Brick-and-Mortar Retail Resurges: Report

The Colder’s crew, welcoming back store visitors in 2020

Shoppers are flocking to physical stores as pandemic recedes

By Alan Wolf, YSN

Following a two-year-long surge in online shopping prompted by COVID-related restrictions, consumers are visiting physical stores in growing numbers now that pandemic concerns have eased.

According to a report in The Wall Street Journal, the rise in foot traffic, along with slower but continued growth in online sales, supports an omni-channel strategy for retailers that provides the best of both worlds for customers.

Data supports the new equilibrium between digital and physical shopping. Statistics from the U.S. Census Bureau show a decline in total online sales during the 2021 holiday selling season of nearly 3 percentage points from a channel high of 15.7 percent in the second quarter of 2020, when lockdowns were still in effect, representing a return to pre-pandemic trendlines.

Mastercard similarly reported a 3.3 percent dip in online spending in March — the first year-over-year decline since 2013 — as sales soared 11.2 percent at brick-and-mortar stores, the Journal noted.

Rachel Glaser, CFO of online handicraft marketplace Etsy, points to the waning pandemic for the increase in in-person shopping. “We are seeing reopening happen and there’s this pent-up demand to go out, to dine out, to travel,” she said on a recent earnings call.

For Bernstein Research analyst Mark Shmulik, the return to physical retail is more elemental. “We’ve got over 100 years as a society of going into a store to buy something,” he told the Journal. That muscle memory doesn’t just switch off because you were forced to buy things online a couple of times during a pandemic.”

Jeffrey Raider, co-founder and co-CEO of Harry’s Inc., which makes and sells men’s personal care products, agreed. “The Internet is a great place to transact [but] it’s not great to discover,” he told the newspaper. “There’s something that’s just amazing about in-person discovery.”

For BrandSource dealers, the easing of e-tail’s explosive growth also brings a blunting of online-only sellers, which is good news for independents. One major competitor, Wayfair, which sells furniture and appliances direct, acknowledged losing 4 million active customers in 2021, while the total value of goods sold by Amazon last year grew at half the rate it did in 2020, according to market research firm Marketplace Pulse.

Nonetheless, online sales are still up from pre-pandemic levels and continue to grow, reflecting a long-term shift in shopping behavior, the Journal reported. But while e-commerce will likely continue to capture an increasingly larger share of consumer spending over time, spurred on by advances in digital technology, “There are still some elements of the in-person experience that will be difficult for digital to duplicate,” the newspaper concluded.

Hat tip to The Wall Street Journal.