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Study Finds Physical Stores Play a Crucial Role in Apparel Shopping

Despite the spirited discussion about how retailers must prepare for the future by investing heavily in digital technology, physical stores continue to be customers’ preferred shopping channel, according to a new study by consulting firm AT Kearney.

The firm’s Omnichannel Shopping Preferences Study, the results of which were released last week, was based on a survey of 2,500 U.S. consumers that probed shopping preferences and behaviors of all age segments from teens to Seniors.

The report found that brick-and-mortar stores remain the foundation of the industry, evidenced by the fact that 90 percent of all retail sales are transacted in physical stores and 95 percent are done by retailers with a brick-and-mortar presence. Brick-and-mortar stores are also where the most significant consumer and retailer value is created. They are, the study found, the “future of modern retail,” given the importance of convenience and immediate gratification to consumers.

Retailers that started out as e-commerce pure-plays like Athleta, Warby Parker and Boston Proper have moved into the physical space. Others, like home furnishings brand Restoration Hardware and luxury fashion brand Burberry, are expanding their footprint and investing heavily in the in-store experience.

According to the report, “Shoppers actually find physical stores appealing…Stores provide consumers with a sensory experience that allows them to touch and feel products, immerse in brand experiences, and engage with sales associates who provide tips and reaffirm shopper enthusiasm for their new purchases.”

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Stores also influence online purchases, as two thirds of customers purchasing online use a physical store before or even after the transaction. The store makes a significant contribution to converting the sale, even if the transaction is eventually registered online.

Apparel remains one of the most store-centric categories in retail. According to Andres Mendoza-Pena, a principal at the firm and co-author of the study, “Consumers rely on the store more so for apparel than in any other category in the “discovery phase” of the shopping journey,” referring to the stage in which consumers seek out new product ideas, brands, and styles.

“Vertical integration and uniqueness are paramount in apparel,” said Pena, “Consumers and shoppers want to discover and test and try everything that’s both new and not available anywhere else.” In his opinion, this is what gives The Gap, Zara and other vertically integrated brands a competitive edged in the marketplace.

Another takeaway from the study, and one that surprised its authors, is that contrary to the hype that says they are living exclusively online, teens love shopping in stores. Said Pena, “Yes, they’re always online. But they’re also walking through a mall. With friends. Going to physical stores and looking at physical things. And then instagramming their other friends about what they just saw.”

What should apparel and home furnishings brands and retailers should do to better connect with consumers and get them to choose them over the hundreds of equally compelling options out there? According to Pena: “There aren’t hundreds of equally compelling options out there, there is only one, and that’s the one you love. You know it when you see it, and nothing can keep you from getting it (or wishing for it, or hoping for it).” He said that the challenge for brands is to get their offering in front of the consumers. They must understand what their customers want, and offer them differentiated products and a differentiated experience. If they do, they will win.

The bottom line? It’s not a question of digital or physical. Rather, it’s physical with digital. Successful retailers understand how each customer touch point adds value, and will develop omnichannel strategies that maximize that customer satisfaction and, ultimately, profitability.