When the pandemic hit, online shopping surged as stores went into lockdown and people were forced to shop from their couches. Experts predicted a permanent change in how consumers shopped, boldly declaring that online purchases were here to stay as the new normal. Brick and mortar was on its way out – this was the future.
Except, it’s two years later and we can see that the future of retail looks a lot like the past. This is good news.
Online-only retailers and experiences are struggling. Why? Because people are social. They want to have face-to-face experiences. They want to talk to experts in a store before making a purchase. And, as a result, brick and mortar stores are seeing marked growth.
Online Shopping Drops
Many online-only organizations are falling short of their predictions. Shopify has seen its stock sink 14% and is now facing the prospect of having to lay off roughly 10% of its workers. CEO Tobi Lutke admits he misjudged the e-commerce boom the pandemic created, thinking it would last longer. And Shopify isn’t the only one. Both Stitch Fix and Carvana are facing layoffs, among many others.
Let’s be clear here – layoffs are never good. We want businesses to thrive and grow and add jobs. However, for retailers and brands looking to foster their relationships with stores, this is indicative of a trend in the right direction. Consumers are returning to in-store shopping in large numbers.
Brick And Mortar Leaps Back Up
According to Mastercard purchase data, online shopping increased a mere 2.2% in May of this year, but in-store retail increased a whopping 13.4%! Shoppers are more comfortable than ever going to a mall, and 79% indicated they were somewhat comfortable, to very comfortable, going into a local or boutique store (source).
All this tracks with our research. Retailers want face-to-face interactions with brands. Digital experiences are incredibly useful, but they are best when done in addition to real human interaction.
After two years of online shopping, people want that brick and mortar experience, proving that specialty retail is here to stay.