The first year of the pandemic hit retailers hard and resulted in the closure of 12,200 retail stores in the United States, according to Fortune. The tide turned in 2021 for retailers, though. According to NBC News, Coresight Research data shows that only 5,079 stores closed in 2021, while 5,083 stores opened.
This year, the prospects look even brighter for retailers as they bring back consumers to in-person shopping. Axios cites Coresight Research data showing that from January 1 to 28 alone, there were 1,910 store openings. This represents a three percent increase compared to the same period in 2021. It is also the fastest rate of physical store openings since 2016.
There will be much more activity in commercial spaces being readied as thousands more stores open across the United States. Contractors will be busy, and construction equipment will be rolling in with paint overspray protection and other protective accessories.
The Appeal of Physical Stores
Coresight Research founder and CEO Deborah Weinswig states that brick-and-mortar stores have an impact on the brand image and sales even online. She highlighted that when a retailer shuts down its physical store, its online sales decrease by an average of 50 percent.
Retailers that started as online sellers recognize the impact of having a physical store or selling their products on the shelves of some physical stores. Among those who have expanded their selling methods in 2021 were Glossier, Wayfair, Dollar Shave Club, Bonobos, Allbirds, Casper, and Warby Parker.
What Consumers Want
CO by the U.S. Chamber of Commerce and Retail Info Systems’ RIS News reports on the 2022 National Retail Federation (NRF) conference held on January 16 to 18. One of the topics discussed by CEOs of major retail firms was changes in consumer preferences due to the pandemic. Among those present were Old Navy president and CEO Nancy Green, Best Buy CEO Corie Barry, and Albertsons Companies Inc. CEO Vivek Sankaran. Albertsons Companies Inc. owns the second largest chain of supermarkets in North America, with more than 2,250 stores.
Presented at the conference was a study by the NRF with the IBM Institute for Business Value. Results show that 72 percent of consumers still rely primarily on physical stores for their shopping. However, the same consumers expect their in-store experience to be connected with their online experience all the time. They want to seamlessly move from one to the other with ease.
Sankaran noted that the customers who spend the most money in Albertsons use both digital and in-store engagements. It is, therefore, essential to provide a variety of shopping options, including hybrid ones such as buy online pick up in-store (BOPIS). Barry agreed, saying that even if most of their products have free next-day shipping, 40 percent of their online sales are for store pick up as requested by the buyers.
Barry stated that customers now expect consistent service from a store across various channels. She cited as an example a customer calling a store to inquire about an item, followed by an online order for store pick-up. Later, the same customer can request a home visit from a technician if there is an installation problem.
Consumers also expect stores to be inclusive and to provide what they need. Green stated that Old Navy had expanded its plus-size business, which was previously not being focused on. In addition, the company is pricing its plus sizes the same as the standard sizes of the same item. This is a departure from the tradition of pricing plus sizes higher. To further improve its service to customers, Old Navy established a training program for its in-store associates. They learn not only about the new products but also about body positivity and how to engage with customers.
New stores will be maximizing technological innovations to make the physical experience more aligned with the digital shopping experience. Several companies presented new products during the NRF conference.
OnQ is a manufacturer of custom retail displays. Its Converge Display Control enables customers to scan a QR code on their phone to control the interactive content in the store’s network-connected TV display. The interactive experience is, therefore, touchless.
GRUBBRR presented its latest self-checkout technology. Its computer vision and AI can simultaneously scan and identify multiple items on the counter for quicker checkout. The payment that follows is contactless. The technology is affordable and, therefore, more accessible.
Toshiba Global Commerce Solutions expanded its ELERA unified commerce platform. Among the products it presented at the conference was a self-service kiosk.
NewStore presented the NewStore Consumer Apps, which it developed after acquiring Highstreet Mobile. The app enables retailers to create mobile experiences exclusive to their brand that unifies their physical stores with their online channels.
It will be exciting for shoppers to visit the newly opened physical stores this year. It will be a hybrid shopping experience.