How Physical Stores Boost Revenue for Digital Stores

In today's retail world, combining physical and digital stores has become a key strategy for businesses to increase their reach and revenue. This approach, known as omnichannel retailing, blends in-store and online shopping to enhance customer engagement and drive sales. In our Customer Centric Retailing Podcast, many retail experts have highlighted the significant impact that physical stores have on boosting digital sales.

In this article, we explore how physical stores help in increasing revenue for digital stores, using examples from industry giants like Target and Walmart, and discuss the various benefits of maintaining a brick-and-mortar presence in a digital age.

What Is Omnichannel Retailing?

Omnichannel retailing is a strategy that combines multiple shopping channels to provide a consistent and smooth customer experience across both online and offline platforms. This model recognizes that today's shoppers often switch between different channels during their buying journey, from researching products online to buying in-store or the other way around. The goal for omnichannel retailers is to create a seamless, unified shopping experience that enhances customer satisfaction and loyalty.

Retailers like Target and Walmart successfully use this approach by leveraging their physical store networks to support and enhance their online operations. These companies have developed advanced systems to synchronize inventory, marketing, and customer service across all channels, ensuring that customers enjoy a smooth shopping experience no matter where they shop.

How Physical Stores Enhance the Success of Digital Stores

1. Enhancing brand visibility and awareness

Opening a physical store can significantly boost both eCommerce and in-store sales. By establishing a presence in a market where digital sales activity already exists, companies can attract local foot traffic while also increasing their online visibility and engagement. A physical store acts as a tool for customer interaction and brand awareness, making physical locations a key hub for enhancing digital marketing efforts.

2. Catering to customer preferences

Some products, such as intimate apparel, benefit greatly from physical stores where customers can touch and feel the products. This tangible experience is crucial in such categories, where the ability to try on items in-person complements the convenience of online shopping. By providing both options, retailers can cater to a broader range of customer preferences that drive overall sales.

3. Long-term benefits

Retailers frequently see that opening brick-and-mortar stores not only generates revenue directly from in-store transactions but also significantly boosts digital sales in the respective region. This is due to increased brand visibility and awareness brought about by the physical presence of stores. Customers who may not visit the store in-person still engage digitally after encountering the brand offline, leading to a broader market reach.

4. Strategic positioning and impulse purchases

Physical stores strategically placed in busy areas, like tourist towns, capitalize on the immediacy of the moment. Visitors, immersed in experiences and less reliant on digital distractions, are drawn in by the awareness of the brand and its offerings. This unique setting fosters organic foot traffic and spontaneous visits, while the online presence serves as a convenient option for repeat customers. This dual approach maximizes opportunities for engagement and sales across both offline and online channels.

5. Dynamic billboards and marketing vehicles

Retail stores serve as dynamic billboards that offer a unique advantage in the eCommerce-driven world. While social media advertising requires multiple impressions to make a connection, physical locations provide immediate, tangible engagement. Stores allow customers to experience a deeper, richer narrative than online platforms can often convey. This creates an immersive experience that enhances the customer journey and builds a strong connection.

More Dynamic Role of Physical Stores

1. Experience centers

Physical stores can act as experience centers where customers can engage with products in a hands-on manner, gaining a deeper understanding and appreciation of the brand. These centers provide an opportunity for customers to interact with knowledgeable staff who can offer personalized recommendations and insights which will help in enhancing the overall buying journey.

2. Building community and loyalty

Physical stores play a crucial role in building community and fostering customer loyalty. By hosting events, workshops, and other in-store activities, retailers can create a sense of community and connection among their customers. This not only enhances customer loyalty but also encourages repeat visits and word-of-mouth referrals.

3. Showcasing innovations

Physical stores offer a platform for retailers to showcase new products and innovations in a tangible way. Customers can see, touch, and try out the latest offerings, which can be more impactful than simply viewing them online. This firsthand experience can drive excitement and interest, leading to increased sales both in-store and online.

How are Retail Giants Leveraging Physical Stores?

1. Target

Target has been a leader in using physical stores to support its online operations. The company has implemented omnichannel strategies, such as BOPIS and Ship-From-Store, which have been crucial in driving online sales. By using its stores as fulfillment centers, Target is able to offer faster delivery options and better manage inventory that ultimately improves the overall customer experience.

2. Walmart

Walmart has also successfully integrated its physical and digital channels to create a smooth shopping journey for its customers. The company's extensive network of stores serves as pickup locations for online orders, making it convenient for customers to collect their purchases. Walmart's use of in-store technology, such as self-checkout kiosks and mobile apps, further bridges the gap between online and offline channels to drive overall sales.

3. Apple

Apple retail stores are iconic examples of how physical locations can enhance brand experience. These stores not only offer a place to purchase products but also serve as educational hubs where customers can learn and try out new offerings from Apple. The knowledgeable staff and immersive environment create a powerful brand experience that extends beyond the physical store that motivates customers to make repeat purchases online.

Conclusion

Integrating physical and digital channels is no longer optional but essential for retailers aiming to thrive in a competitive market. Physical stores play a crucial role in boosting digital sales by enhancing brand visibility, providing tangible experiences, and serving as an advertising tool. Retail giants have shown the value of maintaining a strong physical presence to support and enhance their online operations.

By embracing an omnichannel strategy, retailers can create a smooth, unified shopping experience that meets the evolving needs and preferences of today's shoppers. As the retail industry continues to evolve, the benefits of integrating physical and digital channels will become more evident for driving business growth and success.