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Preview: Why The Retail Store Won’t Survive As A ‘Tech-Free Zone’

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As we have done nearly every year since our company’s launch in 2007, the RSR team recently went out to understand the state of the retail store. This is an especially important time to get a handle on the challenges and opportunities associated with the store. Post-pandemic, it is clear that even when consumers’ shopping journeys begin in the digital domain, they are usually finalized in a physical store. In fact, according to the U.S. Department of Commerce, store-based sales make up approximately 85% of all retail sales in the U.S. If nothing else, what we can glean from that one fact is that “the store” is definitely not dead.

In RSR’s 2022 benchmark study on the state of the retail store[1], we pointed out that “physical stores have a here-and-now opportunity to continue to evolve as a critical component of differentiation from Ecommerce pureplays.” That was a different story than the prevailing opinion just 5 years earlier, when retail industry observers predicted the imminent demise of the store as we know it.

This year, RSR surveyed over 100 US-based retailers to uncover the challenges – and their plans – to bring stores up to speed. What we learned is that retailers are generally upbeat about the future of the store. For example, in the 2022 study (just as the world was recovering from the effects of the pandemic on consumers’ shopping patterns), only 43% of retailers strongly agreed with the statement, “The store remains the primary strategy for the company’s growth.” But in this year’s update, 61% strongly agree with the same statement. That’s the good news.

At the same time we were collecting retailers’ attitudes about the state of the store, we surveyed over 1,000 US-based shoppers to gain a true prospective on how that effort is progressing. The evidence is clear that while consumers like to shop in stores, they want the experience to be more in tune with how they live their lives. Technology has permeated virtually every corner of modern living, and we all enjoy real-time access to information 24X7. But one of the few places where that’s not the case is in the store, which when it comes to consumers is a tech-free zone. While shoppers may enjoy the familiarity of a visit to the store, they don’t want to have their time wasted, they want access to product information while they’re shopping and an experience that is in line with what they get when they sign on the Ecommerce website.

The bottom line for retailers is that consumers may still go to the store – but they can’t take that for granted.

These and other insights derived from our study will be available later this week in RSR new benchmark study on the state of the store, entitled Why The Retail Store Won’t Survive As A ‘Tech-Free Zone’ (sponsored by Jumpmind). Here are some other highlights of what we found:

  • Retailers are more optimistic about how much shoppers “love to browse stores” than consumers are (88% compared to 69% of consumers). This is a warning sign – while it may be good news that over 2/3rds of consumers still enjoy the store experience, 1/3 do not. That’s too big of a segment for retailers to ignore.
  • When asked about the value of accepting returns of online orders in stores, retailers are aglow with the possibilities: 61% see it as a high value opportunity to upsell or cross-sell additional merchandise. In reality, only 40% of shoppers say they look for a similar item, and 43% percent of consumers told RSR that, “I simply return the item and walk out”.
  • When it comes to new technologies, retailers’ desire for new metrics to understand events in stores – particularly adverse events – continues to grow in the wake of the global pandemic. Sixty five percent ascribe high value to a store management portal that will alert them to a whole new host of next-gen KPIs.
  • A surprisingly high percentage or retailers are not happy with many of the tech investments they’ve rolled into stores so far. For example, one-half of those who’ve implemented video solutions to track customers and employees are dissatisfied with their investments, and 46% are unhappy with their investment in POS exception-based reporting tools. A wave of new investment into stores appears imminent.
  • At the same time, retailers’ highest priorities for customer-facing tech in stores are not in line with what shoppers want most. While retailers turn their attention to next-gen solutions like hyper-localized assortments and targeted one-to-one marketing communications, shoppers say they are still falling down on basics like price, product, and knowing who their best customers are. Consumers demand more competence at “the basics” than retailers demonstrate.

As is always the case with our benchmarks, RSR offers a list of go-forward recommendations to retailers, based on what over-performing “Retail Winners” are doing right now to stay ahead of both the competition and consumer expectations.

Look for an announcement for RSR’s new benchmark, Why The Retail Store Won’t Survive As A ‘Tech-Free Zone’. As always, our content is free to everyone.

[1] What Can Retailers Do In Stores That Amazon Still Can’t?, RSR Benchmark Report, February 2022

Newsletter Articles April 17, 2024
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