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Bricks and mortar retailing far from dead – but now it’s just part of the mix

Consumers still have an attachment to the physical shopping experience while new online shopping habits will persist

Grafton Street in Dublin: “There has been a pent-up demand to get back into stores, and in some recent research we did with our customers, over 60 per cent told us that they prefer in-person to shopping online,” says Three marketing director Aislinn O’Connor.

Grafton Street in Dublin: “There has been a pent-up demand to get back into stores, and in some recent research we did with our customers, over 60 per cent told us that they prefer in-person to shopping online,” says Three marketing director Aislinn O’Connor.

 

Old habits die hard.

Online shopping may have grown significantly during the lockdowns but lots of people returned to the stores at the soonest opportunity. Reports of the demise of traditional bricks and mortar retailing appear to be premature, for the time being at least.

“I don’t think bricks and mortar is dead, far from it,” says KPMG partner Niall Savage.

“People like the experience of shopping and all the things that go with it. They have set up accounts and will continue to shop online and there will be less bricks and mortar but there is still a place for it in society as a whole.

“We have seen that when people were given the opportunity to go back out on the streets. Our clients reported strong trade and footfall when they reopened despite other facilities like restaurants, which contribute to the shopping experience, remaining closed.”

Research carried out by Three Ireland confirms those reports.

“There has been a pent-up demand to get back into stores, and in some recent research we did with our customers, over 60 per cent told us that they prefer in-person to shopping online,” says Three marketing director Aislinn O’Connor.

But new habits will persist, according to Scott Frisby, head of strategy for Elavon Europe.

“Behaviours that we adopted in the pandemic, such as using click and collect and greater use of ecommerce, will remain with us for the foreseeable future, because there’s no getting away from the fact that online shopping is convenient,” he says.

“Consumers, who in the past might have had security concerns about online shopping or found it confusing, have now had positive experiences for the most part and new habits have formed.”

He agrees with Savage that consumers still have an attachment to the physical shopping experience but that is changing too.

“There is definitely a desire to return to the social and recreational aspects of high-street shopping, but I think that online, in-app and remote shopping are permanent features of the retail landscape, and everyone involved in retail should be embracing that.

“Whilst many consumers will want to revert to the old ways of shopping and paying, they will also demand that new payment methods are made available to them. The good news, for consumers at least, is that we will all have more choice and convenience around shopping, but the challenge for retailers is that that means having to manage several methods and processes for ordering, delivery and payment.”

And retailers are responding to the challenge.

“Covid pushed a huge amount of people online,” says Conor McManus, director of technology consulting with BDO Eaton Square.

“They had no other choice. We work with a lot of clients in the retail sector and many of them have pivoted to online retailing. A lot of them were already set up for online selling but had not taken it very seriously as Irish people like to go into stores.”

e-commerce sites

He points to some impressive statistics to illustrate the retail response.

“Over 5,500 new e-commerce sites were set up in Ireland during 2020. The figure for the UK was 85,000. They had no other way of selling and they now have two sales channels. It was thought people would default back to bricks and mortar. We’ve seen some of that, but a lot have remained online as well.”

This will lead to a fundamental change in the nature of the bricks and mortar retail experience, he believes.

“For example, Currys in the UK are rethinking the purpose of the store in a world post-Covid now that customers can get advice from experts virtually. Their stores have to be experiential, and they are creating 20 gaming centres where customers can go in and play at their stores. In Paris, LVMH has spent close to $1bn to refurbish the Samaritaine department store as a new all-in-one shopping, dining and tourist destination.

“Is retail dead? Not at all. Has it changed? Yes. But change was coming anyway.”

O’Connor believes the attraction of the in-person experience will endure.

“I don’t believe it’s either online or in-person, it will always be a mix,” she contends.

“Online provides an ease of service for consumers who know what they want, when they want it. And, to support that, online journeys need to be as frictionless as possible, helping you get what you need quickly and smoothly. For us at Three, we really believe in bricks and mortar retail, but we also recognise that our customers still want to be able to pick up their favourite products online.”

As Fergal Quinn used to say, customers will stay for the service.

“The future strength of bricks and mortar retail lies in its in-person expertise and guidance, as well as product curation and consumer discovery,” O’Connor points out.

“A lot of the time the customer is looking for help to find what best suits their needs and want to be able to touch and feel products before purchasing. Also, as a nation, we enjoy nothing more than a browse in an interesting store where we can discover something unexpected or new.”

According to Mazars partner Emer O'Riordan, retailers are asking what it will take to get consumers back into their stores.

“They are trying to reimagine the experience,” she says. “People come into stores for the advice and expertise of the staff. Retailers are investing in staff training and it’s coming back to the situation where you go to a retailer like a hardware shop for tips and advice as well as to buy.”

Frisby believes the mixed experience is here to stay.

“Before the pandemic, retailers could survive as an online-only or a face-to-face only brand; that will no longer be possible, and why the concept of omni-commerce has moved from the passenger seat to take over at the wheel,” he explains.

“Omnichannel truly is the new normal: for browsing, purchasing and post-sales servicing,” Frisby continues.

“What is less clear is how this will look in different sectors of the retail landscape – fashion brands will have a different post-pandemic experience than DIY shops.

“Retailers of all stripes will have to pay close attention to how consumers are expressing their preferences. Many consumers will be determining their own personal mix of face-to-face shopping versus ecommerce and the retailers that win will be those who support consumers across all channels.”