Contrary to many assumptions, the increased popularity of online shopping does not obviate the need for brick-and-mortar stores. Consumers’ preference for the store remains strong. Though internet shopping is tremendously popular (79% of U.S. adults shop online and 51% buy products using a phone), 3 consumers are demanding omnichannel—the use of multiple channels for a single purchase—more than they demand pureplay e-commerce. Strikingly, 65% of e-commerce shoppers surveyed by the Pew Research Center explicitly stated that they preferred shopping in the store and online for a single product, as opposed to shopping solely online.
Increasingly, the industry is recognizing that physical stores and internet sales are not direct competitors, but instead are complementary. Several major retailers have stated that a store closure has a negative impact on internet retail sales in that market. Similarly, retailers have reported that opening a new store tends to drive up internet sales in that market.
For most retailers, success will depend on effective integration of both the physical store and online offer to cater to customers’ demand for a seamless shopping experience across channels. This means not only customer-facing integration—such as buy-online, pick-up-in-store options—but also integration on the back-end. Traditional brick-and mortar players must adapt their supply chain and logistics strategies to meet the new demands and logistical challenges of order fulfillment. Both areas of integration—the front and back-end—will require considerable initial investment, but will ensure the long-term viability of the retail brand.