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The Future of Physical Stores in a Post-Pandemic World

With repeated lockdowns, social distancing and anxiety surrounding COVID-19 ensuing in a surge in online shopping, the long-term impact on consumer behaviour and shopping habits are imperative to keep in mind for retail strategy. Many stores have re-opened, and in-person shopping has resumed, but the acceleration of e-commerce over 2020 poses the question: what is the future of physical stores in a world after Covid-19?

The Current View for Retail

The increased shift to online business, means that in-store retail is not predicted to recover enough to make a profit. This is a stark contrast to the soaring profit forecasts for e-commerce, and so the importance of a strong e-commerce presence has never been clearer than now.  Before COVID-19 hit, customers were progressively turning to e-commerce and brands were already adapting to a multi-channel approach to marketing. The pandemic has only seemed to accelerate a trend which we were already seeing across online shopping behaviours, for example, Google reported that consumers under 50 largely specified convenience and ease of purchase as the main reasons they prefer online shopping to in-store.  As these aspects of the customer experience become more of a priority, brands must shift their approach to capture the interest of users not only online, but in conjunction with physical stores. 

What does the customer of 2021 want?

The increased shift to online shopping is not the only change to consumer behaviour following the start of the pandemic. We are also seeing a shift in what customers value when they shop, reflected in an evolving sense of brand loyalty. Over half of consumers did not switch brands during 2020, relying on brands that they had already developed an affiliation with, showing that previously established brand loyalty became invaluable during a time of constant uncertainty.

Convenience and Ease

Whilst brand loyalty was high in 2020, this year customers are more fickle, in part due to the extended reliance on online shopping. As COVID-19 has persisted, online shopping has remained at the forefront of the customer experience, as users are able to spend more time exploring new brands, with 25% of fashion customers buying from new retailers over the past year. The ease of access to e-commerce allows users to constantly discover new brands, opening up key opportunities during the consideration stage of the consumer journey where customers are still exploring their options.

The importance of convenience for the customer of 2021 has resulted in substantial growth for retailers who offer same-day and named-day delivery. Amazon, for example, saw quarterly profits double at the end of July 2020 compared to the end of July 2019. With customers unable to go out and shop in physical stores, retailers that can offer the fastest deliveries, such as Amazon can with its Prime offering, have been able to grow rapidly.

Brands that Share Their Values

As much as the 2021 customer now expects convenience and ease, they are also receptive to brands that align with their values. Last year 22% of customers switched brands as a direct result of disagreeing with how the company handled ethical or social issues. Speaking out about sustainable, ethical values, and fostering dialogue with customer bases has allowed brands such as Glossier to stand apart from other cosmetics brands as unique and authentic. Glossier has focused on e-commerce and an active social media presence to engage with their target audience of millennials and Gen-Z shoppers. In 2020, Gen-Z made up 40% of U.S. consumers, a figure we can expect to see continue to grow. It is therefore key for brands align to the needs of this demographic. Gen-Z consumers want to feel heard by brands, as well as feeling that their values are not only understood but reflected by the brands that they shop with. Brands must consider aligning to the needs of Gen-Z more than ever, not only for the immediate moment, but also to future-proof their e-commerce strategies.

The Impact on Brick-and-Mortar Stores

The acceleration of e-commerce growth does not indicate that the time for physical stores has passed. Across different sectors, such as beauty, fashion, and home, around half of consumers still see value in shopping in-store. This stresses the importance of adapting marketing strategies to consider an omni-channel approach. Rather than considering online and in-store experiences as separate or unique, brands should consider ways that these two channels can work together and complement each other in order to target the new priorities of the customer of 2021.

With online shopping and social media placing consumers in a constant state of discovery, creating a sense of brand loyalty becomes invaluable in retaining and growing consumer interest and interactions. While e-commerce offers convenience, there is an intimate and personalised aspect to in-person shopping experiences that builds an attachment between the consumer and a brand. The importance of crafting a unique in-store experience has been demonstrated by a range of brands, from VANS to Glossier. By curating unique and memorable in-store experiences, small boutiques can generate social media interest and extend their reach.

