Chicago—After all the hype about online selling, it actually is physical stores that continue to be customers’ preferred shopping channel and a place where the most significant consumer and retailer value is created.
That’s the revelation from The A.T. Kearney Omnichannel Shopping Preferences Study based upon a survey of 2,500 U.S. shoppers who were asked respondents about their shopping preferences and behaviors. The survey covered all age segments—teens, Millennials, Generation X, Baby Boomers, and seniors.
Leveraging the Appeal of In-Store
The study found that stores play a crucial role in online purchases, as two thirds of customers purchasing online use a physical store before or after the transaction. The store makes a significant contribution to converting the sale, even though the transaction is eventually registered online.
“The source of value creation (brand building, product awareness) is often distinct–or decoupled–from the place of value capture (sales transaction),” noted Mike Moriarty, A.T. Kearney partner and co-author of the report noted. “The decoupling of value capture is important for retailers to understand as they consider resource allocation decisions across channels to ensure that the true value the physical store creates is accounted for properly.”
Moriarty said in-store shopping has actually always been as strong as the survey shows.
“The surprising part of the survey results is how much consumers rely on physical stores for discovery and test and trial, purchase and service after sale. The media hype would make you think otherwise. Online information-sharing and online shopping continues to be a challenge to physical retail…but it’s not like retailers haven’t had challenges and responded with innovative solutions over the past hundred years.”
The survey asked respondents to rank the channels they used in each stage of the Shopping Journey–Discovery, Trial and Test, Purchase, Delivery or Pickup, and Returns. The study results provide retailers with insight into how channel preference differs by category and demographic cohort as well as understand why developing an integrated omnichannel experience is pivotal to retail success.
The analysis of the survey results shows that most shopping experiences are journeys that span multiple channels. Consumer channel preference varies by stage in the shopping journey, although the most common preferred shopping journey is exclusively store-based for each stage. Some 55% of consumers in the survey prefer to use both stores and online throughout the entire journey.
Across all demographics, shoppers prefer stores. “It differs by category, of course: books, music and movies indexes high online; jewelry and fine accessories index low,” Moriarty said. “What is also surprising that even when customers buy online, more than two-thirds of them will visit a physical store before or after the purchase–this has big implications for retailers to think about how the physical store creates value.”
Millennials’ In-Store Experience
Interestingly, younger consumers are actually the most likely to shop in-store. “This is another result from the Survey that we thought was counter-intuitive, because the popular media would make you think that teens all shop online, but actually teens spike higher on in-store retail (as do seniors) Millennials, Gen X, and Boomers index lower,” Moriarty added.
Michael Brown, A.T. Kearney partner and study co-author commented, “A strategy based on leveraging the appeal of the physical store supported by digital is the best formula for capturing the maximum number of sales, building sustainable customer loyalty, and creating opportunities to cross-sell,” said Michael Brown, A.T. Kearney partner and another study co-author.
To read the Omnichannel Shopping Preferences Study Report “On Solid Ground: Brick-and-Mortar is the Foundation of Omnichannel Retailing” please go to www.atkearney.com.
About the Study
A.T. Kearney’s Omnichannel Shopping Preferences Study asked more than 2,500 U.S. shoppers in an online survey about their shopping preferences and behaviors. As part of the research protocol each respondent was allowed to provide input for multiple categories. Categories included in the study are apparel and accessories, health and beauty care, furniture, jewelry, computers and electronics, and sporting goods. This independent survey of consumers and dozens of retail executives was funded by, and completed in cooperation with the top shopping mall real estate developers in the United States.