Why Retailers Should Avoid Clicks Without Bricks
A recent article in Retail Touchpoints explored the telling interdependency between a retailer’s physical stores and its e-commerce presence. Insights from the International Council of Shopping Centers (ICSC) revealed that 56% of digital shoppers say that when buying online, it’s important that the retailer also have a brick-and-mortar presence near their home or place of work.
The ICSC study, titled The Halo Effect: The Convergence of Clicks and Bricks, found that when a retailer opens a store, web traffic in that market increases by an impressive 37%. Greater brand awareness is what’s at play here. If the store closes, the opposite will happen, according to the research, and fewer people will go to the retailer’s website in that market. Out of sight, out of mind.
From a consumer demographics standpoint, the study found that 63% of Millennials want to know that a retailer has a physical store nearby when they make an online purchase. The ICSC believes this is because this generation places a high priority on convenience – they want the assurance of a brick-and-mortar location if something goes awry with their purchase. The Retail Touchpoints article points to Warby Parker, UNTUCKit and Casper as retailers that have their roots in e-commerce but have found success with this strategy.
Interestingly, the research shows that Gen Z values the ability to physically browse the aisles and shelves in a physical store. In fact, 95% of Gen Z shoppers enjoy going to a mall at least once a month. This generation values the social aspect of visiting a store, despite their youth and reputation as digital natives. Three-quarters said they go to a mall specifically to shop, and 56% indicated they make the trip to socialize, according to the ICSC report.
That said, the interrelationship between a retailer’s online and physical presence is also having an impact on commercial real estate. According to the article, malls and shopping centers are creating a different tenant mix by becoming more experiential. There’s a greater emphasis on combining more food and beverage companies with formerly online-only brands in malls and shopping centers in order to create better experiences for shoppers. Smaller spaces and shorter leases are also in favor.
It's clear from research like this that the physical store – despite substantial gains in e-commerce in recent years – is not going anywhere. That’s why it’s so crucial for retailers to align their digital and physical store operations, ensuring their customers find exactly what they are looking to buy, in the right location, at the right time regardless of the channel they shop.
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