Reshaping retail.
How in-store and online retail are shifting to meet new consumer needs
In-store shopping is still going steady. Sixty-three percent of consumers say they typically shop in-store, versus 37% who typically shop online. Shoppers who shop in-store are drawn in to see, touch, or try before buying (66%), avoid wait times for deliveries (59%), or avoid delivery and shipping fees (54%).
On the other hand, shoppers who prefer to shop online say the convenience of easy research, the 24/7 nature of online shopping, and the ability to pause and come back were the primary reasons they chose to shop online rather than in-store.
Overall, respondents in older generations, like baby boomers or Gen Xers, prefer an in-store shopping experience, while younger generations, like millennials and Gen Zers, prefer to shop online. Regardless of generation, 62% of shoppers say they prefer to shop at a specialty retailer rather than a big-box or department store.
When it comes to specialty shopping experiences, Gen Z (64%) and baby boomer (66%) customers were most likely to shop in person, whereas millennial (43%) and Gen X (38%) shoppers were more likely to shop online.
Consumers would be more likely to try in-store options if a business offered them:
Loyalty program perks for in-store shoppers (61%)
In-store dining options like a coffee or wine bar (48%)
Interactive displays, kiosks, or activities (29%)
QR codes for additional info or promos (21%)
Virtual experiences like VR or AR (19%)
Renting space for a party or event (12%)
Regardless of generation, all shoppers responded that they were most likely to go in-store if loyalty program perks were offered to in-store shoppers only.
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Shoppers are increasingly interested in businesses using a range of channels to communicate with them. The majority of shoppers say social media communications or direct messaging are their preferred way of receiving information.
Preferred communication channels:
Email (63%)
Facebook (36%)
Text messages (32%)
Social media direct messages (23%)
Instagram (20%)
Website chat options (14%)
TikTok (14%)
In the poll above, consumers were able to vote for more than one preferred option. Of those surveyed, only Gen Zers gravitated toward communications through messaging such as text messages, Instagram, or TikTok.
Businesses are increasingly exploring artificial intelligence, or AI as a way to enhance the shopping experience both online and in-store for customers. In fact, a 2022 McKinsey survey found that 50% of organizations report using AI in at least one business area. The majority (66%) of shoppers surveyed for this report support retailers using AI-based tools for certain tasks like automated checkout processes, price optimization, and product search. Here are some of the preferred uses of AI.
- Automated checkout (31%)- AI-based product search (22%)- AI-generated product descriptions (22%)- AI-based dynamic pricing (21%)- AI-generated product recommendations (18%)- AI-generated product reviews (15%)
Oakland, California-based Red Bay Coffee leverages A.I. for a range of tasks, from generating product descriptions to writing copy.
“We use it to help us come up with blog topics, first drafts of blogs, subject lines of emails,” said founder Keba Konte. “We’re using it in our finance department to create spreadsheets, and we’re using it in other marketing materials and copy that we’ll edit accordingly.”
