Retailers Up Their In-Store Game to Attract Holiday Shoppers

Though online sales continue to outpace in-store purchases this holiday season, based on PYMNTS’ survey of Black Friday shoppers, consumers are frequenting stores more often now than they were a year ago — and some may find a transformed retail experience.

In Charlotte, North Carolina, for example, Best Buy has been testing several new store models at five locations that have minor changes and two with new and expanded product categories, such as an “Autotech Megahub” and an outlet store. Each store is also testing different types of fulfillment and services, such as new pickup lockers and more warehouse space for online orders.

Best Buy is also testing a virtual store built within a distribution center, staffed with dedicated associates but inviting no physical customers. Instead, shoppers interact via chat, audio, video and screen-sharing to see live demos and physical products.

“Stores are crucial to our customer experience, and they need to be even more efficient and must keep pace with greater customer expectations,” CEO Corie Barry said on a conference call with analysts last week.

Related news: Best Buy Pins Future Sales on HealthTech, Virtual Stores

Dick’s Sporting Goods has also made a series of investments aimed at improving its physical presence, opening more off-price stores and launching an experiential House of Sport concept that features a turf field and running track, a rock climbing wall, batting cage and putting green, all of which are meant to drive foot traffic to brick-and-mortar locations.

In September, the retailer also opened a new outdoor-centric store concept called Public Lands, which includes an assortment of outdoor and lifestyle apparel, footwear and equipment.

“Our strategies continue to work as we reimagine the athlete experience in our core business and with new concepts,” Ed Stack, executive chairman, said in a statement earlier this month. “As we said before, we believe this will be the most transformational year in our history, and we expect to continue this transformation into 2022.”

Read more: Dick’s Sporting Goods’ Focus on Experiential Retail Boosts Q3 Sales

According to PYMNTS research, more Black Friday shoppers went back to stores in 2021 than 2020, but eCommerce still got more business from shoppers during the annual sales event. Over 27% of shoppers made purchases online on Black Friday, while 22% said they made purchases in-store and 16% said they did both. Approximately 35% said they did not shop on Black Friday.

Also see: Inventory Stockouts Cost Retailers up to $4.6B on Black Friday

The Holiday Test

In September, Mastercard SpendingPulse projected that department store sales will rise 15% year over year this holiday season, which would also be a 5.2% increase in sales versus 2019.

To be sure, 2019 was still a year in which department stores struggled mightily, with comparable sales down 1% year over year at Macy’s and net sales down 8% at JCPenney, which just months later filed for bankruptcy. However, Steve Sadove, former Saks CEO and senior adviser at Mastercard, told PYMNTS that he hasn’t seen this kind of growth in the department store sector in years.

Whether people will continue to frequent physical stores in the coming years likely depends on how satisfied consumers are over the next several weeks as they shop for gifts and make post-Christmas purchases. If it’s a great experience in which people find what they want and get good service, Sadove predicted that they’ll likely go back even if they continue shopping online for certain items; otherwise, brick-and-mortar locations could be in trouble.

“The fastest way to go into a declining trend is to not give a good consumer experience,” he said. “We’re at that moment right now, and some are going to do it well and some aren’t going to do it well. And that’s going to affect how this plays out over the next six months to a year.”

Read more: Holiday 2021: Pent-Up Consumer Demand, Test of In-Store Experience for Retailers