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A Brighter Future for Brick-and-Mortar – The Big Bounce Back, a closer look at an industry quickly rebounding

Friday, Jun 25, 2021

The Coronavirus has rapidly hastened the slipping of traditional brick-and-mortar stores. However, despite 2020 being a dreadful year for businesses, consumers continue to enjoy browsing for goods in physical stores – demonstrating the resilience and human need for experience and community, a 2,000-year-old brick-and-mortar model.

While online shopping has become increasingly popular over the recent years due to ease of access, many retailers selling online quickly realized that online return averages are 30% higher and three times the rate of physical stores – forcing online brands to rethink their operational strategies. In fact, excluding gas, auto, and F&B services, retail sales have grown more than 20% since 2016, which is tremendous growth – catching the attention of direct-to-consumer and online-only brands, presenting a tremendous upside opportunity and indirectly forcing a move from online to physical stores.

According to the ICSC industry benchmark report, 61% of people currently engage in a normal level of out-of-house activity. Despite this percentage, 60% of consumers continue to shop in-person for non-essential goods, and 43% are shopping inside of malls – numbers that have been increasing month over month. These are profound statistics considering how the pandemic has affected families everywhere. Though many consumers have seemingly ‘taken a break’ from normal activities, an impressive amount of people have remained active within the in-person retail world and have kept cash flowing.

Keeping in mind how many people still feel uneasy about resuming their pre-pandemic daily activities, it is foreseeable that some people worry about cutting down on safety restrictions. Although 34% of people have stated they are not entirely comfortable with the way restrictions are being reduced, in a recent survey, nearly 80% of shoppers wanted fitting rooms to open this year. That percentage yields a large number of shoppers who, in time, will end up returning to malls and retail stores.

COVID-19 has forced retailers to adapt and change to this new consumer world. It comes as no surprise that e-commerce has spiked in activity in the last few years as consumers prefer faster, easier, less stressful shopping. As a result, retailers were forced to introduce or advance different routes that consumers can take in order to buy a product through their store and keep profits up. For example, buy-online-and-pickup-in-store (BOPIS) and buy-online-ship-to-store (BOSS) are two things that retailers have been utilizing to keep relativity. By allowing customers to order online and do an inside or curbside pickup for their item, retailers have made the act of shopping at stores feel like less of a mission. Additionally, after witnessing the resilience of brick-and-mortar retail, the digitally-native retail service provider Afterpay, an installment payment app, recently announced the expansion into 60,000 physical stores.

As time continues, stores will go on to learn and perfect aspects of getting goods to consumers. Retailers are challenged with evolving their methods to overcome this rapidly changing consumer environment, but retailers needing to think outside of the box is anything but unusual or out of the ordinary. Malls and retail stores are being set up for a big bounce-back; if anything, COVID-19 is just the catalyst to spark their revival to come back stronger than ever.

 

Source: ICSC Benchmark Report
Photo Credit: Pexels

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Article Topics: Growth | Industry Outlook

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