The blurring of the lines between online and in store

09 January 2019

We are in a time of great flux. Recent economic events and the subsequent recoveries have impacted customer behaviours and expectations. This is particularly evident in traditional retail sectors. The ‘death of the high-street’ has long been heralded with predictions that new purchasing platforms and online retail would mean the end of in-person customer purchases in bricks and mortar stores.

However, we now appear to have arrived at another junction where it is not enough to be either an online or in-store retailer. Brands, companies and organisations now need to be both, a hybrid of the two.

The Harvard Business Review conducted a study in which they tracked customer behaviours and habits for nearly a year. During this time, they found that 73% of participants used more than one channel over the course of their shopping journey. Just 7% shopped online exclusively, while only 20% shopped exclusively in an in-store setting.

Rather than thinking of retail as an A or B scenario, we now need to look at both. This is ‘new retail’ as Jack Ma, Executive Chairman of Alibaba describes it. A time and place where customer data, online experiences, offline shopping, fulfilment and logistics are all integrated seamlessly.  

In order to accommodate these developments, brands and retailers are rapidly expanding and evolving their offerings to be relevant in this era. 

The advent of new technologies provides opportunities for retailers to collect huge amounts of rich customer data in store, which will then allow them to provide a more curated service offering to these customers and simultaneously allow the retailer to optimise their stores. Sephora, for example, is using in-store technologies to show customers how a particular make-up product will look if they buy and use it.

Traditional store presences also allow brands to create a sense of theatre, which affords them the chance to position their outlets as a destination. They can live up to the image/lifestyle that the brand projects, and bring the brand to life on their terms.

“A lot of validation goes on in physical spaces that you often miss in online,” says Katarina Dodd, Head of Trends at Contagious.

Online retailers are now also catching on to this development and are rolling out their own physical stores. As a result, we see online retailers creating traditional in-store offerings like Casper, the online American mattress retailer. They opened their first destination-style store in February 2018 and have plans to expand this offering to 200 locations.

Conversely, we also see more traditional retailers expanding their online presence and offering to integrate themselves into the lives of modern people who spend huge amounts of time online and on the go. Companies like Zara are turning parts of their physical stores into order collection points. Nike goes one step further with their ‘Nike by Melrose’ offering where they provide ‘curb-side collection’, which accommodates L.A.’s car culture.

So the answer is probably no longer A/ B, and retailers will need to expand, diversify and stretch their offering to blend the online and in-store experience so that they are culturally relevant in the time of ‘new retail’.