However, in the post-pandemic years, we have seen retail shopping in physical stores bouncing back and a rebalancing of the online and in-store channels.
A recent Financial Times article, ‘How online shoppers fell back in love with the high street’, explores the main reasons why customers return to stores and the challenges that the ecommerce pioneers in the UK are facing:
- People have returned to the offices and are attending social events again which means that consumers want to try on products in stores before making the decision to purchase. Online retailers struggle to match this.
- It has become more expensive to operate ecommerce businesses – online retailers are facing higher prices for online marketing and logistics.
- European based online retailers are facing growing pressure from Asian online operators, offering products at ultra-low prices.
- While the ability to return items is key to the online model, it is expensive for the online retailers to process returned purchases. To make up for the losses, some online retailers are introducing return fees which might turn off some customers.
- In some countries such as the UK, store rent levels in many areas have declined in recent years making it easier to have and further develop a physical store.
- Customer habits are changing, and channels are increasing being seen and used as integrated – smart phones are used in store to compare prices and check stock availability.
What is next?
While in-store shopping is back in full swing, online retail is not believed to have passed its peak. Experts expect online retail sales growth to rebound to pre-pandemic levels this year.
Going into 2024, having a seamless omnichannel platform seems to be the winning formula for retail operators.
While e-commerce provides convenience, physical stores can create an experience that goes beyond the act of shopping itself. New store concepts, offering a mix of retail, services and leisure can transform physical stores into social hubs where customers can connect with others and enjoy a unique shopping experience.
Access the full article, written by Laura Onita, on Financial Times’ website.