The shop is dead – long live the shop!

4 June 2021.

Dr. Kleinlercher, to begin with: do you think that physical trade is dying out?

This makes me smile. This is the question that so many retailers ask us as well. We usually say, no, it isn’t. But the stationary retail trade will have to transform itself a bit.

Were you still surprised when the shops were overrun after they had opened again?

I did expect a rush. I’m pleased that my feeling didn’t deceive me.

What do you think was the reason for this rush?

I’ve talked about shopping to many people during the corona time. The closed shops were always an issue, professionally and privately. People could hardly wait until they were able to shop physically again. They missed this normality. Simply being able to look around and see what’s there. In this way, many people also let themselves be inspired when they’re shopping.

Are there any other reasons why people missed shopping in physical shops?

I think that the classic shop has advantages which the online world is not currently able to provide. Think of the advice given by the personnel, or experiencing products with all five senses. Online, the social aspects are often also missing. Many people like to go shopping with friends or family.

How did you experience this time personally?

At the beginning, I didn’t find it so bad. Habitual purchases are something I prefer to make online anyway. But after a few weeks, I got fed up with it all as well. I was all the more pleased when I could go into the shops again. I find buying presents online particularly tiresome because in a shop I can actually see what there is. This stimulates my creativity.

In the course of our discussion, we’ve already touched on online and offline channels. But now there are also traders who use both channels. What are their characteristics?

Right. There are traders who operate physical and digital communication and distribution channels at the same time. That is, they sell through branch stores and through their own online shop. Some of them combine the channels for their own and their customers’ benefit. They are called omnichannel traders.

How can customers envisage such an interlinkage?

Companies can provide services through all their channels, for instance. In such cases, loyalty programmes are applicable both online and offline. Or they provide customers with the option to redeem their accumulated discounts in a branch store and in the online shop. If the interlinkage works well, I don’t notice any difference between the channels as a consumer. Whether I shop online or offline should be neither here nor there.

What advantages does this provide customers with?

In the online shop, I can shop 24/7, for example, and retrieve much more information in the internet than in the physical world. The few clicks needed to finalise a purchase make it convenient at the same time. In the classic shop, though, I can take the product home with me straightaway. This means there is no delivery period. Also, I can make use of expert advice on site. Experiencing things with all five senses is also possible. If the interlinkage works well, I can profit from both advantages as a consumer. Depending on the situation, I do my shopping online or offline, depending on what I happen to prefer at the time.

What customer type does this appeal to?

Webroomers would be an example. Webroomers are also called online-to-offline shoppers. These customers research purchases in advance online and finally make their purchases in the physical shop. So they switch from the online channel to the offline channel. In doing so, they profit from the wealth of information at the prepurchase stage and then from the advantages I’ve mentioned before on site.

Do webroomers help stationary shops?

That depends on various factors, which means that a generally valid statement is hardly possible in this case. The spread of webrooming differs from industry to industry. In foodstuffs, for instance, webrooming is not particularly widespread at present. Webrooming can be useful in stationary shops. If retailers succeed in enticing customers from the online worlds into their physical shops, they can sometimes profit from spontaneous purchases, increased customer inspiration and/or greater customer loyalty in the shop. If they also succeed in enticing customers from competitors’ websites into their own physical shops, this is naturally particularly profitable, for they can acquire new customers in this way. It must be borne in mind, though, that cross-channel shoppers are well informed about products and prices. Possibly, some of them end up in a competitor’s physical shop after they’ve visited my online shop.

What can help the physical retail trade besides webrooming?

On the one hand, flagship stores. With this type of shop, retailers try to boost the shopping experience. On the other hand, everything to do with the use of smartphones in physical shops is currently very popular.

Are flagship stores already widespread in the retail trade?

At the moment, we can see that some traders (have to) reduce the number of branch stores. Many branch stores are closed while shops in prime sites are converted into flagship stores or opened as flagship stores in new prime sites. Traders often invest a great deal of money in these flagship stores in order to reinforce brand recognition, the shopping experience and the brand image. Flagship stores are meant to attract as many customers as possible and help the brand and its products to actually be experienced. However, purchases are often not made directly on site but in other channels, for instance through the smartphone in the shop. The upshot is that flagship stores are often unprofitable if you only look at the direct turnover per square metre.

What is your personal assessment of physical trade in the future?

With regard to foodstuffs, physical shopping behaviour remains prominent – particularly in the German-speaking area. This is unlikely to change substantially in the near future. Non-food retailers, however, are more strongly affected by digitalisation. They have to concentrate more on the strength of stationary shopping in order to remain competitive. Outstanding advice, experiences involving all five senses and cross-channel services are only a few examples of theses strengths. As long as there are advantages from the customers’ point of view and the costs are not excessive, customers will continue to use physical shops.

Dr. Kristina Kleinlercher is a post-doc at the University of St.Gallen. Her research focuses on cross-channel customer behaviour patterns, from which she derives recommendations for action on behalf of retailers. In addition, she examines the use of new technologies and the configuration of customer experience in the retail trade.

Manuel Frommelt is attending the Master’s programme in Marketing Management. This article was produced in connection with a workshop of the supplementary programme in Business Journalism headed by Stefanie Knoll, SRF, and is part of the series on “Money or Happiness”.

Image: Adobe Stock / Seventyfour