Why are physical sales channels the business’ backbone?
It’s well-known that the Internet is becoming an increasingly important channel for merchants. Even while total retail spending has declined, eCommerce sales have gradually increased in recent years.
The stunning results may obscure the fact that eCommerce still accounts for a small fraction of overall retail sales in the United States, the figure is as low as 14.5%, according to eMarketer data.
It also implies that over 85% of shopping still occurs in physical locations, making synergy between online and offline essential to retail success in the foreseeable future.
What Are the Benefits of Physical Sales Channels?
These eight arguments support the continued investment in your physical sales channels.
1. Customers are more likely to purchase more items in-store
Curbside pickup and click and collect, commonly referred to as BOPIS, or buying online and picking up in-store, are very well-liked by both consumers and merchants.
Pickup can be more convenient for clients than home delivery since it allows them to acquire their items when they choose, rather than waiting for a delivery at home.
In-store pickup has several advantages for retailers: it is less expensive than shipping, it pulls customers through the doors, and it can lead to larger purchases.
According to Forrester research, 30% to 40% of click-and-collect customers purchase extra things when they enter the shop.
2. Lesser Returns Costs
Products purchased in physical stores are less likely to be replaced than those purchased online. “Shoppers return 5-10% of what they buy in-store but 15-40% of what they buy online,” says David Sobie, co-founder and CEO of Happy Returns.
Eliminating the shipping and transportation costs for the merchants and allowing customers to exchange or return online-purchased goods in-store can also assist in lowering the cost of returns.
According to NRF research, 80% of consumers prefer to return things in-store rather than mail them back.
3. Consumers can feel the Product
According to a KPMG study, the primary reason why people prefer to shop in physical stores is to view, touch, and test things before purchasing them.
Having an accurate site where consumers can go to confirm that, yes, this paint is precisely the color they want helps relieve consumer worries and help complete a transaction. Additionally, in-person shopping might lessen the possibility of a purchase being returned for an incorrect size, color, or material.
4. Excellent one-on-one customer service
Despite the growing popularity of Internet shopping, the human touch remains a vital component of the retail experience.
According to a RetailEXPO study, over two-thirds (64%) of customers believe educated sales associates make them more willing to visit a physical store, and three-quarters (75%) of shoppers think they are inclined to spend more after obtaining excellent service from in-store workers.
5. Free market research
After 13 years of solely selling online, fashion firm ModCloth launched its first physical shop. “We discovered small things, the details our customers love,” ModCloth president and CEO Matt Kaness told USA Today. “They loved linings in dresses and skirts, and they loved pockets.”
Although data from an online store can assist in identifying patterns, businesses can learn a lot about their consumers simply by seeing them buy and engaging with the space and items.
“From the standpoint of market research, [a store] pays for itself.” The quantity of market research gained simply by monitoring individuals is comparable to 100 focus groups, according to Sucharita Mulpuru, senior analyst at Forrester Research.
6. Unforgeable brand experience
The retail business is highly competitive. While it might be challenging to stand out online, a physical shop allows you to create a compelling brand experience.
Showrooms and concept shops may help businesses immerse customers in their brand culture, resulting in long-lasting impressions.
Crafting a moment that strikes an appropriate balance of assurance, enthusiasm, and accessibility is essential and may help distinguish your business from your rivals.
7. Stores are an integral aspect of your supply chain
Logistics expenses in omnichannel retail can quickly spiral out of control, eroding profits drastically.
Some retailers save money by leveraging some or all of their physical locations as dormitories and distribution centers to assist and enhance their supply chain.
Transforming a shop location into a “dark store” might assist in lessening the handling of inventory expenses while broadening reach over greater jurisdictions through faster, more profitable, and more efficient distribution.
8. Physical storefronts drive more visitors to your online platforms
According to a study conducted by the International Council of Shopping Centers, when a company establishes a new physical shop location, traffic to their online store improves by 37% the following quarter.
According to L2’s research “Death of Pureplay Retail,” when merchants create new physical locations, the number of online mentions and searches for the brand increases considerably. This online buzz is accompanied by higher financial returns, making physical businesses a clever investment in terms of both fame and cost-effectiveness.