The internet has significantly changed the way customers shop, but the days of booming internet sales may be over. While growth rates for online sales have grown, new research shows in-store retail therapy is alive and well in 2015.
According to the NAB Online Retail Sales Index In-depth report (April 2015) bricks-and-mortar shopping is as popular as ever, with online retail spending representing just 9.6% of total annual retail spend. Further, bricks-and-mortar stores are still opening with an increase of more than 5% in April 2015.
Three key trends are gaining traction within the Australian retail scene:
- Consumers are using stores to get the ‘real’ experience. Despite many shopping journey starting online, if a product is also available at a nearby store, many consumers prefer to purchase in store. A key driver for making an in-store purchase is the ability to ‘touch and feel’ the product before deciding to buy.
- Bricks-and-mortar stores becoming hubs. Bricks-and-mortar stores have become more than just a shopping channel; evolving to act as order fulfilment centres where consumers can browse, pick up purchases they have made online, or return products they purchased online or at other store locations.
- Stores getting smaller. Retailers are rethinking their store format, re-modelling and shrinking to fit.
According to Donna Taylor, UXC Eclipse solution delivery manager – retail, “This is all good news for the bricks-and-mortar store, but there are some challenges ahead. While mobile commerce and e-commerce continue to gain prominence, the need for bricks-and-mortar stores remains and continues to grow. However, retailers cannot ignore the omni-channel approach. Changing stores to adapt to a ‘fulfil ship-to-customer’ model will create inventory headaches for many retailers.
“Retail stores are not warehouses. Traditional store inventory models are based on store sales, not on stock control, so the stock-planning process and the fulfilment logic need to account for variables both in-store and for online sales.
“The challenge for retailers will be how they successfully manage their customers’ expectations. The retail store must enhance the consumer’s shopping experience to gain sales and encourage repeat purchases. Retailers must therefore leverage their retail supply chain to delight and entice their customers.”