By Greg Sterling
Although there’s COVID fatigue and a desire to “return to normal,” consumer habits have shifted during the lockdown. Whereas the store was the primary focus of most shopping in the past, now the Internet has taken over. The physical store experience — at least for the foreseeable future — has become secondary. Most consumers are still uncomfortable going into most retail stores, other than grocery.
The store now becomes a showroom and fulfillment or pickup location for online orders (BOPIS, curbside). Most consumers are interested in efficiency: get the product and get out, rather than browsing and shopping for entertainment. Consumers are also looking to stores in many cases as a faster way to get products vs. online shipping. To that end, they’re interested in real-time inventory information that helps them locate and buy products, rather than taking speculative trips to different stores to find items on their list.
But they’re increasingly agnostic about where they get products: online or off. The pandemic created millions of new online buyers. And those buyers are typically going to shop at familiar retail destinations, especially Amazon. (Retailer loyalty programs become more critical.) They’re also relying heavily on Google search. And most searches are product-based and not retailer-branded. This is another reason online inventory is important: for ranking and visibility. In addition, local store information is critical, even to online shoppers.
Beyond consumer habits, the retail industry will be changed forever. Many U.S. malls will close and many large retailers will reduce their physical store footprints. Because of the financial instability of many retailers, brands that are sold primarily through stores will need to develop a DTC business — indeed every brand now becomes a DTC brand.
E-commerce as a percentage of total U.S. revenue will likely grow to 15% by late this year or early next, and potentially 20% or more in the second half of 2021. However, retailers with stores will still have an advantage over most pure-play e-commerce sellers if they can better integrate their online and offline operations. Stores become both faster ways to get products and return centers for online purchases. A new hybrid model represented by BOPIS — which is neither pure e-commerce nor traditional in-store shopping — will become increasingly common. When the pandemic ends, people will return to “normal” in-store shopping. But those shoppers will look to retailers to provide a uniform and convenient experience online or off. Convenience is critical to success.
Those that can accomplish this — execution is challenging especially for many small retailers — will survive. But it all starts with online presence; this is the first and primary touchpoint now for retailers and brands.
Greg Sterling is a digital marketing expert and VP of market insights for marketing company Uberall.