September 2023

The State of In-Store Retail

The highly publicized rebirth of in-store shopping isn’t a joke. Here’s what we learned from visiting 18 shopping destinations in 6 states during Back to School season.

Let’s start here:

Have you been to the mall lately? We have, and today we’re gonna tell you what we learned.

In her excellent book Meet Me By The Fountain, Alexandra Lange posits that “at their best, malls create community through shared experience (Thrills! Tastes! Tunes!).” But capitalism commercialized the core of that community, and by 2010, there were almost 108,000 malls & shopping centers offering the 3 Ts and more across the US. By 2015, economists were calling the country “extremely over-retailed” and ringing alarm bells that were largely snooze-buttoned. Then the pandemic hit, accelerating the already snowballing downturn for physical retail. Many malls started to lack the retail anchors of the past, people were now saying they prefer shopping online, and as we’ve discussed before, the traditional purchase funnel was in the process of completely disappearing. Things were pretty doom and gloom, but with nowhere to go but up, corporations that own malls and shopping centers were now more open than ever to trying something new.

Arrive a few minutes before opening at a mall today and you may find seniors walking the halls for exercise, slowly being passed by new parents with strollers. New types of anchor stores are delivering the thrills. Some malls are even changing their name to shift perception and better reflect the totality of what they offer. And the spaces themselves aren’t alone. Together with their landlords, brands have spent the last 2+ years looking for a way to rejuvenate their individual retail footprints as well.

In recent months, there has been increasing cautious optimism that these combined efforts, while belated, are beginning to work. Some classic “mall” brands are reporting that traffic & sales are up. Celebrity-backed businesses and corporations owning malls are back in (albeit still hesitant). Malls (and the broader experience of physically shopping in a store) are being heaped with praise (and even acting as the setting for the odd podcast). When the President/CEO of P&G is saying things like, “I generally believe the majority of brand choice is made in a retail environment,” then you know conversations are being had at every level. 

But it’s still early days, and there is much more to be learned about what shoppers really want when they walk through the doors of a store today. So with that in mind, last month Quick Study packed our bags and shopped our way across the USA. We visited an assortment of 18 malls & shopping centers of varying popularity across 6 states, mixing city centers and suburbs as well as flagships & outlets. We walked the aisles, talked to customers & employees, and ate at several food courts (& one Cheesecake Factory). Our goal was to experience the state of retail at its most basic level so that we could better understand what it will take for brands to be relevant in the space moving forward. Today, we’re excited to share four key learnings from our research.

No matter the state, parking lots tend to look the same.

Ease is the great equalizer.

We’ve previously discussed how important ease & convenience are to today’s consumer, but it becomes even more important if someone is considering making the effort to physically go to a space you operate. As Publicis Sapient noted in their 2023 Retail Guide, “Now that online shopping has brought new expectations of convenience, the next era of in-store retail has a higher standard to meet.” But it’s important to remember that not only is the internet a competitor for the in-store experience today, but so is anyone selling similar products near you physically. 

The majority of shoppers we spoke to in stores were mission based; they came to the store with an idea of at least one specific product (name, SKU, etc) or type of product (“workout clothes”, “pants for work”, etc) in mind. They often had a picture or link to that item on their phone. Once in the store and looking around, they sometimes found other things they like, but the impetus for the visit itself was usually sparked, not happenstance. If the store had the item that sparked their visit, great! If not, the store was in trouble. Shoppers were unafraid to walk down the hall or across the parking lot to similar retailers if they had a specific item in mind that they wanted ASAP, sometimes even opting for a different brand or product than what they initially wanted in lieu of visiting another brand location further away or ordering the exact thing they wanted online through an employee.

Additional quantitative research confirmed that elements of convenience and ease are high on the priority list for most shoppers in the US today. We used survey platform OnePulse to ask 800 retail shoppers in the US age 16-54 about their habits when it comes to in-store purchasing. At one point we specifically asked them to describe the experiences they love at stores in 3 words or less. Easy was the number one word used by respondents, and convenient came in 5th.