The creation of an immersive store experience serves multiple purposes: those who become aware of the brand through in-store experience are then able to continue their consumer journey online, while online shoppers may be encouraged to visit brick-and-mortar stores in order to enjoy these unique experiences. Physical stores that provide personalised services, social media-worthy backdrops, and offer more than simply a space for consideration and transaction, can build brand awareness and loyalty with customers. These consumers will then carry their appreciation for the brand over into their online shopping habits for seamless in-store and online experiences.

Image of showroom

How brands can adapt to trends

What must now be considered is how the online shopping experience can be improved to meet the needs of the 2021 customer, particularly at a time where brick and mortar stores may be struggling. With more consumers discovering brands for the first time, digital marketers, online teams, and brands themselves should be asking themselves how the online experience can be similarly personalised to mirror the intimate in-store experience that many customers value.

  1. Ensure site is well optimised

At the core of this is the importance of a smooth on-site experience. Optimising the customer journey in terms of navigation, site speed, and ease of purchase is key to ensuring the users will not only stay on site to complete transactions, but also are willing to return. This can then be further developed to optimise specific areas of the site, from site search to introducing faceted navigation. Having a site that is easy to navigate is the simple first step – without this, customers are likely to abandon their shopping journey without completing transactions.

  1. Build a strong cross-channel approach

Beyond optimising the customer experience from a technical standpoint, there is a need to take a cross-channel approach to building brand affiliation and strengthening customer loyalty. 81% of consumers want a relationship with a brand, and from a brand-consumer relationship perspective, 45% want to feel that their business is appreciated. Building this sense of appreciation is not limited to digital marketing, but expands out into omni-channel strategy, ensuring that customers feel known and valued both in-store and online. In approaching personalisation from both physical and digital channels, brands can craft highly relevant journeys across a range of touchpoints and can create a seamless experience.

  1. Take personalisation to the next level

Personalisation should not only be focused on driving sales and pushing products at customers. This can have a negative effect of desensitising users. Rather than only addressing customers based on previous purchases to encourage further transactions, the use of personalisation should position the customer at the forefront. Consider an online-only brand such as Bloom & Wild. They continue to send customers discounts and thank you messages after purchases, have a strong refer a friend offer, and send reminders of recurring special occasions such as birthday or anniversaries that you may want to send flowers for. However, their approach to personalisation is not only focused on driving sales, but instead focuses on building brand affiliation by using empathy, exemplified by their opt-out approach called “The Thoughtful Marketing Movement”.

The ‘opt-out’ movement is prime way of how a brand can show appreciation and empathy for their audience, rather than appearing to only value profit. In 2020 for Mother’s Day, Bloom & Wild built on their existing ‘opt-out’ scheme, taking this personalised approach a step further than providing the option to not receive Mother’s Day marketing messages, while still receiving their usual, non-holiday related messaging. The 2020 approach was to provide a personalised view of the site entirely, in which the homepage, navigation, and product pages had no mention of Mother’s Day if users had opted out of seeing this content. By using content segments and applying matching tags to potentially sensitive content around holidays, the brand was able to provide a filtered version of the site that did not contain Mother’s Day-related content. While this approach cannot be applied to physical stores, the concept of “thoughtful marketing” and working to ensure consumers are kept in mind beyond pushing sales can be replicated in other ways.

  1. Remember to say thank you

E-commerce can work to complement physical stores and extend the sense of a personalised and valued experience for consumers. Follow-up communication, ‘thank you’ rewards, and recommended related products do not need to be a result of online-only purchases. With 40% of consumers considering a simple thank you as one of the most important ways for a brand to build on a customer relationship, following up by email or text on in-store purchases with digital receipts is a simple yet effective way to grow brand affiliation.

 

Physical stores are not yet hanging in the balance, but it is clear that e-commerce is holding strong as the favoured shopping method of a post-pandemic world. ASOS has predicted that even once the pandemic ends and a sense of normality is restored, online shopping will continue at a higher rate that pre-pandemic. After a year of relying on e-commerce for purchase, customers have the change to online shopping cemented into their behaviour. To stand apart from a myriad of other e-commerce sites, brands and digital marketers must focus on bringing the personable and human aspects of in-store shopping to the world of e-commerce. In bridging this gap between digital and physical commerce, digital marketers can help support the growth of brand loyalty and affiliation, resulting in a customer base who will interact with a brand across a range of channels, and will continue to return over and over again.

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