State of the In-Store Experience [2021]

“As consumers have grown accustomed to online experiences, they’ve come to expect a similarly digital in-store experience."

"Physical brick-and-mortar locations—retail stores, gyms, restaurants, or otherwise—must now be digital, automated, and personalized to the customer.

In many instances, digitization is synonymous with convenience. The consumer’s craving for convenience existed long before COVID, and will persist into the foreseeable future. There’s no denying, though, that the pandemic accelerated the timeline for retailers to embrace digitization.

Digitization of the in-store experience is one of several emergent trends we at Raydiant have keenly observed as a primary player in the brick-and-mortar space. As entrenched as we are in the world of brick and mortar, it’s the customer who will determine how the future of brick and mortar unfolds.

Executives in the brick-and-mortar space have no use for assumptions. Keeping your organization at the front of the pack requires verifiable knowledge of consumer tastes and behaviors. 

This need for hyper-recent intel specific to the brick-and-mortar space continues to fuel Raydiant’s “State of” series. With each installment, we deliver executives the insights they need to remain in lockstep with dynamic consumer desires. 

With our State of the In-Store Experience 2021 report, we uncovered several actionable insights. From newfound customer service demands to the triggers for repeat business, the report decodes today’s consumer in a way that executives will find valuable

We hope you find it useful as you prepare your organization to survive and thrive in the future of brick and mortar retail!"

- Bobby Marhamat, CEO of Raydiant

Key Findings 

47% of respondents estimated that they’ve spent more than 51% of their shopping budget in physical locations so far in 2021. Compared with shoppers’ wariness of in-store experiences at the height of the pandemic, this rate of in-store shopping is encouraging for brick-and-mortar practitioners. 

48% of respondents prefer to shop in-person at a physical store when given the choice. Nearly half of the population prefers the in-store experience over the digital one—an indication of brick and mortar’s resilience and lasting appeal.

42% of respondents say in-store customer service has improved over the past 6 months. Chalk it up to employees’ shaking off the cobwebs and returning to the top of their game. Important to note, though, is that a similar percentage of consumers said customer service has declined. 

82% of respondents say a positive in-location experience makes them more likely to return to a physical establishment. This begs the question: What makes a positive in-location experience? 

Consumers are ready to have fun again. A “fun” in-store (or in-restaurant/gym/business) experience is the leading reason why consumers choose in-person experiences over purely digital ones.

Methodology 

On July 22, 2021, we surveyed 1,000 American consumers. The survey was conducted online via PollFish using organic sampling through Random Device Engagement (RDE). To access the raw data, click here. Learn more about the Pollfish methodology here.

Part 1: Shopping Habits and Preferences 

To get a sense of customer shopping habits and preferences, especially after a year of being forced inside due to the pandemic, we wanted first to find out how consumers are shopping. Here’s what we discovered:

47% of respondents estimated that they’ve spent more than 51% of their shopping budget in physical locations so far in 2021. 

Consumers spending more than half of their shopping budget in physical stores suggests that:

• Consumers are shopping in-store more often than they were in 2020, due to both widespread re-openings and changing attitudes towards the safety of in-store shopping

• Consumers still prefer to buy big-ticket items (furniture, appliances, electronics) in a setting where they can interact with the items before purchase

• The unique appeal of in-store shopping remains strong

Another 25% of consumers do at least one-quarter of their shopping in-store. Fewer than 10% of respondents spent more than 90% of their budget online. Most consumers shop in-store between one-quarter and three-quarters of the time. 

Of course, you have to account for at-risk populations and those still wary of infection, those who avoid crowds at all costs, and other atypical shoppers. The closure of specific stores and inconsistent hours may also continue to limit brick-and-mortar’s share of business.

The typical shopper, though, finds reason to go to the store for at least half of their purchases, if not more.

48% of respondents would prefer to shop in person at a physical store if they had a choice. 

The preference of online versus in-person shopping is split nearly in half. So what should retailers take from this statistic? 

Retailers must understand the reasons why about half of shoppers prefer digital shopping—namely digitally-driven convenience. Then, to the extent that they can, retailers should infuse the best features of digital shopping into the in-store experience.

For those who prefer online shopping, the number one reason was the convenience of being able to buy anytime, anywhere. 

