As shoppers become more tech-savvy and demand that retailers offer a more mobile, cross-functional shopping experience the retail industry as a whole has undergone a variety of drastic changes. In prior years traditional brick and mortar retailers saw steep declines in foot traffic.
The Decline of in-Store Sales
In 2009 nearly 35 billion consumers shopped at physical retail locations. By 2013 this number had declined by 50% with only 17 billion in-store shoppers in the US. This reduction in foot traffic led to in-store sale declines of nearly 4% over the same reporting period in 2015. Declines in both foot traffic and brick and mortar retail sales brought upon significant restructuring efforts and the development of new and improved online and mobile sales channels.
The Rise of Omnichannel Strategies
For many, this was the fire that ignited the shift to omnichannel retailing and new lower priced in-store options. Major retailers such as Nordstrom, Macy’s and TJ Maxx have opened 604 “off-price” stores in 2015 alone. This represents a 12% increase in a single operating year. These stores were retailers’ solution to consumer demands for lower priced, high quality goods. Off-price stores have given consumers more reason to enter their physical locations while also building a stronger brand loyalty. For those consumers leaving physical store locations in favor of online sales channels, many retailers have improved the efficiency and ease of use of e-commerce sites, shopping carts, mobile applications and rewards programs. This omnichannel optimization and introduction of Big Data analytics has helped retailers, both small and large, to increase e-commerce sales to the tune of nearly $142 billion in 2016. This trend is expected to continue as retail businesses invest in new technologies and further develop existing and new sales channels.
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