Sixty-eight retailers have filed for bankruptcy since 2015. Analysts say up to 12,000 stores could close in 2019. Alarmists are calling it the "retail apocalypse." However, at the same time, there’s a modern retail renaissance happening. Incumbents like Dollar Tree, T.J.Maxx, lululemon, Madewell, and Ulta are opening more stores. Digital brands like Away and Casper are building more and more brick-and-mortar locations. Restoration Hardware and Apple are creating novel and exciting new approaches to the physical shopping experience. Brick-and-mortar retail isn’t dying, but it is evolving rapidly and leaving bad retail in the dust.
And there’s a lot of bad brick-and-mortar retail out there. In our recent brick-and-mortar study, we found that 70 percent of shoppers have had a negative experience in a store in the last six months, ranging from parking lot issues, disorganized inventory and empty shelves, to dirty bathrooms and messy floors. Smart retailers know there's too much money on the table — $3.5 trillion — to give customers any reason not to come back to stores.
So, what keeps shoppers from returning to stores? We’ve identified four of the reasons that shoppers don’t return to brick-and-mortar stores. Here they are, with some thoughts on how you can avoid ever giving shoppers a reason to stay away.
1. The Store is a Mess
Most consumers still do most of their shopping in stores (86 percent), and the younger generation of shoppers is following the trend (82 percent of millennial and Gen Z respondents). However, 70 percent of those shoppers had negative experiences in stores, finding them disorganized and messy. It’s no surprise that shoppers want a clean, organized in-store experience, and 64 percent say they’ve actually walked out of a store because of its dirtiness.
Shoppers spend more time and money in nice stores, and while they’re in a store, consumers are twice as likely to make big purchases and three times more likely to make an impulse purchase — which is one out of every five purchases in the U.S. Retailers want consumers in their stores, and consumers want stores that are clean and organized.
Women, who control 60 percent of personal wealth in the U.S. and account for 85 percent of all consumer purchases, are much less tolerant of a messy store. For one of the nation’s most powerful shopping cohorts, every store and every experience matters.
2. They’ve Had a Bad Experience in Your Store Already
One bad shopping experience affects the whole brand. Even after just one bad experience, 69 percent of consumers are more likely to shop at a competitor, and almost half say they spend less money in that store. Loyalty also suffers: 41 percent of consumers say they’re less likely to return to any store of the same brand where they’ve had a bad experience, and 69 percent say they’re more likely to shop at a competitor. Consumers have a low tolerance for negative in-store experiences.
There's a strong consumer expectation that stores be consistent across all locations; most consumers think less of a brand that can’t offer that consistency. It’s not enough to be just OK in some places and focus on high-traffic or “flagship” stores. What’s more, reactions to inconsistency are stronger in high-income consumers (>$100k a year). This valuable group is much less forgiving of bad experiences and inconsistency, and more likely to not return and shop at a competitor. Inconsistency hurts the bottom line and brand image. Retailers must pay close attention across all their brick-and-mortar locations.
3. The Store is Unshoppable
Consumers enjoy coming to stores to shop. That means browsing, touching items, trying them on and taking them home that day. However, a surprising amount of retailers are failing to meet what should be the simplest expectation of the in-store experience. We found that two out of five shoppers have recently experienced stores with empty shelves and disorganized inventory. That lack of shoppability makes it less likely for consumers to return. Retailers need to recommit to what makes the shopping experience fun and will always set it apart from the e-commerce alternative.
It’s becoming common to see stores with other amenities or attractions like food, drink, entertainment or events. These can be a welcome addition to a great in-store experience — but remember they aren’t the real draw. Only 19 percent of consumers say they seek out retail stores because of the food or other perks, while about half say they return to stores simply for the ability to try on or touch items and bring them home that day. Even as they add more and more luxuries to stores, brick-and-mortar retailers need to be sure that consumers can enjoy the basic shopping experience without any hitches.
4. You Don’t Have the Tech They Want
The research shows that flashier technology features are at best a secondary draw for consumers. Four out of five shoppers would rather have a clean store than one that prioritizes technology, and two out of three think retailers are too focused on tech and not the basics. Consumer opinion is clear: give me a clean, organized, frictionless shopping experience and then worry about the tech bells and whistles.
The tech amenities that shoppers do want are relatively simple: 37 percent say they want reliable Wi-Fi in store, 35 percent want customer service kiosks/tablets, and 29 percent want mobile app integration. Before retailers attempt to install an augmented reality changing room or an artificial intelligence-powered restocking robot, they must ensure that the foundational tech is humming along. There’s also tech that keeps shoppers away from stores, namely, facial recognition. Forty-three percent of consumers say they’re less likely to shop at a store they know uses facial recognition. While this cutting-edge technology may seem “cool” or useful from a personal data and marketing perspective, brands need to be aware of prevailing consumer opinions. Other studies confirm that shoppers still find facial recognition more creepy than cool.
The retail apocalypse is more like the retail renaissance or the retail evolution. Consumers have made their desires and priorities clear, and it’s up to brick-and-mortar retailers to continue to meet those expectations of cleanliness and shoppability across all their locations. The basics matter, a lot, and before retailers worry about the next shiny tech feature or in-store entertainment, they need to be nailing the in-store basics that consumers have come to expect.
Tom Buiocchi is the executive director, president and CEO of ServiceChannel, the leader in facility management software and contractor sourcing.