A study reveals consumer disillusionment with online shopping, creating opportunities for retail stores.
The 2024 Retail Technology Status Report reveals great opportunities for retail stores, although it exposes a gap between their priorities and consumer expectations as the sector rebalances alongside online sales.
Today's consumers expect seamless brand experiences
More than half of European consumers (57%) stated that the rising cost of living prevented them from shopping in physical stores, agreeing that the main attraction of online shopping was its competitive pricing. Part of the pricing strategy of online stores is to study the desires, needs, and activities of a customer through automated shopping processes, offering the right product and price at the right moment; so, how can physical stores compete?
40% of surveyed consumers say that not being able to try on clothes before buying negatively affects their online shopping experience, while 45% state that not being able to assess the quality of an item before purchasing is another drawback. These are clear opportunities for the physical store to work in harmony with e-commerce, especially when more than one-fifth of respondents admit they prefer to 'browse' in physical stores.
Why retailers need to shift their priorities
There is a current demand from consumers for their in-store shopping experience to better reflect the online experience. 66% of respondents acknowledged that they lacked the necessary technology to enhance the customer experience in physical stores.
Despite the clear opportunities for retail to increase foot traffic and sales in stores, e-commerce remains an investment priority (33%) compared to in-store technology (32%). Additionally, the fact that non-technology-related improvements in-store are the top priority (50%) among retailers suggests a disconnect between owners' priorities and buyers' needs.
Opportunities ahead
More than one-fifth (22%) of consumers say they visit stores to browse or shop in general. With the right technology, retailers can ensure that these browsers see their latest products, promotions, and discounts.
The appeal of online shopping seems to be waning, as 40% of consumers state that not being able to see or try on clothing before purchasing negatively affects their online shopping experience, and 25% mention the inconveniences of returns. This clearly highlights the opportunities that physical retailers have to capitalize on the weaknesses of the online shopping experience.
A matter of costs
Retailers recognize the importance of customer service and the power of technology to enhance it, but cost is a challenge for some.
20% of retailers stated that the costs associated with implementing technology in stores to improve customer service were one of their main concerns. Additionally, 15% mention the cost of providing an omnichannel experience, and 29% consider rising rental and lease prices to also be a challenge.
