In addition to the apparent rise of online retail, a surprising thing is happening. Brick-and-mortar stores are opening, and offline retail is witnessing a revival.
The journey of online retail has been no less than a roller-coaster ride. A few years back, when e-commerce became the new normal, everyone from experts to common shoppers predicted that brick-and-mortar stores would soon be dead. But are they?
Brick-and-mortar sales account for more than 94% of retail sales. Though the footfall of retail stores has been declining, 56% of consumers still prefer shopping in-store to feel and try the products.
So, what’s the deal with offline stores? Are they here to stay? And how’re they impacting e-commerce online shopping? Let’s find out.
The Brick-and-mortar Trend
Despite the COVID-19 outbreak that forced shut all non-essential offline stores, brick-and-mortar businesses are reopening. The revival of offline retail seems to be primarily driven by the shift in shopping preferences of millennials and Gen Z groups.
While these segments of shoppers initially appeared to be digital savvy, they’ve emerged as a multichannel bunch. A study found that around 60% of millennials and 47% of Gen Z will visit a brick-and-mortar store for shopping. Shoppers prefer to go to a store and try and feel a product before making a purchase.
In fact, many shoppers are checking out and finalizing products online, followed by visiting an offline store to try them and make the final purchase.
However, the revival of brick-and-mortar stores doesn’t necessarily mean online sales are plunging. As discussed, footfall in offline stores is declining, and retailers that have failed to transform themselves digitally are struggling to stay afloat.
In all, it’s a multichannel ecosystem now where offline and online retail stores retail co-exist. To be successful, retailers need to focus on both online presence and brick-and-mortar retail selling.
That said, there are some sectors that have witnessed highs and lows in online sales due to the reopening of brick-and-mortar stores. Let’s take a look at them.
Food and Drink
During the initial days of the pandemic, people turned to buy foods and drinks online, regardless of the fact that most supermarkets were open. This resulted in a substantial surge in online sales of food and drink brands.
But as the restrictions eased and the panic for the virus curbed, people started stepping out. Later, restaurants and shops also reopened, which further decreased online sales of food and drink products. It’s evident that people considered shopping from online retail stores for these products as an interim solution until they can step out into shops and supermarkets again.
Home and Garden
Home and garden brands witnessed an interesting growth in sales as people don’t usually shop for garden items online. But this pandemic has encouraged people to buy things they’d otherwise buy in-store, or wouldn’t buy at all. Home and garden brands reported a 120% surge in YoY during the initial phase of the pandemic.
But the online orders soon declined as physical garden centers reopened. As the weather became sunny and pleasant, people ditched online shopping and started visiting garden centers again.
Gifts and Occasion
Online sales of gifts surged by a massive 159% during the initial days of the lockdown. And this rise is quite self-explanatory. The pandemic has ruined celebrations across the world; let it be Easter, Mother’s Day, or regional festivals in countries like China and India.
People are increasingly buying gifts online rather than going in-store. This trend can also be explained by the fact that people are sending gifts to their friends and relatives via online channels without being physically together.
The reopening of shops has surely affected the online sales of gifts and occasion products, but the change is subtle. The sector looks strong and is expected to continue its uptrend despite the decline. The gifts industry has also managed to achieve a strong repeat rate of 36%, the highest among all affected sectors after the reopening of shops and markets.
Health and Beauty
Health and beauty was one of the sectors that experienced massive growth amid the lockdown period. People were dramatically purchasing self-care and beauty products shop online, which boosted customer acquisition for health and beauty brands by more than 75%.
But the online sales of these products plunged as the stores reopened. However, the reopening of stores is less likely to impact online health and beauty brands. The in-store experience is no longer the way it was during the pre-COVID time. You can’t check out products by applying them as you could do before. Yet, people may be aligned to visiting offline stores for a few months down the line.
Online fashion brands also showed substantial growth during the early pandemic. Even before the COVID-19 outbreak, the online sales of fashion brands were touching all-time highs. But with the onset of the lockdown, online fashion sales surged by 87%.
Fashion brands are now experiencing a decline in online sales as the lockdown restrictions are easing. However, the reopening of shops isn’t the only reason for this decline. People seem to have spent so much time in their homes that they just want to step out in the open.
The initial days of the pandemic caused panic among the population. People were devastated by the new disease and were frightened to step out of their houses. Now, although the cases are increasing, people’s attitude towards the disease has changed. A large number of people have started to step out of their homes, trying to get back to their normal lifestyle.
This change in attitude has also resulted in a change in consumer behavior. During the initial days of the pandemic, online shopping sales were skyrocketing. People were buying everything online, ranging from self-care products to food and grocery.
But as the lockdown restrictions ease, people want to step out in the open and enjoy the freedom they’ve been craving for months. This has also led to the revival of brick-and-mortar stores, which, in turn, has induced a decline in online sales.