The Return of Shoppers to StoresBy Anabell Trejo | Thu, 03/24/2022 - 11:00
Retail is one of those industries with a long tradition in the history of mankind’s economic activities. It started with the exchange of goods through transactions. Although today the basis of this industry is the same, consumers, trends, and products have evolved.
In the last decade, the predominant trend in retail was the conception of the mall as a recreation center, where amusement parks, restaurants, and other activities were considered priority activities for visitors. Buyers preferred to visit places where they could spend time with the family as a primary activity, making commercial activity secondary.
With this trend, the era of the "in-store experience" became popular in physical stores. What impact did this have on the consumer?
In the pre-pandemic context, the average purchase intention per store tended to be around 30 percent. In other words, the brick-and-mortar stores expected that for every 10 people who came in the store, three would make a purchase.
With this common behavior, retailers had to blindly trust their growing sales to the number of visitors to the mall or on the street and know the social context of each area: whether there was a sports event that weekend, a political demonstration, concert, or something else that would have an impact on people staying in the commercial space.
The Pandemic Changed Everything
The confinement imposed to prevent the spread of the pandemic radically changed the perception of buyers in physical stores. Although e-commerce took advantage as one of the safest and easiest options to keep purchasing products, in 2020, people were eager to leave their homes.
Most of the brands with physical stores were terrified by the closures and the ease of purchase through digital channels. At an early stage of the pandemic, the panorama indicated that the return to physical stores was going to be complicated and expensive.
This caused a very peculiar phenomenon within the industry: contrary to what retail experts were expecting, buyers began to go out and buy as the possibility of going to physical stores opened up.
So, what happened throughout 2020 and 2021 in retail?
People broke with expectations and demonstrated a high purchase conversion. In other words, practically every person who entered a store ended up making a purchase. People had decided to buy from the moment they thought about going to a store.
Buyers on average also bought more items for each transaction made and, in most cases, they didn’t skimp on spending on the most expensive products.
Since the reopening of malls in late 2020, this behavior has become recurrent in the industry. Although the results depended on the industry sector, most stores posted better growth than expected.
At the time, everything seemed like a fortuitous formula that happened without planning but let's remember that at that time, the social distancing rules and capacity restrictions allowed for only a few people at a time to be inside the stores. So, the stores that took advantage of the opportunity during this time became more profitable.
The 2022 Retail Paradigm
This year started with the return of shopping normalcy and this once again moved the flow behavior of buyers toward shopping malls. What consequences does this have?
The number of shoppers is returning to pre-pandemic levels and this has had a direct effect on purchase intention since people are no longer as convinced about making their purchases as they were last year.
People are going into the stores but, now, making a purchase is not necessarily the main reason for their visit. Customers are comparing prices, hunting for the best discounts and new products.
This behavior is in line with the trend in which a visit to the mall also included recreation and entertainment as the principal motivation.
In the previous two years, retailers received some insights about their own sales process and above all, they realized that even in an uncertain landscape, they never stopped selling.
They realized that even in a complex context they could keep going. Now, with better conditions, this growth should be replicated.
With these changes in the influx of people and sales, the key for retail for this year is to bet on their attraction rate. Although store staff have the last chance to close a sale, the main factor will be the actions that draw the attention of those who walk by the store.
As the projections indicate that this year will see continued growth of commercial spaces, it is important that stores capture the highest percentage of people and draw them inside.