From where things stand in Q4 2020 it’s not hard to imagine physical retail going extinct. And as compelling as the current eCommerce expansion is, counting out stores is a big miscalculation.
Noting the ways COVID has permanently changed retailing, CNBC recently reported, “As more and more stores go dark at the mall, some major retail executives are looking to grow outside of it — a tactic they hadn’t touted so publicly before. Macy’s, for example, said in early September it’s planning to open a smaller-format Bloomingdale’s department store away from the mall. It’s also looking to test smaller-format Macy’s stores off-mall.”
Macy’s CEO Jeff Gennette told CNBC, “We continue to believe that the best malls in the country will thrive,” and added, “we also know that Macy’s and Bloomingdale’s have high potential [off]-mall and in smaller formats.”
Physical stores seeking to reactivate that potential are finding solutions in the digital domain.
As is revealed in PYMNTS’ new report How We Shop: Winning The Digital-First Shopper, done in collaboration with and supported by PayPal, “The digital shift is stronger than ever, but consumers are not unwilling to shop in stores. Consumers are more willing to shop in stores than they were in June, in fact, on one condition: Retailers must allow them to pay using the digital to order online for curbside pickup.”
People Want To Go To Stores, But …
Finding that “Five percent more consumers say they would be willing to shop in stores if they could pay for their purchases digitally than just a few months ago,” the new How We Shop report puts it succinctly, stating that “The biggest thing merchants can do to entice consumers to shop in their stores is allow them to pay online.”
PYMNTS CEO Karen Webster foretold this state of affairs last summer, writing in July, “Physical retail can make the quantum leap, but it will be at the hands of digital players who will force its reinvention — or otherwise contribute to its demise.”
Webster pointed to Main Street SMBs as “a segment of physical retail that may even have the best of all digital/physical retail options,” and noting that “Direct-to-consumer brands may find them to be an attractive outlet to capitalize on the hyperlocal shopping experiences with which consumers in those communities feel most comfortable. Digital platforms help them create digital storefronts and integrate with digital intermediaries to solve their logistic challenges or utilize digital platforms to solve them on their own.”
It’s borne out by findings in the latest How We Shop report, which states, “Consumers are more willing to shop in stores now than they were in June — a trend across all age groups and geographic areas. Interest in shopping in stores is particularly high among Generation X consumers. Ten percent more Gen X consumers would shop in stores now than in June, and 5 percent more millennials would do the same than in June.”
Driving Digital-First Foot Traffic
Like many things post-pandemic, the line of demarcation is payments choice and catering to infection fears with adaptations like curbside pickup and buy online, pickup in store (BOPIS).
“Our research shows that consumers exhibit a greater interest in shopping in physical store locations if they are offered their preferred shopping and payment methods,” per the Report. “We also find that 50 percent of millennials and 46 percent of bridge millennials would be willing to continue shopping in stores that enable them to buy online and pick up in-store.”
That’s especially true for millennials and bridge millennials, “the most likely group to want to pay in-store using digital wallets and QR codes. Retailers can similarly attract more Gen Z customers by accepting contactless card payments, offering curbside pickup options and allowing consumers to pay using cards saved on file.”
While How We Shop concludes that “[fewer] consumers than ever plan to go back to shopping the way they did before the COVID-19 pandemic began,” the report likewise observes that “Retailers’ ability to recognize and provide the digital offerings that best meet their customers’ specific needs will be key to navigating this new digital-first landscape.”
Selected by Fintech Tube