Physical Retail Looks For New Life This Holiday Season

The obituary for brick-and-mortar retail has been written many times. But recent developments show there is still life — and perhaps even new life — in physical commerce.

Returns promise to play a big role in that in the coming weeks.

The results of a new survey found that most people — around 77 percent — plan on returning some of their gifts this holiday season, according to reports. About 20 percent of those surveyed said they would probably return upwards of 50 percent of their presents. Of those returning gifts, 32 percent said they would use the mail, while 65 percent said they would return in-store.

“Retailers need to seize the moment when shoppers return gifts. The traffic generated by holiday returns holds significant opportunity for retailers to build better customer profiles and generate new opportunities for engagement by personalizing the returns experience,” said Jeff Warren, vice president of retail solutions management, Oracle Retail. “Preparing for returns is a best practice; leveraging returns intelligence to inform product development and new customer acquisition strategies is next-practice retail.”

The youngest generation, Gen Z, will return the most presents. In-store holiday returns present a unique opportunity for retailers to either upsell or capture another sale while a consumer is in the store, aided by savvy store employees and retail technology.

Consumer Trends

Indeed, data show that 75 people of people still prefer to shop at brick-and-mortar stores, a fact that has incentivized stores to keep inventory on hand and to maintain stock of certain “must-have” seasonal items.

The survey showed that Generation X encompassed the most prominent online shoppers, with 57 percent of them having goods shipped to their homes. Baby boomers were the second most likely to shop online and have goods shipped home, at 56 percent. Both of those demographics surprisingly beat out millennials, at 53 percent, and Gen Z, at 46 percent. The latter two categories showed they would rather order online and pick up the goods at the store, while only 14 percent of baby boomers said they wanted to shop this way.

Luxury retail is also playing a role.

For instance, the new Nordstrom New York City store offers several different food and beverage locations, as well as the ability for shoppers to order food and have it delivered to them while they shop. The seven-floor store is Nordstrom’s biggest location ever. Bloomberg reports that it offers a bevy of innovative options intended to entice customers into spending more time shopping. It includes a skincare service called the FaceGym, where people can try “signature muscle manipulation techniques.”

Salespeople wear headsets so they can order food for shoppers anywhere in the 320,000-square-foot location. The retailer has also installed a bar in the shoe department, aptly called the shoe bar, where customers can try cocktails while shopping for footwear.

Mall Trends

Meanwhile, as traditional mall merchants go under, online brands are expanding into brick-and-mortar, the New York Post reported.

More than 1,700 physical stores in the U.S. were digital merchants first, the Post reported, citing Fifth Wall and Thinknum Alternative Data. One example is New York’s UNTUCKit, which started as an online men’s clothing store and grew into a global brand. It now has 85 stores and will soon add another when its Milwaukee location opens.

“Opening in a mall is great for our brand because the customer gets a much stickier experience, and your long-term value grows,” UNTUCKit Founder Chris Riccobono told the Post. “Malls are going to become more exciting as some of the old retail guard clears out, and the new guard moves in.” He said when the company launched in 2011, the “buzz” pointed to a shopping future without physical stores. It didn’t take the company long to realize that a large percentage of its customer base “… will simply not buy until they get to touch and feel the product in the stores.”

The true strength of these trends will become more clear in the new year.