Alex Strang is a insight editor at Canvas8 who used to be in a punk band that was signed, shaped and spat out. He enjoys using his experience of being the product to help brands understand how to sell theirs. After studying Philosophy and Critical Theory, he found his feet in the market research world and has been over-analysing consumer behaviour ever since, including his own. He can usually be found playing board games, watching Seinfeld or trying too hard to make his daughter laugh.

In 2013, UK shoppers were avoiding the high street. Instead, they flocked to online retailers for everything from electrical goods – which rose by 63% – to gardening items, which rose by 42%. In November 2013, online sales were up 10% year-on-year, while footfall numbers to high street shops dropped by 2.9%. In contrast, online sales in the UK rose to a record of over £10 billion. 

E-commerce sales are expected to reach an all-time high in 2014 at $1.5 trillion. But despite these sales continuing to rise, a study in the US found that teenagers are still firmly footed in the preference for real-world shopping. The study revealed that 74% of female teens and 53% of males retain a preference for brick-and-mortar shopping. 

 Echoing this in the UK, a study by UCAS found that 70% of students prefer brick-and-mortar stores to shopping online. 

With online sales rising, but research pointing towards the continuing importance of brick-and-mortar stores, the issue is confused. In an attempt to crack it, we sat down with John Ryan, a retail expert and Stores Editor of 

, to ask how and why brick-and-mortar stores can retain their custom.

“There was a time when the received opinion about retail was that online operators would carry all before them,” says Ryan. “Web-based merchants would destroy retailers in possession of large chains of stores owing to their lower running costs, more comprehensive offers and attractive prices.” But the continued interest in brick-and-mortar sales and stores has proved this wrong. “People thought that high streets would flounder,” says Ryan, “yet very little of this apocalyptic scenario has come to pass.” 

But how have brick-and-mortar stores managed to stay afloat? “Retailers have embraced the online revolution,” Ryan explains. “Multi or omni-channel retail become the norm.” 

 While there have been undeniable high street casualties – Woolworths and Phones4U, for example – perhaps these are as much as reaction to the global economic crisis as they are, in Ryan's words, “a vast defection by shoppers to online retail and away from brick-and-mortar shops.” 

 Ryan believes that a brick-and-mortar store is crucial for some brands in maintaining their relevance, and can be just as important and as a compelling online presence.

Bonobos combines its online presence with a real-world shopping experience

The blending of an offline and online presence is the perfect retail recipe, according to Ryan. “In 2014, there is increasing evidence that many ‘pure play’ online retailers (i.e. web-only merchants) are taking the view that as well as having a slick, compelling website, there is every reason to have a shop, or even shops,” Ryan says. 

 And Birchbox’s Manhattan flagship store is a great demonstration of this. 

Birchbox’s origins lie in online retail – it’s a beauty box subscription company with over 400,000 current subscribers. As well as being open to the general public, Birchbox’s flagship store lets subscribers buy full-size versions of the products they’ve been sent trial-size versions of in their monthly beauty boxes. 

 So the store operates as a separate entity from the subscription model Birchbox adheres to, as well as fitting seamlessly into it.

“The Birchbox example is almost exactly the opposite of what was predicted a few years ago,” says Ryan. “The store has a Build Your Own Birchbox area where shoppers can buy five sample-sized products, in-store beauty tutorials, and an emphasis on learning as much as buying.” the store is an extension of the website – and, as Ryan explains, “even the interior is for the most part clad in birch – an instance of a web merchant making physical its virtual avatar.” 

The collect experience may well develop to be at the heart of the store, where you can learn more about your purchase and see it demonstrated

Bonobos, the largest internet-launched clothing brand in the US, also combines an online presence with the offline world. The website is complemented by Guideshops – which let men meet with a stylist, try on clothing, and then place orders online to get products shipped to their houses. “We understand there are people who still want to touch and feel clothing before they purchase,” says CEO and founder Andy Dunn. “The direct service experience at our e-commerce stores help people understand our brand and discover what fits and looks good on them, making future web purchases even more convenient.” 

Even the online giants are getting in on the brick-and-mortar act. In October 2014, Amazon announced that it will be opening its first physical store during the 2014 holiday season in New York City. 

