How Online Shopping is Contributing to Growth in Brick-and-Mortar Stores

The technology-driven socio-economic transformation seen throughout 2020 and beyond has changed life in ways that are still unfolding. E-commerce, online social interactions, remote working, and e-learning have drastically altered the landscape of our daily routines, habits, and consumer behaviour. As a result, online shopping has surged, but surprisingly, this growth in digital retail is also positively influencing brick-and-mortar stores.

While brick-and-mortar stores face significant challenges in the modern retail environment, combining physical and digital retail strategies has opened new avenues for growth. It has become evident that customers often conduct research online before making their final purchases at a physical store. This blend of online discovery and in-store purchasing has created opportunities for retailers to thrive in both realms.

The Rise of Online Shopping and Its Impact on Physical Stores

The pandemic drastically shifted buying patterns, many of which are expected to stick around permanently. The most notable change is how people now prepare for their store visits. With easy access to online information, customers are increasingly researching products, checking stock availability, and confirming store hours and delivery options before they even set foot inside a store.

According to research, about 73% of people now report that they don't mind whether they shop online or in-store, compared to 65% before the pandemic. Despite the rapid rise in e-commerce, a significant 74% of purchases are still expected to happen offline in physical stores. This reality creates a dynamic environment in which retailers must engage customers in both digital and physical spaces to optimise their growth.

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The post-pandemic retail world has introduced several new concepts that are here to stay—curbside pickup, in-store delivery, and queue-busting processes, among others. These services have created bridges between online and offline retail experiences. Digital payments have also seen a boom, with methods like UPI transfers, digital wallets, and bank transfers becoming the preferred mode of transaction.

Local grocery stores and small retailers have adapted swiftly by offering curbside pickup and online order options. Many even took digital steps further by incorporating simple e-commerce systems and using popular messaging apps like WhatsApp to accept orders. This new hybrid model has allowed smaller businesses to thrive during challenging times.

Restaurants have also embraced digital channels to stay competitive. Some have shifted their focus entirely to takeaway and delivery, saving on the high overhead costs of maintaining dine-in spaces. The rise of food delivery platforms has enabled them to reach a wider audience, and as a result, many establishments have reported a growth in their customer base due to their online presence.

Building Bridges Between E-commerce and Brick-and-Mortar

While e-commerce continues to grow, brick-and-mortar retailers have started leveraging online channels to drive foot traffic into their stores. Here’s how:

• Omnichannel Retailing: The integration of online and offline channels has become the norm. Retailers are merging physical and digital experiences to provide customers with a seamless shopping experience. This includes offering services like "buy online, pick up in-store" (BOPIS) and curbside pickup. Customers can browse and purchase items online and pick them up from a local store, saving on delivery fees and waiting times.
• Stock Visibility: Providing real-time stock updates on websites or apps has become crucial. Before visiting a store, many customers now check product availability online. This practice ensures that customers make informed choices and reduces frustration from discovering items are out of stock.
• Personalised Offers: Retailers can use online data to track customer preferences and personalise offers, whether customers shop online or in-store. By analysing data collected from e-commerce channels, businesses can better understand their customers and deliver targeted promotions when they visit a physical location.
• In-Store Technology: To enhance the in-store experience, retailers are using digital technologies such as self-service kiosks, mobile checkout systems, and interactive displays. These technologies streamline the shopping process and add a layer of convenience for customers accustomed to digital shopping experiences.
• Loyalty Programs: Connecting loyalty programs to both online and offline channels gives customers incentives to engage with the brand across all platforms. For example, customers might earn loyalty points through online purchases that they can redeem in-store and vice versa.

