The future of physical stores with E-commerce
Rumor has it that we're experiencing the demise of physical stores to the e-commerce boom. Digital is thriving and Amazon continues to grow, which only helps to support the idea that everything will be online in the future. In a report published by KPMG, titled The Truth About Online Consumers, it states that the number one reason people shop online is that they can shop 24/7. In spite of that, 94% of all retail sales still take place in stores.
Are e-commerce and physical stores meant to work in unison?
Paul Martin, UK Head of Retail, KPMG in the UK believes that multichannel is what will bring the most success:
“Companies should be channel agnostic, meaning it does not matter if they start with online or offline, what matters is that all channels are interlinked to give consumers the convenience they need. Online plays a major part in the customer journey or ROPO (research online, purchase offline). The most successful multi-channel companies established their online channels as early as the late nineties, went on to establish ‘click and collect’, eradicated silos across the entire organization and established a channel agnostic incentive program so retail staff do not consider online as a separate business.”
Customers want to have a different experience when shopping and omnichannel seems to have the recipe to save brick-and-mortar stores. A study conducted by Harvard Business Review, dove into the shopping behavior of over 46,000 customers who made a purchase during a 14-month period. What they found was compelling:
"Customers who were exposed to omnichannel spent an average of 4% more on every shopping occasion in the store and 10% more online than single-channel customers. Even more compelling, with every additional channel they used, the shoppers spent more money in the store. For example, customers who used 4+ channels spent 9% more in the store, on average, when compared to those who used just one channel."
What is the role of VR and AR in the future of physical stores?
We've talked about the importance of innovation in retail and how new technologies can provide more precise data and interesting solutions to attract customers and increase sales. Everyone is talking about VR and AR, and when it comes to saving physical stores and supporting omnichannel, these technologies have a lot to show for. From new ways of trying on items to providing new experiences in shopping, here are some examples of how VR and AR are transforming the industry:
Transformation is Key
Physical stores are still generating more revenue than e-commerce and as we can find out from reports and research, there's still hope for brick-and-mortar, as long as they move towards transformation. It is time to broaden the channels and innovate in customer experience. It seems that instead of competing against e-commerce, it is time to embrace it and make it work.
We can only wonder what retail will do to continue this renovation and continue engaging customers in new ways.