 With Amazon’s focus on the Fire Phone, its tablets and the Kindle range, it’s possible that the brand wants to create an atmosphere where it can control customer experience of these pieces of technology – allowing people to see and feel products before they order them. The opening of a brick-and-mortar site is “about marketing the Amazon brand,” says Matt Nemer, a Wells Fargo analyst. “Same-day delivery, ordering online and picking up in store are ideas that are really catching on. Amazon needs to be at the centre of that.” This evolution of Amazon’s delivery model could well see its future being centred on click-and-collect’ - a real merging of online and offline shopping. 

Over 45% of UK internet users have used a ‘click and collect’ service – and Ibrahim Ibrahim, Managing Director of Portland Design, envisions shops having less products on the shelves, fewer outlets and less floor space dedicated to transactions. More merchandise will be online, but stocked and collected in store. 

 “The collect experience may well develop to be at the heart of the store, where you can learn more about your purchase and see it demonstrated,” says Ibrahim. “This may be where products are customised and the store experience becomes more convivial with food and beverages and entertainment. In future, the physical store may not be where you buy merchandise, but where you buy mementos – a memory of the experience.” 

 And the trend is only expected to continue, with the proportion of people using it estimated to reach 

It started off as a subscription service, but now Birchbox has physical stores and a dedicated follo

The rise in online shopping could be put down to what Ryan explains as “shopping becoming about commodity and customers being prepared to shop around to get the best deal” – something that’s readily available online. But there are still ways that brick-and-mortar stores can compete, and beat, shopping online – by providing great experiences. “Retail experience is probably a much-overused term and it will mean different things to different people, but essentially it is what will differentiate being in a shop from shopping online,” says Ryan. 

By turning shopping in a store into an experience, retailers can create atmospheres that can’t be replicated online – they can create 

. In H&M’s Times Square New York flagship, the company created a digital catwalk that would display customers on a giant billboard overlooking Times Square. 

 A short film was made of the customers on the catwalk, and then they were alerted as to when they would be able to see themselves on the billboard – as well as being able to relive the moment on the H&M catwalk website.

Retail experience is probably a much-overused term and it will mean different things to different people, but essentially it is what will differentiate being in a shop from shopping online

“Practically, this meant shopper data capture for the retailer, and the chance to hang onto the memory of an in-store experience for shopper and retailer,” says Ryan. “What's more, it was a digital and store-based experience that gave shoppers a reason for entering the shop. Shoppers entering an H&M store are likely to be part of a youthful demographic, and will be keen to be involved in fashion – and one way of giving them a sense of this is to make them the centre of a would-be catwalk shoot.” 

By implementing exciting technology, brick-and-mortar stores are able to combine the best of both the online and offline worlds. For example, House of Fraser implemented iBeacon technology in the mannequins in its Aberdeen store in Scotland. 

 The technology made the shop displays instantly shoppable – the beacons sent passers-by information about the clothes mannequins were wearing, including where they could locate them in-store. 

 With 58% of people wanting to get in-store product information via technology while they’re browsing, there’s clearly a desire for as much information as possible when shopping in real life. While we have information at our fingertips while shopping online, offline we need access to it – and this use of beacon technology lets that happen. 

Blending the physical world with the digital, beacon technology is being adopted in many stores

But what about people that aren’t bothered about a shopping experience, but just want convenience? Why would they leave the comfort of their sofas to venture out to a brick-and-mortar store? “A major part of the answer to this is leisure,” says Ryan. “Visitors to the UK’s two most successful shopping centres, Westfield London and Westfield Stratford, go to these destination malls for the simple reason that they are about more than shopping.” 

As Ryan explains, “the point about places like Westfield London is that when you’ve had enough of the shopping there’s the eating, ranging from Italian to Indian, Lebanese to fish and chips, albeit the latter is upscale.” Rather than antiquated food courts – a lonely McDonalds sat next to a Spud-u-Like – Westfield has created a real 

 for people to relax. “The space that has been dedicated to sitting down has more in common with restaurants than the shopping centre ‘food courts’ of old,” says Ryan. 

Westfield provides a combination of middle and higher-end retailers, real space to eat food that doesn’t feel like you’re at a mall, as well as a multiplex cinema and a forthcoming £20 million mini-city children’s entertainment zone called Kidzania that’s set to open in 2015. 