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The Benefits of Online Shopping for Brick-and-Mortar Stores

• Increased Customer Engagement: Online shopping has opened new channels for customer engagement. Customers now use social media, review websites, and brand apps to research products and provide feedback. Retailers can use this online engagement to enhance in-store experiences by understanding customer preferences and curating their physical stores accordingly.
• Expanded Reach: Even traditional brick-and-mortar stores have now realised the potential of the online marketplace. By creating an e-commerce platform or listing their products on larger online retail sites, small businesses can attract new customers beyond their immediate geographical location.
• Data-Driven Insights: E-commerce generates valuable customer data that can be analysed to inform decision-making in physical stores. For example, if certain products are popular online, retailers can stock those items prominently in stores. This data also helps in planning marketing strategies, seasonal promotions, and store layouts.
• Increased Foot Traffic Through Online Promotions: Online shopping provides retailers with opportunities to create targeted marketing campaigns that drive customers to their physical stores. This can be done through email marketing, social media promotions, and online-exclusive offers that customers can redeem in-store.
• Social Proof: Reviews and user-generated content from online shoppers can help influence the purchasing decisions of those who prefer shopping in physical stores. Customers who read positive reviews about a product online are more likely to visit a store to make a purchase in person.

Challenges and Solutions for Retailers

While the growth of online shopping has benefited brick-and-mortar stores, it also presents some challenges. Retailers need to be prepared to adapt their operations to this changing landscape.

Some of the most common challenges and solutions include:

1. Managing Inventory: With more customers shopping both online and in-store, retailers need to maintain real-time inventory across all channels. This can be managed through advanced inventory management systems that sync stock levels between online and physical stores.
2. Creating Seamless Experiences: Customers now expect the same level of convenience and service when shopping in-store as they do online. Retailers must invest in technology to create a seamless experience across all platforms, whether through mobile apps, contactless payments, or in-store digital tools.
3. Delivery and Fulfilment: As more customers opt for delivery or curbside pickup, retailers need to ensure they have the infrastructure in place to handle these demands. This may involve optimising logistics operations or partnering with third-party delivery services to streamline the process.
4. Maintaining Customer Relationships: Personalization is key to maintaining customer loyalty. Retailers must leverage data from both online and in-store channels to create personalised experiences that keep customers coming back.

The Future of Brick-and-Mortar Stores in a Digital Age

Despite the rise of online shopping, brick-and-mortar stores are not going away anytime soon. Instead, they are evolving to complement the online shopping experience. Physical stores are becoming more experiential, serving as spaces where customers can interact with products before making a purchase, whether online or in-store.

The future of retail lies in creating a fully integrated, omnichannel experience that combines the best of both worlds. Retailers that can successfully merge their online and offline strategies will not only survive but thrive in this new retail landscape.

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How E-commerce is Driving Technological Innovation in Physical Stores

Another way in which online shopping is contributing to the growth of brick-and-mortar stores is by pushing retailers to adopt new technologies. To keep up with the convenience and efficiency of online shopping, physical stores have to innovate in areas like inventory management, customer service, and in-store shopping experiences.

Some of the key technological innovations driven by e-commerce include:

1. AI and Machine Learning: Many brick-and-mortar stores are using AI-driven solutions for personalised shopping experiences. For instance, stores can implement AI-powered recommendations similar to what online platforms like Amazon use, suggesting products based on previous purchases or search behaviour.
2. Smart Mirrors and Virtual Try-Ons: Retailers are increasingly investing in interactive experiences such as smart mirrors that allow customers to virtually try on clothes or makeup. These devices mimic the online shopping experience where users can browse and try on items at their convenience.
3. Augmented Reality (AR): AR is transforming the shopping experience by allowing customers to visualise products in real-world settings. For instance, furniture stores can offer apps where customers can see how a couch or table will look in their living room before purchasing. This technology enhances the in-store experience, making it more engaging and informative.
4. Mobile Shopping Apps and Payment Solutions: Retailers are also investing in mobile shopping apps that allow customers to make purchases directly from their smartphones, even while inside the store. These apps often feature contactless payment options, scan-and-go checkout, and personalised promotions.
5. In-Store Analytics: With the help of advanced data analytics tools, brick-and-mortar retailers can analyse in-store behaviour to understand customer preferences, popular products, and store layout efficiency. This data can then be used to optimise the shopping experience, similar to how e-commerce platforms use website analytics.

In conclusion, online shopping is not a threat to brick-and-mortar stores; it is an opportunity. By embracing digital transformation and integrating online and offline strategies, retailers can capitalise on the strengths of both channels. The key is to understand the changing needs of consumers and to provide them with the convenience and flexibility they now expect. As retail continues to evolve, those who adapt will find themselves well-positioned for future success.

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