Shoppers find online shopping most attractive because:

• Online stores are open around the clock (the leading benefit for 19.6% of respondents)

• It’s easy to use promotional codes when checking out online (16.8%)

• Online shopping does not require the consumer to leave the house (or even put on pants) (14%)

There are no shockers here. These were leading perks of online shopping pre-pandemic, and remain the fundamental benefits of online shopping today. 

In order to align with what customers are looking for in their online shopping experience, retailers may consider expanding their hours of operation. They might find easier ways for customers to access discounts. They must also convince customers that their brick-and-mortar experience is worth getting off of the couch for. 

Another tip: Lower the barriers to purchase by offering drive-through and pickup options as well as in-app checkout. Such features reduce the convenience gap between online and in-person shopping.

For those who prefer in-person shopping, the number one reason was simply that they enjoy the experience of shopping in person. 

Would you believe that many shoppers are still—despite all the anxiety that’s been associated with in-store commerce—shopping simply for the love of shopping? 

Believe it. An overwhelming percentage of consumers (just shy of 35%) prefer in-store shopping because they “enjoy the experience.” The secondary and tertiary reasons why consumers shop in person are:

• They want to interact with products before spending money (24%)

• They do not want to pay shipping fees (13.2%)

Experiences help customers justify spending their hard-earned money. In fact, these statistics tell us that, in some sense, customers are paying for the experience of shopping just as much as the products that they leave the store with.

Section Summary

By surveying customers’ shopping habits and preferences, we uncovered:

• Renewed investment in brick and mortar (in the form of shopping budgets spent)

• A continued appreciation for in-store shopping

• Healthy competition between online and brick-and-mortar retail

• A desire for memorable in-store shopping experiences

We need to dig deeper, though. Customers still gravitate towards the in-store shopping experience, but what specific tastes drive consumer habits?

Part 2: Sentiment Towards the In-Store Experience 

In Part 1, we found out that shoppers remain committed to in-store shopping. With Part 2, we discover what makes shoppers flock to (or avoid) specific brick-and-mortar experiences and organizations.

46% say the in-store customer experience is very important when visiting a physical store. 

The “in-store customer experience” is the totality of the customer’s journey through your store—from entering the parking lot to pulling out. Most customers, though, may judge you most critically on what they experience inside of your store.

The 46% of customers who deem the in-store experience “very important” may return to your stores if:

• They can easily locate products

• They receive top-notch customer service

• They find your store sensorily appealing

• They can check out efficiently

The 36% of consumers who deem the in-store experience to be “important” may make future shopping decisions based on similar criteria. Less than 18% of shoppers are neutral or apathetic towards the in-location experience. 

The conclusion is obvious: Deliver a high-quality in-store experience or lose your customer.  

43% say the in-store customer service has improved over the past 6 months.

Never underestimate the value of unfailingly good customer service. You’re bound to run out of product sometimes, and not every customer will agree with your interior design choices. Offer undeniably great customer service without fail, though? Customers will be far more understanding of occasional shortcomings.

Make no mistake: Shoppers are paying attention to your customer service. 42.5% of consumers said that customer service has improved in 2021 compared with pre-2021 service. However, more than 47% of respondents said that customer service has been unchanged (some might say stagnated) in 2021, while more than 10% have seen a regression in the quality of customer service.

Which category do your stores fall into?

Section Summary

We know that customers value the in-store shopping experience highly, and that customer service is a crucial aspect of the shopper journey. The layout, design, and efficiency of your stores are also going to inspire influential feelings—positive or not-so-positive—in shoppers.

To what extent, though, can positive or negative in-store experiences attract or repel customers’ business?

Part 3: The Impact of Good In-Store Experiences 

General concepts and best practices aren’t enough to guide organizational decisions. Those responsible for brick-and-mortar organizations must know the specific, numerical impact of any course of action. 

Fortunately, respondents left no doubt: Strategic investment in the in-store customer experience has a tangible impact. 

84% of consumers say a positive in-store customer experience makes them more likely to come again.

A one-time customer is a sugar rush, while repeat customers are the lean protein that brick-and-mortar organizations absolutely require for long-term health.

So how do you obtain that protein that your organization so badly needs? Offer stellar in-store customer experiences. If you do, more than 84% of customers will return to your stores, spend more money, and are more likely to turn into lifetime customers and brand champions.

64% say a positive in-store customer experience makes them more likely to spend more at their visit. 

Shoppers have a tendency to feel guilty when they spend money. When you provide a quality experience and show that you care about the customer, they feel less guilty about depositing money in your coffers.

