Industry Insights



Industry Insights


3 min read

The report of on-site retail’s demise has been greatly exaggerated. Let us count the ways.

The saying ‘you had to be there’ didn’t apply to malls in the last decade-plus or any retail place during the pandemic, but people know — even if occasionally having to relearn — that there’s nothing like in-person shopping, dining and entertainment. Retail centers offer more than goods and services; they offer variety, discovery and, perhaps most importantly coming off COVID-19, the opportunity for social interaction and experiences.

GlobeSt. examined how physical stores remain “a vital backbone for the retail industry.” Everyone from lifestyle centers and big box stores to discount shops and mom & pops will like its conclusion: “While you can take retail out of the store, you can’t take the store out of retail.”

By the Numbers

It was not surprising in the least that e-commerce volume jumped significantly during COVID-19. E-commerce grew from 11.1% of total sales in fourth quarter 2019 to 16.4% by June 2020, according to Census Bureau data, but then back to 14.7% by the middle of 2022. By November 2022, the portion of consumers shopping on retail brick and mortar sites was about par with where it had been pre-pandemic, GlobeSt. reported referencing survey data from CapGemini’s 2023 consumer behavior study.

Those industry pundits insisting that e-commerce would become the dominant form of retail ignored the power of the people, specifically indomitable human nature that will always spur people to get out, socialize, and stop and smell the retail roses. Furthermore, stores support communities with necessity products and services and can rally them with on-site activations, which e-commerce obviously can’t.

“If you’re a pure-play e-commerce, it is expensive and time-consuming to reach people,” said Stephanie Cegielski, Vice President of Research at the International Council of Shopping Centers.

More Bricks & Mortar Benefits

Retail brick & mortar is the full complement or, better put, full of complements. The old-school way is harmonizing tenants that trigger walkup customer traffic for each other. The new wave manifests in a halo effect supporting retail omnichannel strategy: when a store opens, online sales for the retailer in that market increases 37%, while if a store closes, online sales decrease 33%, according to Cegielski.

Site selection obviously is critical across the entire commercial real estate spectrum. Students in the first week of Real Estate 101 know that – location, location, location – but in retail, effectively placed stores can also serve as their own advertising.

Getting Smarter

The reality is that with e-commerce consumers have another option if on-site retail is not satisfactory. That has made the latter work to be better. One key lesson learned by store operators is to commit to very good service, with hands-on expertise becoming a “pivot point” for why customers want to come into the store.

“So much of what our customers rely on us for is expertise,” said Craig McNair, Batteries Plus’ chief retail officer. “It’s about experience, multichannel, to get products and services in the ways you want to get them.”

Speaking of multichannel, it’s like experience goes both ways—on the giving or service end as well as receiving or experiential. It all counts for customer experience, which has never been more important in the retail world.

“If you need proof that the social, experiential need of consumers will never go away, just look around at the countless concerts and sporting events, as well as the rebounding travel industry. The same rings true for retail,” said Michael Rivera, infinitee’s creative director. “Whether reimagining your retail space or refining operations based on post-pandemic lessons, keep your eye on the customer and find yourself a good marketing partner.”