Amid a retail resurgence, connected, modern brick-and-mortar stores are a bigger business-driver for modern brands than ever before.
Digitalization has lowered the barrier to entry for starting a brand. As more brands enter the fray and compete for the same customers, they spend more money on digital marketing and advertising. This drives up the cost to acquire customers for all brands in the same category.
The costs for popular marketing channels like Facebook newsfeed ads, Google Search ads, and sponsored Instagram ads can rise indefinitely as long as retailers are willing to pay for it. Combine this with rising shipping costs and fewer wholesale retail channels, and having a brick-and-mortar retail outlet of your own that can sync with your ecommerce operation is more crucial than ever.
To that end, we’ve compiled stats that tell the story of the reimagined retail stores’ return to the fore. Find the full infographic below, as well as our in-depth analysis.
See the full infographic here.
There are over 445,600 brick-and-mortar stores in the U.S. It’s a massive amount, and shows the potential and size of the retail store ecosystem in the United States.
86.4% of 2021 retail purchases were made in physical retail stores. Even in the year with the highest amount of ecommerce sales on record, brick-and-mortar sales outstrip ecommerce sales by a factor of 6. Physical retail is the way the majority of shoppers make purchases, and will remain that way for the foreseeable future.
Shoppers don’t just patronize physical stores out of convenience—they have a marked preference for the experience. Ecommerce and physical retail stores can complement one another, uniting the customer journey and improving results across both channels.
56% of shoppers visit a store before buying online, meaning that even if your shoppers buy on ecommerce, there’s more than a 50% chance that those shoppers are checking out your products in-store beforehand.
Similarly, 55% of online shoppers prefer to buy from retailers with a brick-and-mortar presence. This makes sense, as these shoppers likely want the comfort of being able to try on and return products at nearby locations, or at the very least want the guarantee of legitimacy a brick-and-mortar store provides.
That’s why trying items on in-store is 3X more influential than any other purchase factor: shoppers want the guarantee that something fits and looks great, and they don’t want the hassle of dealing with returns and exchanges when they can try on a sure thing.
Now is the time to turn your attention to physical retail. Among brands that already have a store location, 80% are investing in omnichannel retail right now. Brands need to focus on delivering that next-level immersive, seamless experience to remain competitive.
For ecommerce brands that haven’t opened a store yet, 30% are prioritizing opening one. Think of all the different ecommerce brands you see scrolling through your newsfeed on a daily basis. Now imagine close to ⅓ have a retail store opening near you. That’s the competition that all retailers with a brick-and-mortar presence will be facing over the next few years.
The reason for this omnichannel investment is clear: it works. Retailers with omnichannel strategies see 10% Y-O-Y growth, 10% increase in AOV, and 25% increase in close rates on average—the kind of KPIs any brand would be happy with.
The reason retailers see returns on an omnichannel strategy is because shoppers who regularly buy across channels have a higher lifetime value and lower acquisition cost than those who do not.
Brands see a 27% increase in ecommerce traffic on average after opening a store. This is from the natural billboard effect that comes with opening a retail store in a prime location—it’s free advertising and awareness for everyone who walks by or shares their experience via word of mouth. Even if they don’t stop inside, shoppers will be more primed to search for your store online or click on an ad after seeing it in person.
Omnichannel options also increase the opportunities for shoppers to make a purchase. For example, 20% of shoppers who return an online purchase in-store make an additional purchase. By simply having the option to return in store, brands can offset the high costs of returns and drive value.
Connected inventory systems mean you can drive online shoppers in-store, where they’ll try on and buy more. 71% of shoppers said they would purchase a product in-store if they were told the item they were looking at was in-stock near them while shopping online. Simply knowing that they can try on and experience in-person and be guaranteed that their style and size is in stock can funnel shoppers to your retail location, where you can build an even deeper relationship.
Many of these findings ring true with Leap’s own experience.
Launching and scaling seamlessly connected brick-and-mortar stores is expensive and risky. There are the costs of signing a lease, hiring a team, and designing and outfitting a store, just to name a few.
Most brands don’t have the experience or competencies to efficiently open their first omnichannel brick-and-mortar store. Instead, they end up repeating the same costly mistakes other brands have made before them. Even worse, opening a store becomes a distraction from the core fundamentals of their business, diminishing rather than amplifying their overall performance.
That’s why brands see such a benefit from integrating with Leap—we take away that risk by incorporating them into our data-driven platform for deploying retail stores.
Brands that work with us see a higher-than-average 50%+ lift in local ecommerce traffic when they deploy a store on our platform. That’s because we take a combined approach to drive traffic in-store and online across our platform to acquire the most valuable customers in-market.
Every Leap retailer on the platform gets a beautiful, omnichannel store designed with 100% of their brand DNA in locations where they’re statistically likely to succeed. Due to our network of shared efficiencies, we can open that retail store for 25% less than a brand doing it on its own. Because Leap takes out the inherent risk of opening an omnichannel-enabled retail store, brands face less cost and drive higher revenue as a result.
Want to learn more? Sign up and start your retail journey with Leap today.
The Digital Shelf Institute
CNBC, Dec 2021
Streetfight, Dec 2021
Footwear News, Aug 2020
Glossy, Sept 2020
The Palm Beach Post, Jan 2021
CNBC, Feb 2021
Footwear News, Mar 2021
Chicago Business Journal, Apr 2021
CoStar News, May 2021