In fact, 64% of respondents said they are likely to spend more per visit when they’re immersed in a positive in-store experience. It’s simply a matter of value—you’re willing to pay more when you feel that you’re getting more for your dollar. 

When you provide a quality experience, you deliver more than just a product or service. The consumer perceives that they are receiving more value per dollar spent when they get a positive experience along with a product or service. When a retailer delivers no experience or a negative experience, the consumer perceives less value per dollar spent and are therefore less likely to spend more (or return in the future).

61% of respondents say a positive in-store experience makes them more likely to buy from the brand online.

When a brand shows that they value the customer’s business, or support like-minded causes and principles, then the customer will spend money with that brand—both in-store and online.

Do you go out of your way to shop with brands that you have an affinity for? Most shoppers will.

A positive in-store interaction will lead 61% of consumers to buy from the same brand through online channels. This compounding effect can be a boon for multi-channel retail organizations.

Section Summary:

In Part 3, customers handed brick-and-mortar executives the answers to the test: If you want a shopper to visit more and spend more, deliver a memorable in-store experience. Customer service, convenience, positive brand messaging, and clever in-store design are all a part of the puzzle.

Deliver in-store experiences that bring the customer value, and they’ll return the favor.

Part 4: Creating and Delivering a Memorable In-Store Experience 

Now that we’ve established the value of in-store experiences, let’s zoom even further into how you can deliver positive customer experiences.

The quality of customer service is the most important factor in a consumer’s brick-and-mortar experience.

The three defining factors of a customer’s in-store experience are:

• The quality of customer service (31.5% of respondents said this was the most important consideration) 

• The variety, quality, and availability of products (29.8%)

• Store layout and physical arrangement of products (19.8%)

It’s not as if customer service is the most important consumer expectation by far. If anything, it’s clear that consumers have a high experiential standard across the board.

Offering experiences that make visiting in-person fun is the number one way to increase visits. 

When asked how organizations can attract their business on a more frequent basis, customers suggested:

• Making the in-store experience “more fun” (the leading response from 27.8% of respondents)

• Offering exclusive in-store discounts (25.3%)

• Offering exclusive in-store products (14.9%)

However, one customer’s fun (vibrant music, for example) can be another customer’s annoyance. Consider the unique, unimposing value of optional customer experiences, like Canada Goose’s Cold Rooms—one of the most innovative in-store experiences of recent times.

Interactive in-store signage is a versatile asset that can inject a dose of fun into the in-store experience.

Section Summary:

Customer service and memorable experiences are foundational features of brick and mortar. However, these foundations require continual care and reinforcement—that is, customer service and experiences must adapt with new technology, consumer tastes, and external conditions.

While many aspects of customer service and in-store experiences remain timeless—attentiveness, politeness, and personalization being three of those aspects—there’s also room for originality in customer service and consumer experiences. In fact, originality is essential.

Blend the timeless with the original and customers will return to your stores again and again.

Part 5: The Future of the In-Store Experience 

To help better understand what the future of the in-store experience will look like, we reached out to leading experts, thought leaders, and executive and asked the question: 

What’s the Future of the In-Store Experience?

Here’s a collection of their insights and perspectives on the future: 

"The future of retail is still a blend of both in-store and online. It used to be that online was an extension of the brand. Now and in the future, it’s the other way around. Many consumers go online before going to the physical store. Some even use their mobile to go online in tandem with their in-store experience.

As this continues, consumers will become more informed buyers on a mission. The retailer that understands the balance and the power of a blended in-store and online experience will have a competitive advantage.”

– Shep Hyken, Customer Service and CX Expert, New York Times and Wall Street Journal Bestselling Author.

"The future of in-store retail goes back to the very roots of good retailing: having the right product, in the right place, at the right time. It’s almost magic, and something we as shoppers often take for granted – that moment you walk into a physical location and leave with the product you were looking for, discovered, or needed.

Physical commerce facilitates an opportunity to connect emotionally with brands that isn’t easily duplicated online. This is why catalyzing, understanding, and measuring in-store engagement is so critical.

The line between physical and digital will continue to erode, as shopping is no longer binary and we shop across all formats. Increasingly, the brands and retailers who win will lean into existing and new data sources and technology to drive the ‘magic’ of the future shopping experience.”

– Keith Fix, CEO of Retail Aware.

