Brick and Mortar Retail is Making a Comeback

We’ve seen the rise of e-commerce and third-party delivery services even before the COVID-19 pandemic. But these longer-term trends significantly accelerated in 2020, when people were forced to stay home for their health, and businesses scrambled to pivot to new formats (such as delivery and drive-through). These COVID-related changes seemed to paint a bleak picture for brick and mortar retail, but now, in 2022, we are seeing bright spots for the local businesses we know and love.

Nearly half of consumers in a recent survey say that in the last year, having a physical retail space has had a “significant” or “very significant” influence on which brands they have chosen to buy from. That’s half of all consumers… mid-pandemic! And it’s a preference that business owners are hoping to take advantage of. That same survey found that 32% of brands plan to establish or expand their pop-up or physical retail experiences in 2022, and 31% of brands say they will also expand their footprint.

And it seems like the comeback of brick and mortar may be here to stay. The National Retail Federation predicts that more than 72% of U.S. retail sales will still happen in-store in 2024. 

As shoppers become more comfortable with our “new normal” following the COVID-19 pandemic, retailers are able to focus once again on the in-store experience. They are easing up on third-party delivery, investing in interactive storefronts, and prioritizing convenience.  

In this article, we’ll discuss the most promising trends in retail and how to take advantage of them.

What the Future of Brick and Mortar Looks Like

Consumer spending across retail categories is expected to soar in 2022. Pandemic shutdowns and social distancing measures have allowed shoppers to build up their savings, as well as their desire to get out in their neighborhoods, travel, and shop. To prepare for the surge in spend, retailers are embracing multichannel strategies that bring more customers in-store.

Omnichannel Customer Acquisition Strategies

The biggest and most promising change coming to brick and mortar retail involves an omnichannel acquisition strategy called "clicks-to-bricks.” It combines the strengths of online customer acquisition with the upsell opportunities of the “real world” by starting the buyer’s journey online and then bringing them in-store for their purchase or for item pick-up. 

Essentially, clicks-to-bricks is about meeting customers where they already are: online, on their mobile phones, and on-the-go.

First, retailers post information on an online platform — whether it’s their own website or an established marketplace — to provide online shoppers with insight into what makes that retailer or their products so unique. That content can come in any form, whether it’s an online catalog, blog article, video, or live-stream. 

Then, retailers introduce a monetary or experiential incentive to motivate those customers to finalize their purchase in-store. When customers finally venture in-store, retailers have the opportunity to build trust and upsell. The best way to do both is with compelling (but profitable) promotions and a best-in-class customer experience. 

With online customer acquisition costs on the rise, this kind of programming allows retailers to substantially reduce the money they spend with high-fee, third-party marketing channels while still attracting higher volumes of local customers in-store.

A Focus on Interactive In-store Customer Experiences

Commercial real estate vacancies spiked when shutdowns and social distancing forced retailers nationwide to close their doors. Initially, this meant that retailers could shift the funds they were spending on fixed costs (like staff wages) over to acquisition-focused digital channels like Facebook, Instagram, and Google. 

But the costs associated with these digital channels have only continued to rise, and now exceed whatever most retailers were spending on the fixed costs related to maintaining their physical retail spaces. 

Between rising digital costs and the revived demand for in-store experiences, digital brands no longer have a guaranteed leg up.

Larger retailers have taken advantage of widespread vacancies either to invest in creating a one-of-a-kind in-store experience, or to turn store fronts into distribution hubs for convenient last-mile delivery vendors. For example, Dick’s Sporting Goods invested in interactive features like batting cages, rock climbing walls, and putting greens to attract new customers. Target, on the other hand, pivoted to distribution. They adapted storefronts to also act as micro-fulfillment centers, which met demand for same-day pick-ups and reduced shipping costs by ~40%.  

But that doesn't mean all retailers need to dedicate an entire storefront to a rock climbing wall in order to attract customers in 2022.

No matter the budget or square footage, small- and medium-sized retailers can still take meaningful action to make their in-store experience more interactive and convenient for customers. 

Start with a small space in your store and make a compelling display. Here a few ways you could impress shoppers and passersby with a display:

  • Use your windows for a holiday display. Create a local photo-op by partnering with a local artist. Have them paint your windows or erect a thematic 3D installation. People love to support their local creatives, so make room on your window for the artist’s signature and social media handle. Promote your social media accounts next to your display with a QR code
  • Construct a sensory-rich seasonal display in a high-traffic area of your store. Play to your customers’ senses with seasonal reed diffusers, textured decorations, and music. You can also direct your shoppers’ attention to limited-time seasonal goods with lights or projectors. 

Create a contest display. Equip this station with pens, paper, and a lockable bin so customers can submit their answers. Or, better yet, invite customers to follow a QR code to your contest’s social media post. Ask your shoppers to submit a caption for an image, solve a riddle, finish a scavenger hunt, or guess how many candies are in a jar.


A Revival for Malls

Believe it or not, malls are experiencing more foot traffic today than they did pre-pandemic. They provide a convenient one-stop, quick-service option for non-food needs; as a result, mall real estate is on track to break a 10-year leasing record. 

In this new race to secure retail space — specifically open-air spaces — many smaller businesses are pursuing pop-ups and space-sharing partnerships as a work-around for rising real estate costs. More on that in the next section. 

Not only is mall space relevant for retailers using a clicks-to-bricks acquisition strategy–but also to serve wandering shoppers eager to get back out into their neighborhoods and to discover new businesses.

More Pop-Up Experiences  

Retail pop-ups ignite the kind of interest that plays well into clicks-to-bricks acquisition strategies. Customers hear about the pop-up online or through friends, and its short-lived nature drums up excitement and brings customers in-store. 

Pop-ups don’t have to be extravagant, though some certainly are! For example, Gucci and Dolce and Gabbana pop-ups followed wealthy New Yorkers out to the Hamptons at the height of the pandemic. The more manageable pop-ups that small- and medium-sized retailers are hosting convert vacant spaces like parking lots into open-air shopping experiences with Instagrammable decor.  

Future-Proof Your Business  

As consumers are coming back in-store, retailers everywhere are evaluating the best way to get started with a clicks-to-bricks strategy. Not only that, but they’re auditing their current expenses so they only invest in the most profitable acquisition channels.  

Upside is the easiest tool helping brick and mortar retailers gain more market share - and the only one that guarantees new profit. The platform is specifically designed to help retailers find the new customers they’re looking for—online and on-the-go—and direct them in-store. Our personalized and profitable cash-back promotions are proven to bring nearby customers to you instead of your competitors - with absolutely no IT integration or upgrades, staff training, or in-store signage required. 

Upside merchants see: 

  • ~1% sales lift for our most engaged grocery retailer partners
  • 4-7% lift in volume for fuel retailers
  • 2-3x increase in avg. spending per customer for restaurant retailers

And with Upside, local business comes first; we don’t earn a cent until your customer earns cash back and your business earns measurable profit.  

Now that you know more about the brick & mortar revival, let Upside profitably guide these new customers into your store.

Get in touch today!