We are moving quickly toward a world where it no longer makes sense to talk about “online retailers” and “traditional retailers.” Increasingly there are just retailers, who allow their customers to shop however they like.
The merging of physical and digital retailing is the main takeaway from this year’s “State of Retail Online” study from the National Retail Federation (NRF) and Forrester.
“This report shows more than ever that retail is retail regardless of where a sale is made or how the product is delivered,” NRF vice president for research development and industry analysis Mark Mathews said. “Products ordered online are increasingly picked up in-store or shipped from a nearby store, and digital technology being used at bricks-and-mortar locations lets retailers help customers find what they want or make the sale even if the product is out of stock.
“Traditional retailers have seen the opportunities of online selling for years now, and those selling online increasingly see that stores are part of the key to success.”
In keeping with Mathews’ view that physical stores remain an important part of the retailing equation, 43% of the store-based retailers surveyed said they expect to finish the year with more brick-and-mortar stores than they have now, versus only 16% who said that they expect to have fewer stores.
Not all of tomorrow’s brick-and-mortar stores will look like today’s, however. The survey found that retailers are evaluating their real estate assets and in some cases are repurposing them. Among survey respondents, 24% said their plans include opening some kind of pop-up store, and 12% said they are opening new warehouses and distribution centers.
The study suggests that new store locations are an important way for retailers to get the products consumers buy online into their hands. The survey found that “buy online, pick up in store” services are a priority for 21% of omnichannel retailers, while 15% said ship-from-store capabilities are a fulfillment priority.
The survey also found that retailers’ digital efforts are paying off. Seventy percent of the retailers surveyed noted that online conversion rates (the number of people who look at an item online and actually buy it) increased in the past year. Other good news includes the fact that 62% of retailers said repeat customers were up, and 57% said average order values were up.