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NRF: E-commerce and Stores Aren’t Mutually Exclusive

Don’t sound the death knell for brick and mortar just yet; only a fifth of U.S. consumers are primarily online shoppers, according to the inaugural issue of Consumer View, the National Retail Federation’s (NRF) new quarterly report designed to measure consumer behavior and shopping trends in a shifting retail landscape. Further, if malls and shopping centers are looking a little worse for the wear, they’re hardly beyond resuscitation: More than three-quarters of the 3,002 consumers the NRF surveyed in July said they shop at physical stores just as much or more than they did last year.

“This report shows that the bricks-and-mortar store is still the cornerstone of American retail and likely will be for many years to come, as consumers seek authentic interaction and experiences with retailers,” said Matthew Shay, president and CEO of NRF. “Despite the changes in our industry, there is an appeal to seeing and touching merchandise in person and being able to engage with fellow human beings that has yet to go away. Even younger shoppers see the value of the store.”

In fact, only 21 percent of those surveyed described themselves as primarily online shoppers, which the report defines as people who make more than half of their purchases online. Even among millennials and the so-called Generation Z, which demographers use to describe those born since 1995, only 34 percent bought more than half of their items online. Young or old, the vast majority of consumers still prefer to make their transactions in person.

Still, young consumers are more willing than their older cohorts to embrace physical retail if it offers greater convenience or a different experience, the report said. Compared with a third of shoppers overall, half of millennials and Gen Z-ers are more likely to visit a store to hang out with friends and family (55 percent), pick up an item they ordered online (50 percent), or talk to a sales associate (44 percent).

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They’re also more likely to mill around without a fixed goal. While 74 percent of total respondents said they visit stores to pick up something specific, 35 percent of millennials and 48 percent of Gen Z-ers said they often drop by stores just to browse, compared with 23 percent of Generation X-ers and 17 percent of Baby Boomers.

In general, people who shop primarily online are younger, wealthier, and more likely to live in a large city. NRF found that 49 percent of primarily online shoppers are aged 18 to 34, 53 percent of them make at least $75,000, and 53 percent live in cities with populations of 50,000 or more. To draw a contrast, 72 percent of primarily in-store shoppers are aged 35 or older, 71 percent make less than $75,000, and 63 percent live in smaller communities.

Among those surveyed, 86 percent shop for groceries mostly or entirely in-store. Those numbers hold steady when it comes to home-improvement items and tools (65 percent), personal-care and beauty products (64 percent), and home decor and furnishing (57 percent). When it comes down to clothing, however, consumers are more split. The report noted that 49 percent of consumers prefer to visit brick-and-mortar locations, 13 percent opt to go online, and 38 percent shop equally in physical and online stores.

While it’s true that technology is beginning to reshape the customer experience, many “store of the future” innovations such as smart dressing rooms and augmented reality “still remain at the periphery of consumer awareness and usage,” NRF said.

The most impactful ones, NRF added, are those that transform, not replace, physical retail. Of the consumers who went the route of buying online, then picking up in-store, 68 percent noted an improved shopping experience. Likewise, 66 percent of those who had tried in-app store navigation and 65 percent who dabbled in mobile payment while shopping said the technologies made a positive impact.

When it comes to in-store digital displays, on the other hand, 44 percent of respondents said they made no difference to their overall shopping experience. The same lack of enthusiasm extended to the use of smartphones or tablets by store associates and messaging apps—43 percent of shoppers were indifferent to them, and 10 percent even said the innovations made their experience worse.