To build on our learnings, take a look at the top 10 most important things Americans cared about when it came to shopping in-store in Q2 of 2023 according to GlobalWebIndex (GWI):

  1. Availability of products

  2. Clean/tidy store

  3. Items on sale

  4. Good customer service

  5. Convenient location

  6. Friendly service

  7. Well laid-out store

  8. Coupons

  9. Special offers (eg BOGO)

  10. Good restrooms

You could easily say 4 of the top 10 on that list are related to the ease and convenience of the shopping experience, and probably throw in both customer service responses as well due to their responsibility in making a store visit easy/convenient. That’s 6 of the top 10 in-store purchase influencers right there (7 if you’re feeling like proximity to a pee break is an important convenience). All in all, if you aren’t thinking about how to create a smoother shopping experience, you are missing the foundation of retail success. Everything else about your in-store experience could be great, but if people can’t get their hands on the thing they want easily that sale may be going elsewhere.

In most cases, finding a similar product to the one you don’t have is as easy as walking next door or across the parking lot. (Canva, Text-to-Image AI: “a well-lit photo of the back of a man leaving a store in a mall and turning into the hallway”)

Your brand story is only as good as the people you hire to share it with others.

The role of the store associate is multifaceted, and we saw throughout our journey that the best associates juggle their many roles with ease. Being able to knowledgeably speak about a product’s RTBs is one thing, but being able to contextualize the product in the world of the consumer takes things to another level. The best employees we met knew what products were trending with which consumers, understood the nuances of fit & sizing, were able to upsell accessories for outfits, and did it all without feeling overbearing or too “on” for the customer. 

As we learned above, good and friendly customer service both rank in the top 10 most important things Americans care about when it comes to shopping in-store (“good” service in 4th and “friendly” service in 6th). But as retail in general has declined over the past few years, so too has the shine of working in it, creating labor shortages and other complications that led Vox last month to declare “stores sucked the fun out of an American pastime” (the pastime being shopping).

We heard in so many of our conversations with customers how important the right level of service is. And when we say “right level,” it’s important to point out that the right level of service is completely individual. To illustrate that point, according to GWI, a quarter of Americans say that limited interactions with employees is “important” to them, but nearly 70% of those who want limited interactions also still say good customer service is important. We definitely saw some of this shopper out and about in August, and many of them have helpfully sorted a way to signal to staff they don’t need to chit chat: they wear headphones until they have a question or need assistance.

One oft-overlooked — and more difficult to quantify — aspect of the in-store associate is their ability to set the tone for style & fits. The well-documented and rightly-criticized Abercrombie model of casting hot people seen in the mall and employing them to stand front-of-store is an extreme one, but it was borne out of the truth that retail employees can be models for your products, helping to bring the story off the rack and into reality for customers. Square footage is limited, and updating imagery at every store in the US with consistency can be an expensive hassle, so the idea of employees being a living, breathing example of the potential of your products should be an appealing one. At stores we visited where staff were able to express themselves through their apparel, we often heard customers ask about specific products they were wearing or accessories they had. Individual expression sparked conversations that led to bigger purchases.

That point might feel like a no-brainer, but at this moment there is an even greater opportunity to influence trends from within a store than there has been in the last 10-15 years. For the last decade+, the majority of retailers have been in reactive mode, trying to keep up with demand dictated by what’s trending on social media. But today, with fragmentation on social media increasing and people moving towards more personal, smaller-scale sharing, some of the biggest forums and drivers of product conversation are coming under fire. With these digital forums being exposed as easy to hack — or disappearing completely — consumers will need to find inspiration from elsewhere. Why can’t that new source be the brands who know how to tell their story through their employees at the point of sale?

Price is on the agenda for retail shoppers, but too many brands are making it the agenda.

One of the more fascinating interactions retailers are having with shoppers today is around price. As we’ve covered in the past, price is generally not the number one factor that drives someone to purchase a product, especially clothing. For clothing, that honor falls to quality or fit. Consumers tend to look at the 3 (price, quality, fit) as if they are their own version of the “fast, cheap, good” adage - they understand that there is a give & take to the products they want to buy, and that sacrifices must be made somewhere to be happy overall.

For a long time, the factory store or outlet mall was the place where price led the story. Consumers were trained to seek out these types of stores & malls when buying for what they “basics” or for budget reasons. But post-pandemic, in a move to get folks back to in-store shopping and to get a better handle on sudden influxes in inventory, retailers relied on discounts to get consumers to visit any of their locations, not just the ones that had traditionally been known for markdowns. Today, some brands are finally backing off the inundation of deals, and for good reason.