“The future of in-store experience will depend on the product category and shopper mission. Replenishment items typically purchased each week or month will become fulfilled with more automation. Whether delivered to the home or picked up in-store, there will be less need for shoppers to walk down traditional aisles to find and select everyday goods.

This leaves time to experience retail that is more aspirational. I envision the development of highly personalized shopper journeys that bridge online exploration with in-store discovery. Innovation in large formats such as automotive and electronics will combine AR,VR, and other immersive technologies to become immersive showrooms. On the other end of the spectrum will be curated boutiques that are high touch with perhaps less tech. These will allow shoppers to dream and enjoy getting “ lost” in shopping.”

– Gwen Morrison, Partner with Candezent Advisory,  Open Voice Network’s Commerce Community Leader, Former CEO of WPP’s global retail practice.

“There are two aspects to the question of the in-store experience. One is getting the customer to come in and the other is what happens once they’re in the store.

To get customers to come in, there’s going to have to be a draw besides the products for sale in the store. Events and education which are related to the purpose or products of the company will draw consumers in. Once they’re there, there is now a need for a higher-level sales associate, just running the register is not going to cut it in the future. That will require more training and higher pay on the part of retailers. Retailers who can’t get those two things right are going to lose out to those who can.”

– Richard Kestenbaum, Partner at Triangle Capital LLC and Contributor to Forbes Retail

“The future of in-store experience is integration powered by choice. The report validated that the ability to shop anywhere is a top decision-driver for shoppers and preferences for online and in-store shopping are essentially tied. The upshot is that retailers must provide options to keep shoppers engaged with their platforms. That equates to options in formats, payment platforms, and both high-tech and high touch experiences. 

Brick and mortar will be the new frontier regardless and in-store automation will continue to encroach. The digital rethinking of brick and mortar will propel self-service media, giving shoppers the ability to run simulations and product placement scenarios while in stores. Ever-more-sophisticated artificial intelligence capabilities will allow retailers to parse data and optimize everything from traffic patterns to inventory shifts and workforce management. Even so, retailers must determine which traditional solutions are ripe for replacement and how they will guide shoppers to new alternatives before taking options off the table. Some choices may seem old school but that doesn’t mean they don’t still matter to shoppers. Disruptive times give retailers permission to do disruptive things. The time to start testing and refining is right now.”

– Carol Spieckerman, President of Spieckerman Retail

“In order to compete with eCommerce, brick-and-mortars must show their customers that their in-store location is just as enjoyable as shopping online. 

According to a study by Deloitte around 50 percent of customers say that the overall enjoyment of the shopping experience was important when making their final decision. When customers visit a store and are offered experiences such as large video display walls, kids’ corner, virtual reality they will want to return. All these elements create a memorable experience and soar customer expectations. 

Retailers can engage with customers by enriching the offline customer journey, for example with an in-store treasure hunt or a prize wheel. These gamified elements create the opportunity to enroll customers in your loyalty program in a fun and seamless way. In the post-COVID era, offering a touchless way of enrollment is more important than ever. Create a novel in-store experience by allowing customers to use their smartphones and connect quickly and easily with them at every step of the customer journey with the help of QR codes and NFC technology. Attract customers in-store with promotions that are designed to build brand or product awareness and provide benefits that online shopping simply just cannot give them.”

– Zsuzsa Kecsmar, Head of Partnership and Marketing, Co-founder of Antavo

“Collaboration and partnerships are going to be the foundation of the in-store experience moving forward. In order to thrive in the new retail world, brands and retailers are pushing aside their past competitive nature that kept them from working together. Some examples of this, happening right now, are Ulta-Target and Toys R’ Us-Macy’s.

Partnerships are also an easier way to add a new category or capability, like Nordstrom-INDOCHINO and Walmart-Verizon. Some are finding partnerships a great way to beef up staffing; that’s why we’ll see Apple shops within Target stores. Others are looking to become part of more “essential” retail brands, so they can survive when a crisis hits. In one example, Hy-Vee invited DSW to open shop-in-shops. This move helped save DSW by allowing buy online-pickup in-store (BOPIS). We’ll see more and more innovative collaborations and partnerships bloom, as a valuable way to help retailers and brands survive and thrive through challenging times and beyond.”

– Debbie Hauss, Executive Director of Content, Retail TouchPoints

“In retail, the mid-sized brick-and-mortar boutique is going to quickly go the way of the dinosaur. The reason is twofold: commercial renting is a huge cost burden and online shopping has outpaced in-person with no signs of slowing down. High-end, experiential stores will maintain a robust in-store experience because they can offer more in terms of service and have a much more selective inventory.

