Online obviously has an impact on the physical store network but this impact did not have the initially expected scope. The physical store network will continue to have its place among the other sales channels. However physical stores will have to undergo a few transformations, as a result of the effects of online sales. But which effects can we expect to see? How does the online channel influence the physical store and vice versa?

The dynamics between the online shop and physical stores cannot be described in one specific manner. In this post, we will discuss four ways in which consumers combine online shopping with shopping in a physical point of sale for their purchases.

1. The offline showroom

Retailers feared this phenomenon the most from the outset. A customer prefers online shopping over offline shopping. As a result, physical stores lose revenue. Consumers use the physical shop as a showroom to browse for products or try them on and request product advice. Ultimately, however, they place their order online, in some cases even ordering from a competitor. Consumers mainly do this when they are convinced that they are cheaper off with an online purchase.

Many retailers try to respond to this trend with dynamic pricing. Prices are adapted daily based on a comparison with the competition. This is retailers’ way of convincing consumers to not leave the shop without a purchase.

In addition, retailers also increasingly often offer product services, thereby giving consumers more reasons to prefer the physical shop over the online store. One asset that is often touted in this frame is the added value of human interaction. Training shop assistants to be real specialists in their trade so they can give consumers custom advice will ultimately become a real priority.

2. The online showroom

This is a trend that retailers did not expect, namely consumers browsing the online store to check a retailer’s range and then make a purchase in a physical shop. This is happening increasingly often, however. A survey by PWC revealed that 70% of the respondents consciously used the online store as a showroom before making their offline purchase. In addition to this, 68% of the respondents indicated that they had already engaged in “offline showrooming”.

The online showroom is less detrimental to physical retailers than the offline showroom. All consumers do is prepare for their shopping trip.

3. Pick-up in store

In the third case, the shop’s function changes. It becomes a place where you pick up goods. Customers order their goods online, collect their goods and return any goods that are not satisfactory. Contrary to what most people think, this is not a bad development for a shop. Research we conducted among various retailers showed that online ordering, combined with the in-store collection, increases the retailer’s revenue. The retailer’s market share in the immediate vicinity of the shop increases because of online order and pick-up-in-store options.  

4. Online as an additional home shop

A fourth option is online order and delivery. Customers order their purchases online and have their orders delivered to their home. In that case, the physical shop no longer intervenes on any level, except if you choose to return the products you ordered through the offline shop. The shop’s function is thus often reduced to a place to return goods. Research among various retailers has shown that online ordering and home delivery can be complementary: this creates more reach in regions where the retailer has no physical points of sale.