With all the casualties in the brick-and-mortar retail world, it’s easy to fall into the mental trap that Amazon controls all of retail and is pretty much unstoppable.
And it’s easy to think that, since consumer momentum is trending toward online purchasing, you need to shift all your attention there.
Well, even though Adobe projected online spending to increase to 1 out of every 6 consumer dollars in 2018 (representing 14.8% growth over 2017), that still means 5 out of every 6 dollars get spent in-store.
It’s true online spending grew at a faster rate and stole some market share from in-store purchasing. While online spending was projected to increase 14.8% over 2017, overall retail sales growth increased just 4.5%.
What Keeps Consumers Going In-Store?
Believe it or not, Millennials and Gen Z power the in-store charge. According to Phil Rist of Prosper Insights and Analytics, they enjoy the social aspects of shopping and the fact that it’s become a family tradition.
Kit Yarrow, a consumer psychologist at Golden Gate University, agrees. Part of her research has led her to actually talk to consumers waiting in long lines on Black Friday, for example.
Why would they wake up at 4 in the morning? To score an awesome deal?
Surprisingly – no!
Yarrow found that, after actually talking to people waiting in lines, they’re usually willing to do so because they’ve done just that since they were kids.
But, let’s get more specific than this. Because, after all, if you want to build such a habit in your customers, that’s going to take years (at least).
To be more exact, consumers love “Buy Online, Pick Up In-Store.” They know they won’t have to brave long lines. They know they’ll get exactly what they want. This holds true on Black Friday and (to a lesser extent) throughout the year.
Small independent retailers also raked in a record $17.8 billion on “Small Business Saturday.”
But it’s important to understand why. And in this case it’s because consumers are tired of big box stores who treat you like a number and offer no real customer service.
One retailer noted they allow you to drink alcohol while shopping. They also focus on products that you need to touch and feel to make a decision on. And the company, Lone Star Dry Goods, knows you when you first come in.
Which Elements Can You Replicate?
If you’re interested in growing your physical retail store, you clearly still have plenty of reason for hope.
It all comes down to what you can effectively do at scale. And only you can make the right decisions for your business.