Ecommerce isn’t replacing bricks-and-mortar retail; it’s empowering it

In the last ten years, the retail industry has undergone a seismic shift, as the once high street-dominated industry began to transition online - at first, a gradual trend that accelerated during and since the pandemic. Today, eCommerce penetration is soaring. In 2023, Australians spent $63.6 billion online, with eight in ten - or 9.5 million - households shopping online throughout the year and roughly half doing so every single month. 

At various points and to varying degrees, some commentators within the industry said that the proliferation of online shopping would be a huge threat to physical shopping. And while it has undeniably reshaped the retail landscape, the demise of bricks-and-mortar has been exaggerated. In fact, in the age of unified commerce, harnessing the dynamics of both online and in-store shopping is key to retail success. 

Technology isn't replacing bricks-and-mortar retail; it's enhancing it. But how is it doing so? And how can retailers tap technology to elevate their bricks-and-mortar stores at the same time?

Unified approach for omnichannel consumers
According to research from Lightspeed, a unified point-of-sale and payments platform used by thousands of retailers in Australia, we're shopping in physical stores for non-essentials more than online, and we're using online channels to research bricks-and-mortar shopping.

The research found that more than three in four (76%) respondents shop in physical stores at least once a month, while 43% shop online for non-essentials at least once a month - 33% less than bricks-and-mortar. Interestingly, many are using both channels together. The research revealed that almost half (45%) of respondents research a product online before shopping in-store at least once a month. Almost one in five (18%) did so 'more than a couple of times a week.'

So not only are bricks-and-mortar stores still able to attract customers, but online channels are driving their sales as much as replacing them - 18% vs 14%. For all the choices, access, and convenience that eCommerce offers, physical retail provides tactile experiences - like trying on an outfit, comparing products, or chatting with a sales rep - that online cannot offer as easily. 

So, with eCommerce acting as a driver of in-store shopping, rather than only being a threat to it, how can retailers use their online channels to direct people in-store and their store to drive relationships and loyalty?

Driving shoppers in-store
With online channels being so important for consumers to research products and retailers, it's essential for retailers to make their in-store inventory visible online and accurately. In fact, when asked what services they wanted from retailers, 42% of shoppers said the ability to check stock availability online before making their in-store visit. 

This was the most coveted feature, more popular than even loyalty schemes. Another key desire for 19% - the fourth most popular - is click-and-collect. This provides the convenience of eCommerce and negates the need for delivery, which can be unreliable and expensive. Indeed, 53% said shopping in-store purchases allow them to 'avoid shipping or return costs'.

Over half (56%) of consumers are drawn to physical stores to view products in real life – including samples and trials. When they're there, retailers can focus on providing meaningful experiences and building personal connections that can be harder to forge with online shoppers.

Fostering connection, incentivising loyalty
For all of the convenience and access eCommerce provides, when shoppers are in-store, it's easy for retailers to provide the attention and community that their customers desire. Lightspeed's research shows that 34% want access to special deals for locals, which in-store retailers are well-placed to capitalise on.

One in four (25%) also want personalised customer service, which happens in abundance in face-to-face retail. Unique and locally-made products (25%) and having shared values with a business (24%) are also key drivers of loyalty. 

With the right in-store technology, retailers offer many of the same benefits available with eCommerce, from payment flexibility like Buy Now Pay Later to access to loyalty programs and gift cards. Ultimately, with technology facilitating the meaningful connections that retail is forged on, retailers can provide omnichannel customer experiences that foster loyalty. 

Despite all the narratives of eCommerce versus bricks-and-mortar, they should be treated as supplementary rather than competing strategies. While eCommerce penetration is increasing, it's not just as a platform for online sales but as a way for consumers to discover and engage with bricks-and-mortar stores. The more retailers can leverage these channels to improve the other, the better-positioned they'll be to succeed in the rapidly evolving retail world.