerated. Although there have been numerous store closings and bankruptcies, some retailers (e.g., Macys, Target) have recently reported strong earnings and are seeing more in-store customers. In addition, there has been growth in store openings for some chains.
But it’s certainly true that physical retail needs to change if it’s going to thrive against the backdrop of e-commerce and increasingly demanding shoppers. Location intelligence company GroundTruth recently released a survey based report that sheds some light on areas where retailers need to invest to keep their stores competitive.
Shoppers hate checkout lines
Based on a survey of 2,000 US consumers, the report identified major offline retail shopping pain points, including crowds and long lines. It also ranked a number of factors that consumers say would make in-store shopping a better experience:
- Quick checkout — 81 percent
- Self-checkout — 76 percent
- Good customer service/ helpful sales people — 66 percent
- Sample of things I might want to buy — 64 percent
- Ability to buy online and pick-up in-store — 58 percent
- Technology I can try (kiosks, games, virtual reality) — 45 percent
- Experiences and entertainment (music, videos, interactive display) — 41 percent
- Events (pop-ups, workshops, classes) — 33 percent
Despite not wanting to deal with crowds and lines, the majority of survey respondents still preferred to buy things in stores in most categories. Exceptions were in the categories of electronics, apparel and, surprisingly, furniture, where people were more agnostic.
Not discussed in the survey report, one of the untold stories of e-commerce involves the role of the store in taking the risk out of buying online. Shoppers often buy online from traditional retailers because they can return products offline if not satisfied.
Consumer shopping preferences
The importance of good service
Another area explored in the report is the role of in-store service. The survey found that strong service can lead to customer loyalty, with 81 percent of respondents saying they are likely to return to a store where service is “exceptional.” In addition, 75 percent said that they would be likely to recommend that store/brand to friends or family when they experience strong customer service.
The notion that service is important to shoppers is both well established empirically and pretty intuitive, though many retailers for years have been lowering costs by reducing the skill level of their in-store associates. There are of course clear exceptions to this. But many retail workers are present to operate cash registers or answer very basic questions rather than provide genuine advice or input into purchase decisions.
The GroundTruth findings argue that retailers should invest in technology to enable faster checkout and hire sales and support staff that can really be helpful to in-store shoppers.
Consumers expect to continue shopping in stores
Across categories, the majority of survey respondents said they intended to maintain or increase current in-store shopping levels. Categories that are likely to grow the percentage of e-commerce spending are shoes, clothing and electronics.
Expected change in future shopping preferences
Finally, retailers have always regarded in-store shoppers as more valuable than online buyers. That’s because they’re more likely to buy additional items when present or when they return past purchases. The survey provided additional validation for this perception: 38 percent of respondents aid they spent more in-store, while only 18 percent said they spend more money online. The remaining 44 percent estimated they spent an equivalent amount online and in stores.
About The Author
Greg Sterling is a Contributing Editor at Search Engine Land. He writes a personal blog, Screenwerk, about connecting the dots between digital media and real-world consumer behavior. He is also VP of Strategy and Insights for the Local Search Association. Follow him on Twitter or find him at Google+.