 “The best and most high profile shopping centres and developments are now focused as much on leisure as they are on playing host to glittering shops,” says Ryan, “and this is something that cannot be replicated online, at least not currently.” 

For many people, in-store experiences are very important – setting it apart from e-commerce

Could the products being purchased have a real effect on whether someone wants to buy online or offline? The UCAS study into the shopping habits of UK students found that online clothes shopping was less popular than brick-and-mortar, but 73% buy music online, compared to just 9% on the high street. As goods and services move to digital and intangible mediums – like music and film streaming – these become intrinsically linked with shopping online. Tangible things, like clothes or food, remain firmly rooted in the world of brick-and-mortar stores.

As for technology, “shopper perceptions of what they need are changing, as are retailers’ attempts to deal with this,” says Ryan. He predicts that though some shops have embraced highly technological flagships, there’s a chance there could be a backlash to this. “There is a high degree of likelihood that stores that once boasted multiple touchscreens will gradually become less high-tech in appearance,” Ryan cautions. There is a fine line between authentically exciting shopping experiences and technological overkill. “If shoppers head for the shops for ‘experience’, then this is not going to be provided by computer-driven devices that are in place solely to offer access to the broader world of the net,” he says. “Most consumers can do this via their phones – and rather more efficiently.” 

For the great bulk of consumers, shopping remains a matter of getting up close and personal with the merchandise

So perhaps the future lies in the implementation of the ‘best bits’ of online shopping successfully into the offline world. “For the great bulk of consumers, shopping remains a matter of getting up close and personal with the merchandise,” says Ryan. “People want shops, shopping centres and high streets to provide what the internet doesn’t – but it needs to be implemented as part of a broader multi-channel picture.” 

Ibrahim believes that with the developments in seamless payments, staff will no longer be chained to the till. Instead, they’ll be able to “take money from customers anywhere in the store” – and as a result, the role of ‘shop assistant’ will change, because they can be out amongst the stock. To keep up with customers who have researched for hours, online training will be vital to help them adapt to their new role. “They already see their customers becoming increasingly knowledgeable about products and services with greater access to info, so they will need to know how to host these customers,” says Ibrahim. 

Brick-and-mortar stores will remain a mainstay as long as they understand the expectations and needs of their customers, says Ryan. They need to embrace online shopping, and give levels of service that only a human touch can provide.

: Disappearing distinctions between online and offline.

: Wanting to know more about what you’re consuming.

Gen Y (born 1982-1996)

Eastern Europe

United Kingdom

North America

United States

Communications

Shopping

Resale and online marketplaces

‘Online and upward: UK internet shopping hits record high’, The Guardian

‘U.S. teens still prefer shopping offline’, Mashable

‘High Street beats e-commerce as 70% students buy clothes in store finds UCAS’, The Drum

Interview with John Ryan conducted by author

‘Birchbox launches its first permanent brick-and-mortar store’, Fashionista

‘Birchbox goes bricks and mortar’, Canvas8

‘Marketing to make men spend’, Canvas8

‘Amazon to open first bricks and mortar store’, Wall Street Journal

‘Click-and-collect is the new shopping standard’, Canvas8

‘Retail reloaded’, Visitors

‘H&M And Lady Gaga Open Epic H&M Store In Times Square’, PR Newswire

‘House of Fraser’s beacon mannequins’, Canvas8

‘House of Fraser introduces beacon technology to mannequins’, Marketing Week

‘Augmented reality makes shopping more personal’, IBM Research

‘KidZania: New £20m ‘mini city’ inside Westfield’, The Evening Standard

Has e-commerce killed the high street? Online sales are rising, but 70% of UK students still prefer brick-and-mortar stores. The issue is confused. In an attempt to crack it, we sat down with retail expert John Ryan to ask how and why stores can retain their custom.

Shopping in the smartphone age

Self-service: leaving shoppers to their own devices

Amazon Fire Phone: a department store in your pocket

Students prefer offline clothes shopping

Amazon Dash: the connected future of shopping?

The fitting room that takes selfies

AR offers a better store experience

Amazon set to open a real-world store