Brick-and-Mortar and Instant Gratification in a Digital World

Consumer insights research is an extremely fascinating line of work for those with an innate curiosity about what makes people and the world around us tick. Through the research we conduct we get to continually learn about a broad diversity of industries, brands, and consumers as we dive into uncovering insights and finding solutions to the specific challenges facing our clients. We also, however, get an interesting read on the broader cultural, social, and business macro-trends that cause the anxieties that lead to the requests for research that cross our desks.

Over the last year there has been increasing interest among clients wanting to conduct consumer journey research as they seek to make sense of, and strategize against, the multitude of digital touchpoints that consumers face across the multiscreen world that has officially “arrived,” according to Google CEO Larry Page. As e-commerce and retail sales through mobile devices increases exponentially, everyone wants to be sure they are on that train as to avoid becoming the proverbial BlackBerry of the mobile communications game.

However, considering the possibility that we may be missing the forest for the trees, it would do us well to take a step back from our myopic focus on all things digital, mobile, and multiscreen to take the broader view about where people are actually spending their money. As it turns out, e-commerce accounts for only about 6% of retail sales in the U.S.

This is not to say that 6% of retail sales is insignificant. U.S. online retail sales are predicted to be $262 billion this year, have grown at an average yearly rate of nearly 18%, and are expected to grow at 10% a year through 2017. It is also worth noting that retailers like Nordstrom who have invested heavily in e-commerce and mobile strategy are seeing a return on their investment and certain industries (e.g., books and music) have been drastically changed as a result of e-commerce. Finally, we only need to remember that at one point in the not too distant past only 6% of people in the U.S. used the internet and that forward thinking business opportunities, like the internet stock bubble and NBA draft picks, are based on expectations for future potential.

But what shouldn’t be forgotten in all of this excitement about the seemingly endless opportunity around online and mobile engagement and shopping is the value of brick-and-mortar stores for consumers and retail brands. Even Amazon, the soon to be #2 global retailer behind Walmart whose existence is solely based on online sales, is interested in opening retail stores.

A recent study conducted by A.T. Kearney titled “Recasting the Retail Store in Today’s Omnichannel World,” concluded that “while retailers need to continue to provide customers the ability to shop where and when they want, it is equally important to make the store the place people want to shop.” Brick-and-mortar stores provide, perhaps most importantly, an opportunity for consumers to experience instant gratification, a basic trait of human nature. Retail stores also provide a location for consumers to enjoy the social aspect of shopping with friends or family as well as an opportunity for retailers to build relationships and loyalty with their customers through personalized face-to-face service.

Shopping at brick-and-mortar stores is also much more likely to lead to impulse purchases, with 40% of respondents saying they spend more than they planned to in stores compared to 25% who spend more than anticipated online. While the internet is ideal for researching and discovering products and brands from the comfort of the couch, it seems the unanticipated discovery that is experienced in-store is more likely to lead to an actual purchase, perhaps because in-person spontaneous purchases fulfill our desire and instinct for instant gratification.

Considering the positive aspects of shopping at brick-and-mortar for both consumers and retailers, the challenge becomes figuring out how to integrate desktop and mobile digital touchpoints and e-commerce with the brick-and-mortar retail experience to create an interconnected brand ecosystem. A practical and easy way of creating a multichannel retail experience that has the potential of improving sales and consumer/brand relationships is offering and encouraging consumers to pick-up or return products purchased online in the retail store which, as it turns out, they actually prefer. For all the focus on the importance of free shipping, offering an incentive for additional purchases when coming into the store to either pick-up or return something purchased online could be a purchase motivator on par with free shipping.  Getting these consumers in-store gets them closer to experiencing that feeling of instant gratification while also offering the retail brand an opportunity to create personalized social interactions with the consumer.

While digital and mobile strategy is clearly the hot topic driving much of the creative innovation and research these days, integrating these efforts with opportunities for in-store retail engagement cannot be ignored and should be considered as an integral part of strategic initiatives. That is, until the day that we can purchase something on our mobile device and have it instantly teleported to wherever we are. Teleportation will undoubtedly be a retail disruptor the likes of which we have not yet seen, and at that point all bets are off!

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