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Technology is Keeping Physical Stores Off of Life Support

The retail storefront isn’t dead, even as large shopping centers and chain stores shut down locations nationwide. Most retail purchases, a figure around 90 percent, are still made in stores. For retailers, that means turning attention and resources toward the in-store shopping experience, even as chatbots and other tech tools redefine e-commerce channels.

BRP Consulting’s latest special report, The Future Store, illustrates how next-generation tools like video chat and AI will factor into shoppers’ purchasing processes. The report draws from two different studies, a 2019 consumer study as well as a POS/customer engagement survey targeting retailers, to envision what’s to come for retail and illuminate how brands approach supply chain management, including staffing and inventory decisions that can facilitate a seamless omnichannel experience.

The findings show consumers are willing to rely on technology in place of human interaction—but only if it makes the purchase process quicker and easier. Fifty-five percent are more likely to shop at a store with self-checkout instead of a store without, and 57 percent will choose a store offering automated returns if it allows them to avoid human interactions and speed up the process.

However, consumers also reported a primary reason for visiting physical retail locations is to find out more about products from knowledgeable in-store associates before making purchasing decisions. Just under half (48 percent) of retailers surveyed reported plans to increase permanent brick-and-mortar store locations in the future, and 69 percent of retailers polled are also planning other physical stores, like pop-ups, activations, collectives, and marketplaces. Consumers see the value in a physical store: not just to see and feel a product in person, but also to interact with brand representatives who can guide their purchase decisions.

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Technology meant to facilitate that customer engagement is also gaining traction in retail, according to the report. Twenty-one percent of retailers surveyed offer a video conference service that allows consumers to communicate directly with store associates from home. On a typical conference call, customers may request to see different products or ask questions about size and color options to determine if they’ll make a purchase. A quarter of respondents reported plans to add a video conferencing service to their e-commerce within three years.

Retailers will likely increase use of virtual tech to harness their inventory in the near future. According to the report, 36 percent of retailers have implemented virtual inventory tools that allow brick-and-mortar locations to sell products without actually carrying inventory within the stores. Another 27 percent plan to implement this within three years, decreasing stores’ physical and environmental footprint by warehousing large levels of inventory off-site and delivering products to consumers directly or offering a ship-to-store option.