Why stores will still be relevant in a post-pandemic era
We all know that the pandemic has digitized the world even more, but stores have something webpages or apps can’t replace: the five-senses experience.
You’ll ask, but wait, don’t you see a clear trend towards digital sales?
Yes, there’s certainly a migration to the online world.
- During the pandemic, digital game sales have surpassed physical sales for the first time in the videogame industry.
- Since 2007, the online share of retail sales has almost tripled, increasing from 5.1% to 16% of all retail purchases in today’s economy.
- There’s been a 30.1% increase in e-commerce sales in the US from last year in the same period, compared to only a 4% increase in retail sales.
But buying certain brands didn’t just happen overnight.
Companies invested heavily over the years to get people to spend on them now that they’ve digitized. Part of this success is because their physical stores paved the way for their online consolidation.
People have already experienced these brands in the physical world and now it makes sense to seek them out in the online world.
You can’t replace an environment experience, that activates all your senses and sprouts social interactions, with an online journey. Unless it’s Star Trek’s Holodeck, the virtual world can’t compete on this level of experience.
Here’s why physical stores will still be relevant in this increasingly online world we’re creating around us.
We Find Excitement in (Re)discovering the Outer World
Companies are continuously optimizing the shopper’s e-commerce walkthrough.
Clients rely on how convenient it is to purchase their stuff. Platforms try to make it is as simple and efficient as possible so that customers keep coming back for more.
This comes at the expense of experience. They make it easy to shop, but the thrill of discovery is lost in the process.
When shoppers look around a store, they might have something in mind they’d like to buy, but they don’t usually go straight to the product. It’s not like they’re going to aisle three, section B, to get their stuff and leave immediately.
They walk around, glancing at many things along the way. They touch, try on, and then proceed to another item. They’re feeling the fabric, comparing it with other similar items, and learning more about it while talking with the vendor.
And once they find something they like, they’re provided with a rewarding experience.
You won’t believe what I found the other day at the store, let me show you, they’ll say with excitement. The experience is two-fold, they get to experience the satisfaction of buying their product once again while showing it to their friends and family.
In this instance, the thrill of discovery surpasses the feeling of an efficient delivery system.
Rural Stores — A Hidden Gem for Small Firms
Having a physical presence in smaller towns is not appealing nor commercially viable to large companies.
Isn’t this an opportunity for small to medium firms?
Town residents may feel neglected by larger brands and thus, these other smaller brands can step their game and enhance loyalty among the locals.
Plus, people don’t expect to have a branded experience in towns with a slower-paced daily life. New types of retail experiences, like retail tours or pop-up experiences, can capture their eye even more.
This is especially important in the ongoing battle for attention these days.
Smaller players could benefit from lower competition in more rural areas.
Making Stronger Bonds With Your Customers
When you connect with someone through a social platform first, you start building up a relationship in the virtual world. You exchange messages, share links and photos, and eventually, you start transitioning into physical contact.
First, you phone each other and then you end up meeting in a coffee shop or any other public space.
With each new step, your bond gets stronger and the relationship improves.
The same can happen with your relationship with a brand.
A brand’s strong online presence can be balanced with a physical presence. It can improve the relationship with their customers through physical contact, and make the bond even stronger.
People want to touch the product, ask questions to a well-informed salesperson, or get some advice on further purchases. And this can translate into benefits for the company.
Recent research on the relationship between digital retailers and physical stores showed some interesting results:
- After visiting a physical store, clients tend to return fewer items.
- Clients spend 60% more on average and purchase 20% more categories when visiting a store. Buying casual shirts for instance can lead to also buying dress shirts.
Digital retailers that open physical stores can also benefit from the zero-inventory idea — you get to see the products on display but there’s no inventory you can take home afterward, like a showroom.
You cut costs of carrying and having inventory sitting around but customers still have the experience of feeling your product.
There are many options available and brands can choose the one that better suits their customers.
We’re in a moment in time where we have the technological capacity and necessity to migrate to a virtual world, but that doesn’t mean there’s no place for physical stores.
In fact, there are multiple benefits from having a palpable presence for customers to see and feel your products.
- Psychological reason: we are creatures that need to have new experiences and feel a sense of wonder around us. Physical stores help achieve that purpose.
- Competitive reason: small and medium-size companies can settle where big companies won’t and this includes more rural areas. The neglect by big brands and the lack of better options can drive new customers and enhance their loyalty towards these smaller enterprises.
- Financial reason: stronger bonds with customers, by reinforcing the relationship through multiple channels, also translates into a sales increase. More expensive items are purchased and fewer items are returned.
The future of shopping involves a mix between the physical and the virtual world.
We’re morphing into an omnichannel communication system which includes channels such as websites, apps, physical stores, home services, catalogs, and more.
What internet companies lack can become one of their main assets: stores transforming into actual temples of the brand.
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