Over the last year, nearly every retail segment experienced an upward swing in visitations. Shoppers returned to stores in force with mall foot traffic experiencing a boost, right along with downtown shopping corridors, driven by seasonal sales. The in-store shopping experience remains unmatched, as retailers are eager to welcome back those consumers who crave the immersive, sensory experience that brick-and-mortar stores offer. However, there’s a caveat–as 42% of consumers expect a seamless experience across devices and channels, according to research by Wunderman Thompson.
Anjee Solanki
“With 42% of consumers expecting a seamless experience across devices and channels, retailers must prioritize omnichannel strategies to stay competitive in an evolving retail landscape.”
Meeting Consumer Expectations
Even retailers with solid omnichannel retail strategies need help to maintain momentum. For example, Target store visits were down 1% in 2023, and restaurants experienced a 0.41% decrease in visits despite folks’ increased use of Uber Eats and DoorDash for takeout. Americans ordered takeout or delivery an average of 4.5X per month, compared to dining in at a restaurant 3x times per month.
While many believe that adopting omnichannel strategies are essential for growth, shifting consumer behavior online doesn’t always translate to increased market share.
Take Dollar General and others in the discount store sector. The segment remains resilient despite declining spending, heightened competition from other discounters, and a strategic disadvantage in e-commerce. YTD data for 2024 reveals that dollar stores experienced a 3.09% uptick, indicating that value-conscious consumers frequent these stores despite economic pressures or retail shifts. As consumers frequent low-cost retailers, the “dupe” culture has taken hold, where consumers scour the Internet (using their desktop or mobile!) to source the best deals and prioritize low prices over brand loyalty. Stores like Dollar Tree and Dollar General have seen increased sales of beauty products, including dupes of popular brands like Glow Recipe. With 71% of Gen-Z shoppers opting to buy cheaper versions of name-brand products, it’s no surprise that other discount grocers and retailers–Trader Joe’s and Aldi are also bidding for market share.
The Omnichannel Ringer
One of the most loved omnichannel experiences that prioritizes convenience is the buy online pickup in-store (BOPIS) offering. In 2023, 16.4 million consumers in the U.S. used curbside pickup to pick up their online orders, which is a 37% increase from 2021. And by 2024, BOPIS sales are set to double to around $140 billion.
Same-day delivery services are no longer limited to Instacart, grocery retailers and Amazon Prime, as Target and Walmart launch their programs and other retailers and groceries partner with Instacart, DoorDash, Shipt and UberEats. Target’s innovative same-day services drive substantial growth, accounting for over two-thirds of total sales. Its popular Drive Up service leads the charge, which saw a 14% increase in Q2. This convenience-focused offering generated an impressive $2 billion in sales during the quarter and over $4 billion year-to-date.
Target is further elevating the Drive Up experience with its groundbreaking Apple CarPlay integration. This feature allows iPhone users to seamlessly access BOPIS services directly from their car, attracting even more customers. Additionally, the retailer plans to expand its program with Starbucks further, adding convenience (and foot traffic) to select locations with drive-up coffee kiosks.
Retailers continue to initiate omnichannel offerings to enhance the consumer shopping journey. One of the latest features integrates QR code platforms to expedite pickups and simplify feedback channels. In addition, AI-driven innovations like smart shelves that automatically trigger restocking needs and AI-powered chatbots that answer questions and recommend products complement offline channels.
Consumer sentiment toward AI in retail presents a complex landscape as highlighted in the Colliers Fall 2024 report, AI in Retail: Essential Insights for Retailers, Landlords, and Consumers. Many shoppers appreciate AI for its efficiency and tailored recommendations but remain skeptical about its impact on customer service and job security, fearing it may lead to a depersonalized shopping experience and potential layoffs. This ambivalence drives a significant number of consumers back to brick-and-mortar stores, seeking the irreplaceable human touch and emotional understanding that AI currently lacks. This tug-of-war between technological convenience and the need for personal interaction shapes consumer behavior, underscoring a critical challenge for retailers: balancing innovation with genuine customer service.
Nicole Larson
