Heiner Evanchitzky, Professor and Chair of Marketing says there remains a clear impetus for retail brands to have a physical footprint.

A number of high street names have become online-only after being snapped up by ecommerce brands in the past 18 months. From Asos to Dorothy Perkins and traditional retail giants like Debenhams, digital fashion is becoming an increasingly saturated marketplace.

But that’s not to say that physical fashion is a dying beast. Indeed Marks & Spencer is just the latest retailer to boast of its multi-channel proposition, with CEO Steve Rowe feeling that its store estate is a crucial weapon that puts it ahead of its online rivals.

And he may have a point. While ‘digital is king’ still rings true – to some extent – there are advantages that a store estate brings that simply can’t be replicated online. As ever, putting the customer experience at the heart of that will be key for retailers adapting to the post-pandemic marketplace.

Harnessing the advantages of a store estate

First, there are some advantages that a store estate can bring to a largely online retail operation. For instance although M&S now makes more than half of its clothing and home sales online, it has also recently announced the rollout of same-day deliveries on clothing, meaning it’s the first big fashion retailer to offer rapid fulfilment orders. Crucially, Rowe explained how this was only possible thanks to the retailer’s estate of 1,000 plus stores.

Also by relaunching brands as ‘online only’, ecommerce giants risk missing a once-in-a-lifetime opportunity to cement their brand with shoppers in person, and to build valuable consumer loyalty.

Following months of being hemmed in the home because of the pandemic, footfall still exists on the high street because customers today are looking for a different experience than going to a retail park or sitting behind their screen.

Having a physical store offers retailers a chance to engage their customers, enabling them to see, touch and ‘breathe in’ a brand. The recent outpouring of nostalgia when the iconic Topshop store on Oxford Street closed its doors serves to hammer this point home, demonstrating how much sentimental value consumers associate with physical locations.

Creating an experience

High streets across Britain have always offered something a bit different. They capture the personality of towns, and are the central hubs of communities. While high street businesses have a major part to play in making this happen, they also benefit from the experience customers have as a result.

High streets are no longer just places to shop. Stores are a chance to foster relationships with customers, by finding innovative and immersive ways to inspire consumers and help them understand the brand.

Take Apple’s next-generation stores, for example. Its flagship Union Square store in San Francisco features a ‘Genius Grove’ for consumers to receive expert support, an outdoor plaza and communal event spaces, and a ‘Boardroom’ where Apple's business team can offer advice and training to entrepreneurs. It’s about creating a brand experience, not driving a hard sell.

Commercial benefit

Research also proves that there is still clear commercial benefit in physical store locations. At least 30% of all products ordered online are returned, compared with only 9% in bricks and mortar stores. This is a benefit for both shoppers and businesses, as online returns can be a major headache for retailers as they’re more difficult to forecast and to capture in real-time. But in-store shoppers have the chance to exchange or buy alternative items, and they might be more likely to do so if their experience is a truly engaging, unique one.

The online revolution continues to evolve and the digital shift, while not entirely irreversible, isn’t likely to do a complete U-turn. But there’s a clear impetus for brands to have a physical footprint.

When shopping is understood as an experience the purpose of physical stores becomes clear as they’re a different way to engage with customers and drive brand awareness and loyalty. And when the current crisis is behind us we should expect a bounce-back from those physical locations that are more than just places to shop.

Written by

Heiner Evanchitzky

Professor and Chair of Marketing

Alliance Manchester Business School