Big fast-fashion chains may take a small hit, but their ubiquity and cheap prices will always attract foot traffic. It is the stores in the middle that will take the biggest hit. The in-store experience has largely moved online, thanks to the pandemic, and the type of clothes being bought online are usually in this mid-tier of price and quality. Online shopping will account for much more of the market share in the future, with brands and stores downsizing their inventory and commercial real estate holdings in order to give a more “destination” feel to their in-store experience.” 

– Hosea Chang, Chief Operating Officer of Hayden Girls

“The future of retail is connected. It has been true for online retail for many years, and now, physical stores also take advantage of interconnected technologies in the physical world.

In e-commerce, data drives sales. You can leverage web analytics tools to track anything like average session duration, the number of visits, pages visited per session, bounce rate, and so on. This data provides valuable insights that help improve customer experiences and overall sales strategies.

Offline, retailers struggled when it came to collecting data from physical retail stores. However, this has changed with the evolution of the Internet of Things (IoT) and related technologies. For example, with the help of Footfall Analytics and other associated products, businesses can now collect data from various sources to measure customer engagement. In addition, Footfall analytics helps retailers better understand the performance of their physical activities.”

– Anel Turkanovic, CEO of Vemco Group

“As an outsourcing company, we saw this happen from two equal and opposite perspectives over the past two years. First, brick and mortar stores were reaching out to us to build eCommerce websites for their stores. This included building the actual websites, plus the “back-end” connections to their existing inventory management and accounting software or the creation/customization of a new suite of tools they can use.

Then, when physical stores began opening up, we saw an influx of clients requesting mobile app companions for their shops — tools the clients could use to reserve items, pay for purchases in-store, or tools that would assist them with making purchases at home with in-store pickups.

This is a trend that seems to be emerging for many development outsourcing businesses.

Stores and businesses opening today look for solutions that are omnichannel right out of the box. However, older companies (and this includes practically any business that launched pre-pandemic) need to make their past software choices fit with the current customer demands.”

– Bruce Mason, Delivery Director, QArea.

“As the majority of Americans are vaccinated and herd immunity overtakes coronavirus, in-store retailers will count on experiential interactions, enhanced customer service, and new safety and wellness measures to attract shoppers back to brick-and-mortar stores. Retailers should prepare and provide a very different shopping environment as consumers return to stores.

Hybrid models such as buy online pickup in-store -BOPIS – or curbside pickup will continue to meet the demands of customers and be part of the shopper experience. In-store retail owners who have invested in those fulfillment models will see further growth.

Customer service and customer engagement will be crucial for in-store retailers trying to regain business to pre-pandemic levels. Businesses that provide great, knowledgeable, and helpful customer service have the potential to not only attract customers and drive sales but also gain repeat business. By providing excellent customer service, businesses leave a memorable and positive experience. Nothing increases the chances of gaining a repeat customer than providing helpful and impressive customer service. It is key to business success. It differentiates your business from the others. And will help regain repeat customers.”

– Carlos Castelán, Managing Director of The Navio Group

“The future of the in-store shopping experience will be increasingly automated. Self-checkout may soon become the only option as human cashiers become a thing of the past. Additionally, online shopping with in-store pickup options has proliferated in brick-and-mortar retail establishments such as Wal-Mart. With this model, people park in designated pick-up spaces and employees bring them their grocery orders. Customers increasingly expect to be in and out of stores as quickly as possible.

Keeping customers coming back requires making their in-store shopping experience as seamless as possible and gathering customer feedback in order to know what to improve upon.”

– Fred Gerantabee, CEO of FGX International

Conclusion 

The primary takeaways from our 2021 State of the In-Store Experience (2021) report are:

• Part 1: Consumers value both online and in-store shopping (brick and mortar is alive and well)

• Part 2: Consumers remain vigilant to customer service and other essential features of the in-store experience (and they’re taking notes)

• Part 3: Positive in-store experiences contribute directly to revenues

• Part 4: Fun is an essential (but not sole) feature of positive in-store experiences

Consumers have returned to stores with willing enthusiasm in 2021, but they haven’t forgotten the convenience of digital commerce. Customer-focused organizations will combine customer service, convenience, monetary value, unique experiences, and fun to win repeat business and lap the competition as 2022 approaches.