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  • Writer's pictureRealFacts Editorial Team

How Online Shopping Is Saving the Bricks-and-Mortar Store

a glass window storefront

In a world where e-commerce once threatened the existence of traditional stores, a remarkable shift is underway. Bricks-and-mortar stores are not only surviving but thriving, thanks to their integration with the online shopping experience.

Once viewed as a mounting threat to their survival, many store owners have found innovative ways to leverage their physical locations in the digital age. Instead of seeing online shopping as the enemy, they've embraced it as a complementary aspect of their business model.

Customers now have the option to browse in person, experiencing the tactile satisfaction of seeing, touching, or trying on items before making their purchase online. Moreover, they can pick up or return items in-store, creating a seamless shopping experience that combines the best of both worlds.

This integration has become increasingly vital for retailers, with nearly 42% of e-commerce orders last year involving stores, a significant increase from previous years. Neil Saunders, managing director at GlobalData, emphasizes, "In many ways, the store is still the heart or hub of retail."

The pandemic accelerated this trend, forcing retailers to offer curbside and pickup services, which customers have come to expect. This shift not only helps customers avoid shipping fees but also allows them to receive their purchases more quickly.

However, this integration isn't without its challenges. The return of online items in-store can affect sales metrics, making it challenging for landlords to set rent rates. Additionally, not all retailers have figured out how to make in-store pickup profitable, especially in industries like grocery, where margins are thin.

Despite these challenges, national retailers like Kohl's, Walmart, and Target have successfully integrated their online and in-store operations. Kohl's now fulfills more than a third of its online orders in stores, while Walmart fulfills more than half, and Target nearly all its sales through its extensive network of locations.

Other retailers, like Abercrombie & Fitch Co., have invested heavily in technology to create a seamless omnichannel experience. By designing locations to facilitate quick and easy retrieval of online orders, Abercrombie & Fitch has seen significant digital growth, accounting for 45% of its business across four brands by the end of 2023.

The rise of e-commerce has undoubtedly transformed the retail landscape, but the resurgence of brick-and-mortar stores proves their enduring relevance. As Scott Lipesky, Chief Financial and Operating Officer at Abercrombie & Fitch, notes, "The customer demands this seamless omnichannel experience where the stores and the digital business are connected."

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