Retail as we once knew it is changing dramatically. Partially fueled by the pandemic and partially driven by new consumer habits, retail is shutting the doors of many brick-and-mortar locations.
According to a new report from UBS, 80,000 retail stores — the equivalent 9% of all stores — will close in the U.S. by 2026.
However, although we will see a large number of retail stores close in the next five years, this does not mean that retail stores are going away. Instead, the future of retail is evolving to create an improved partnership between physical and online stores.
The presence of stores might diminish, but a new, leaner approach to physical locations will involve a careful meld of digital and physical experiences.
Retail businesses of the future will drive increased sales through a strategic investment in omnichannel marketing and experiences.
The Future of Retail
With retail on the precipice of a major change, businesses in this space are taking note. After all, just because shopping habits are changing does not mean that consumers are no longer making purchases.
In fact, UBS’ prediction that the total number of stores in the U.S. will be at 797,000, down from 878,000 by 2026, is paired with an assumption that eCommerce as a percentage of total retail sales will jump to 27% — up from 18%.
Rather than sales disappearing, they are simply transitioning from brick and mortar to eCommerce. Arguably, this eCommerce penetration of the market is, in part, what is driving store closures. USB calculates that for every 1% increase in eCommerce penetration, about 8,000 stores will need to close.
Businesses seeing the largest uptick in store closures are clothing and accessory stores, with a projection of 21,000 closures. On the other side of the spectrum are home improvement, grocery, and auto part stores, which will see the fewest closures as less of their business is being siphoned to eCommerce sales.
A Shift in the Storefront’s Purpose
With eCommerce pulling sales away from brick-and-mortar locations, what will become of traditional storefronts?
The reality is that stores will not diminish in importance; rather, they will play a different role in the sales process for major retailers. In fact, brands such as Target and Dick’s Sporting Goods are already demonstrating this trend. These stores are using their storefronts for merchandise delivery services, such as curbside pickup and shipping items from stores to consumers.
The future of retail looks to include an evolution of stores, where these locations become the center of customer interaction. UBS says eCommerce fulfillment from stores will rise to 20% in 2026 from 10% in 2020.
To drive sales going forward, savvy retailers must better marry the relationship between their brick-and-mortar locations and online platforms. This will result in a seamless omnichannel experience.
Rethinking Retail with An Omnichannel Strategy
Rising out of the ashes of retail store closures is omnichannel eCommerce — a phoenix capable of giving flight to increased revenue and brand loyalty.
In order to align your brick-and-mortar store with your eCommerce website, an investment in omnichannel marketing is essential.
An omnichannel strategy hinges on one crucial idea: Leveraging existing physical assets and providing a seamless shopping experience through brick-and-mortar stores and digital channels differentiates you from your peers and gives you a competitive edge over online-only retailers.
In fact, a Harvard study found that 73% of shoppers engage with brands via multiple channels. Not only that, but this study revealed that shoppers who use more than one channel to shop with a retailer are worth more. Omnichannel shoppers spend 4% more than their single-channel shopper counterparts. Additionally, they spend 9% more in brick-and-mortar locations.
For example, Best Buy recently announced that it plans to shrink its sales floors at stores to utilize more space for servicing eCommerce orders.
Using their stores to leverage their eCommerce game is a brilliant move that will enable Best Buy to increase overall sales.
Further underlining the importance of an omnichannel strategy, Harvard’s study showed that these multi-channel shoppers are 23% more likely to make a repeat purchase with a brand and recommend a brand to family and friends.
Mapping Your Customer Touchpoints
From the above Harvard study, another important trend emerged. Omnichannel customers are big fans of using multiple touchpoints to interact with a brand. Not only that, but they use touchpoints in a variety of combinations and places.
For example, they might use an app on their phone to compare prices and download a coupon, in addition to using an in-store interactive catalog or price-checker. In some cases, they make their purchases online and want to pick up their products at a physical store. In other cases, they buy items at a brick-and-mortar location but request that these items be shipped directly to their home.
The conclusion is that in order to create an effective omnichannel strategy, it is important to understand current customer touchpoints and how your customers are engaging with you across those touchpoints.
Mapping out your customer’s journey can help you better understand the channels and paths that are leading to the most valuable conversions.
Envisioning Seamless Engagement
With your customer journey mapped out, the next step is to use available research and data from other companies and sources to envision how your customers can better engage with you more seamlessly.
It’s key that you make sure your brick-and-mortar experience is consistent with your online experience.
In other words, make your customers feel like you know them. Avoid situations that require customers to communicate information to you multiple times.
It doesn’t mean that the experience you serve in each channel must be identical, but it must be consistent.
For example, if a customer first interacts with your brand via a social channel, their information should be stored and accessible later to an in-person sales rep. The interaction might look different, but the customer should feel known and remembered and the overall experience should feel seamless to the consumer.
Choose the Right Platform
Omnichannel eCommerce can only be effectively accomplished with the right tools.
If you don’t already have an eCommerce site, select an eCommerce platform that can facilitate omnichannel commerce.
A great example of a platform designed for omnichannel marketing is Adobe Commerce, a component of Adobe’s Experience Cloud. Adobe Commerce helps you create experiences that integrate seamlessly on mobile, social, or in-store, ensuring that you bridge the gap between your brick-and-mortar locations and your digital presence.
Additionally, Adobe Commerce is capable of scaling with your business. By fully integrating with other critical Adobe products, such as Experience Manager Assets, your brand can manage everything from inventory to content assets to customer data.
A key takeaway from brands that are already leading the way in the omnichannel experience, such as Best Buy, Target, and Dick’s Sporting Goods, is a full integration of all commerce systems.
Integrating your POS system is critical to ensuring consistency across your brick-and-mortar and online store.
The same inventory and pricing should be available regardless of if your sales staff is accessing information via an in-store POS or an online catalog. Not only that, but by integrating your POS system with your eCommerce platform, you will also be able to manage inventory better, understand sales cycles, and feed this data into future marketing strategies.
Invest in Product Information Management
If you have a large number of SKUs and touchpoints, invest in a Product Information Management (PIM) solution that provides consistent product content and data across all sales channels. A PIM solution should act as a single place to collect, manage, and update product information.
Investing in quality PIM will ensure consistency across platforms and make it easier for you to surface meaningful product data at the right time and in the right way to specific audience segments.
Setting up a system for PIM early on is critical to securing long-term success for your brand. While it might seem feasible to manage your product information right now, imagine a scenario in which you are trying to manage the same data across a dozen platforms. PIM will only increase in importance as more and more channels for commerce continue to emerge.
Talk to Vaimo about Your Omnichannel Marketing
Omnichannel marketing is here to stay with consumers demonstrating a preference for using multiple touchpoints to interact with brands.
If your business is looking to strategize and create a meaningful omnichannel marketing approach, our team at Vaimo is here to help.
We will work with you to walk through all of the following critical steps:
- Customer journey mapping
- Envisioning new methods for engagement
- Adobe development
- Full integration of POS systems
- PIM that fuels sales
Reach out to learn more about how Vaimo’s expertise can fuel a future where your physical and online stores operate in sync.