Stores are in rapid decline thanks to Covid. You’re probably wondering, in a retail economy that’s shifting rapidly to online/ecommerce, what are the advantages of having a physical storefront? How is the role of a brick-and-mortar storefront changing during the pandemic, and how can retailers extract the most value from having a physical presence?
John Kelly, CEO of Zenreach, has some strong opinions on this. Zenreach helps customers drive foot traffic to physical stores through online advertising. They’ve had great success pre and during covid helping stores and restaurants reach and exceed their revenue goals.
Kelly says, “There is really no substitute to a retail storefront. The creative storefront displays, the discovery of a better pair of pants next to the pants you were looking at, the friendly staff person who will ask you whether you are shopping for an occasion, the instant gratification of the purchase—none of that is replicable online. As more and more people return to stores, retailers need to be able to capture this influx by deploying technology that enables them to understand who their shoppers are and how to bring in more like them.”
I had a chance to interview John to learn more.
What are the benefits to companies to retaining physical storefronts?
Even at the height of the pandemic during last year’s holiday season, in-store walk-ins were still holding at around 40% of the previous year’s numbers, according to the data we at Zenreach collected and analyzed. Clearly, despite ongoing pandemic concerns, customers still prioritize shopping inside of physical locations, and as Covid-related restrictions start to roll back, we expect that trend to continue to accelerate.
Furthermore, research has consistently shown that consumers tend to spend more when shopping in person versus online. One study found that more than 70% of in-store customers spend over $50, and more than a third spend over $100. Compare that to just 54% of online shoppers who spend over $50, and a comparatively paltry 21% who spend more than $100.
That same study also concluded that impulse purchases—items a consumer ends up buying that they were not planning to when they initially began shopping—are also substantially higher for in-person customers: 11% more men and 12% more women said they were more likely to make spontaneous additions to their shopping carts when inside of a physical store.
It must also be mentioned that having a physical presence, especially in a high-traffic area, can provide a huge boost to brand awareness.
How do physical storefronts benefit consumers?
It’s important to note that four out of every five retail dollars are still spent in-store, meaning that despite the explosive growth of ecommerce, a majority of shoppers still enjoy having a tactile shopping experience. Whether it’s trying on an article of clothing, laying on a mattress to see if it’s firm enough, or interacting with an electronic device to try out its features, these elements of the in-store shopping experience cannot be replicated online with the same degree of real-time tangibility. In fact, 82% of shoppers say that interacting with a product in-person makes them more likely to buy.
In-person customer service is another advantage for patrons shopping in a physical store. Good sales associates can answer questions about products, explain features, and make recommendations in a more personalized way. And of course, we can’t discount the significance of instant gratification, where shoppers are able to bring home their purchase the same day and ultimately get to enjoy their merchandise immediately after buying it.
Having a physical storefront also provides an additional layer of credibility for customers who might otherwise be skeptical about making purchases online from an ecommerce brand. Consumers, particularly those who might not be familiar with a brand, are more likely to feel reassured about their purchase if they can make it in person.
How can companies attract the people who are most likely to spend in physical storefronts?
It is vital that brick-and-mortar businesses are able to identify and connect with their most valuable patrons. If you have limited capacity in your store, you want to make sure that you focus on bringing in your loyal, high-value patrons rather than the low-ticket, one-and-done visitors. Zenreach, for example, not only has the ability to determine the most frequent and highest-value customers visiting your physical location, we’re also able to build audience targeting lists for your marketing efforts to drive repeat business.
Our software pairs with your existing WiFi network to provide an online sign-on experience for your in-store visitors while simultaneously enabling customer data collection for merchants. We then use this information to help our merchants become better marketers by providing in-store customer insights, visitation data and trends, and Walk-Through attribution on marketing efforts across email, paid social, and display. In short, we connect the digital and physical customer journey for brick-and-mortar businesses.
Indeed, the retail industry has been moving toward a more omnichannel approach for quite some time. As consumers begin to return to physical stores in greater numbers, and as new technologies, like ours, enable retailers to identify and follow their most valuable customers across the online and offline experience, we will likely see more retailers adopting an integrated approach to the ecommerce and brick-and-mortar parts of their businesses.
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