The new shopping reality is omni-channel, which is a “totally synergistic relationship” between physical and digital shopping experiences.
As popular as online shopping is, still the “vast majority of all sales take place in a physical store.”
In fact, 85.7% of all retail sales are transacted in a physical, brick-and-mortar store.
Yes, some very well-known retailers are closing stores. But that’s not the story — not by a long shot.
According to new research from IHL Group, North American retailers will open 12,663 stores and close 8,828 stores in 2018, for a net increase of 3,835 store locations. The report found that a handful of retailers (16 companies) represented 66% of the total number of store closings. For restaurants, 16 companies represented 74% of all net closings.
“We can’t emphasize enough that the closings have been driven by a handful of retailers, not the entire market,” IHL stated.
Brick-and-mortar stores continue to realize sales growth. After an exceptionally strong year of retail sales increases in 2018, brick-and-mortar retailers in the U.S. will see a year-over-year revenue increase of 3.04% in 2019 according to the IBM 2019 Retail Forecast.
Consider the following facts:
- 7% of all retail sales are transacted in physical stores.
- 95% of all retail sales are captured by retailers with a brick-and-mortar presence.
- Only 5% of all retail sales are attributed to pure-play online merchants.
- Two-thirds of consumers who purchase online use the store before or after the transaction.
- 20% of all shoppers are store-only shoppers.
Former pure-play only retailers are rapidly realizing that to maximize customer engagement and sales penetration, they must add brick-and-mortar stores to their distribution model. Notable former pure-play retailers currently opening physical locations include:
- Warby Parker
- Frank & Oak
- And many more!
Popular online home furnishings retailer, Wayfair, recently announced the opening of their first-ever, physical store — and it is opening IN A MALL!
Scott Galloway, NYU-Stern School of Business Clinical Professor of Marketing, has been quoted as saying: “E-commerce companies are either going to open stores or go out of business. Stores Are the New Black.”