When speaking to shoppers & store managers, we heard over and over again that people have become conditioned to look for markdowns. But, when pressed on their willingness to buy something they like, consumers almost always said they were open to paying full price for the item they had their eye on. In essence, for the right product, price is a perk, not a mandatory.

While consumers say that they are okay to pay full price, they are of course going to continue to look for the best price. According to GWI, nearly 47% of Americans today say they look out for discount codes or coupons, up almost 5% from Q1 2021. The proliferation of tools for online comparison shopping, rebates, and/or points has conditioned shoppers to think this way. 

But if shoppers are already thinking this way, that doesn’t mean stores need to aggressively reinforce it. In fact, it should mean the opposite. When you walk around a mall today and look at how much messaging from store-to-store is about price, it’s easy to see how consumers have become accustomed to getting a certain percent off the top whenever they show up to a store.

It’s that “always-on deal” conditioning that is starting to show lasting effects. When those 800 Americans we surveyed using OnePulse used 3 words to describe stores they love to shop in physically, the 3rd most used word was “affordable” and the 4th most used word was “cheap.” In GWI’s most recent survey of top 10 purchase influencers in-store, “items on sale” was 3.7% higher than it was in Q1 2021, “coupons” was up 2.3% and “special offers” was up 1.7%. If you isolate Gen Z, they say coupons are 3.4% more important than they were back in Q1 2021. These are small upticks for now, but they are also a warning that yelling about a fire sale too often at retail may be the kindling for future retail earnings fires.

When sale is the biggest story your brand is telling, what else will consumers remember about you?

Shopping should feel like fun, not like a chore.

We’ve talked about 4 of the top 5 words people in our survey used to describe the in-store shopping experiences they love, so now let’s talk about the word we haven’t yet: fun. While “fun” came in 2nd in our survey, it’s certainly a bit of a nebulous word to use about shopping, and one that doesn’t clearly show up in research like GWI’s purchase influencers list. We learned during our visits to stores that fun could mean a lot of things to shoppers: good music, high energy staff, a busy store, a wide variety of products, or even a moment of interactivity (just to name a few). 

Look deeper into the vagueness of “fun” and you’ll see that positive emotions around the idea of shopping are an important element that aren’t showing up enough in the current shopping climate. Over the last two years, the percentage of shoppers who say they enjoy browsing for new products has ever so slightly declined from 32.5% to 31.9%, and people who say shopping is one of their interests has also remained stagnant at just below 40%. Today’s shopper simply has more choice than ever when it comes to brands and also when it comes to how they do their shopping. The experience can be stressful — maybe even paralyzing — to indecisive buyers, so amplifying a sense of positive emotion like fun or joy could be a huge differentiator if done correctly. 

For years, everyone talked about how people were choosing experiences over things, but let’s frame it a little differently: when it comes to retail shopping, consumers want things that come from good experiences. Ikea recently learned this when they discovered shoppers actually prefer to be guided through the store versus choosing their own adventure. Being asked to choose a path around an already overwhelming space (even though this was at their smaller urban stores) was adding one decision too many to the plates of Ikea shoppers and taking away from the overall fun of the classic Ikea experience.

There is a caveat to fun that most retailers tend to neglect: Consistent fun is only possible through trust. Consumers need to trust your brand, its products, your employees — whatever it takes to give them the confidence that you are the right choice for the decision they are making. The more they trust your space, the more fun they will have in it.

Canva AI's vision of a really fun mall. (Canva, Text-to-Image AI: “a photo of a really fun mall with people shopping and enjoying themselves”)

Conclusion

In a New York Times story earlier this month dissecting the rise of “girl” trends, Marie Solis wrote that one reason people are so keen to label trends is that it sends a signal to others. “On the internet, where thousands of strangers may be reading one’s missives at any point, it can be useful to make it clear who should be listening,” she wrote. What might it look like to approach the retail experience with the same thinking? How can a brand use all the tools at its disposal to make it clear who should be listening? And what can they do to turn those that are listening into engaged consumers for the long run?

We spoke to dozens of shoppers from all walks of life during our cross-country shopping trip. They all have unique needs and stories that will continue to change over time. But it’s also true that they will always need to shop, and that many still like to buy things in person when the setting is right. As the holiday shopping season approaches, we hope you’ll listen to what they told us.

Every part of the store experience tells shoppers a story about you. What message will they hear if they listen? (Canva, Text-to-Image AI: “a photo from the front of a store looking toward the inside. there are lots of headphones hanging from the product racks”)

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