Shopping in physical stores may be coming back in style.
NPD Group reported at the end of November that in-store retail sales had risen to pre-pandemic levels, while the growth of online sales was slowing.
“Physical stores are more relevant today than they were before the pandemic,” said Marshal Cohen, chief retail industry advisor for NPD. “Consumers are no longer buying primarily out of necessity and limited to online shopping, which fell short of some expectations — choice has reentered the equation, and they are hungrier than ever for the experience of in-person shopping.”
Another indicator is that, after several years when massive numbers of stuttered stores prompted “retail apocalypse” headlines, Coresight Research’s store closing tracker found that store openings outpaced closings in 2021.
But smart retailers realize that online sales are still growing, albeit more slowly, and consumer expectations about shopping — both online and in stores — are changing.
Hence Walmart’s latest store concept, which debuted recently in Springdale, Ark. The format aims to make the shopping experience more engaging and enjoyable for consumers, and it includes digital features as well as an enhanced physical environment designed to let customers touch and feel products.
Coresight Research founder and chief executive officer Deborah Weinswig contended in a recent “Weinswig’s Weekly” report that the Walmart concept store’s emphasis on experience shows one of the places brick-and-mortar retail is headed.
Coresight Research’s “Future of Physical Stores Matrix” suggests four key roles physical stores can serve going forward: Convenience (offering handy venues for last-minute purchases), Collection (being places to pick up online orders or ship them out), Discount (having low prices instead of multichannel service/convenience) and Destination (offering “spectacular retail for leisure shoppers”).
Weinswig sees Walmart’s tilt toward experience as part of a “new department store” model that attracts leisure shoppers, woos top brands and has screens to support the retailer’s own in-store advertising business.
“In just one store, Walmart tells us much about multibrand, multichannel retailing in a digital age,” Weinswig concludes.