8 Reasons Why Physical Stores are Still Important for Retail (2024)

January 24, 2022

Submitted by Retail Insights
Reading time: 4 mins

1. Customers who pick up in a store buy additional items

Click and collect, or BOPIS (buying online and picking up in store), andcurbside pickupare very popular with consumers and retailers for its convenience and speed. For retailers, it is cheaper than delivery, brings shoppers in, and it can lead to more purchases. According to Forrester, 30- 40 percent of consumers using this methodbuy more at the store.

2. Consumers are more likely to buy a product they’ve seen in person

The main reason consumers prefer to shop in physical stores is, according to KPMG , tosee, experience, and test products in personbefore buying. A physical location can dispel doubts and help close the sale. In addition, this can reduce the chance of a product being returned for size, color, etc.

3. Personalized customer service increases sales

While eCommerce is popular, human interaction is still important. RetailEXPO data says that more than 60 percent of shoppers feel that knowledgeable salespeople can influence their willingness to go to a physical store, and 75 percent are likely to spend more after getting high quality service in a store.

4. The brand experience is still physical at its core

Retail is very competitive. It’s a challenge to stand out online, but a physical store provides the opportunity todeliver a powerful brand experience. Today, providing an experience that balances safety, excitement, and convenience can differentiate one brand from another.

5. Stores can reduce the cost of returns

Consumers return 5-10 percent of in-store purchases, while the returns from online purchases is 15-40 percent. Also, it costs more when consumers exchange or return purchases bought online than at physical storesbecause it removes shipping and transportation fees. This aligns with what consumers want; the National Retail Federation reports that 80 percent of shoppers say they prefer to return products to a store than send it back.

6. Physical stores can be used as part of the supply chain

One of the problems with omnichannel retail is that the cost of logistics can explode and erode margins. To combat that, some retailers use some or all of their physical stores as warehouses and fulfillment centers–called “dark stores”. This can reduceinventory management costsandexpand their reachacross larger geographies by improving distribution.

7. Retailers get free market research about customers’ preferences and habits

Although data collected from an online store can help retailers see trends,they can learn much about their customers by watching them shop and interact with the space and products.

8. Physical stores attract more traffic to online stores

The International Council of Shopping Centers reported that traffic to websites increases by 37 percent the following quarter when a physical store is opened. Also, when a retailer opens a physical store, the number of online mentions of the brand and web searches increase significantly–which leads to increased profitability.

And that’s not all. AHarvard Business Review survey reported shoppers who buy both online and in physical stores often spend more on average, confirming that physical retail still has a major role to play in their business strategy.

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