Online retail is fast becoming an entrenched consumer habit for Australian shoppers. The convenience of being able to make purchases from home and have goods delivered directly to their door is why more people are choosing to avoid the perceived inconvenience of shopping at physical stores.
However, if a customer needs something urgently, customers still look to traditional bricks and mortar retail stores to make their purchases.
Recent research by two marketing professors discovered valuable information about how physical stores are thriving in a retail environment where customers have more options on how to buy.
Over a period of almost six years, the researchers analysed data from a well-known catalogue and online retailer, which during this time opened three physical stores. They also scrutinised the customer transactions of frequent shoppers within a 30 mile radius of each new physical store to better understand the orders, returns and exchanges trends of the retailer.
In the end, the study found that when a new physical store was opened, customers made more frequent purchases overall, and the company’s net revenue increased by 20 per cent.
This even took into account a greater quantity of returned and exchanged merchandise due to the convenience of having a store nearby.
Adding a physical store was also found to increase customer-firm contact, which meant better customer retention rates. Shopping transaction sizes also remained the same when people were able to shop close by.
Opening a retail store also did not affect the amount of internet purchases that were made. However, catalogue purchases were found to decrease, but this was partially attributed to a general decline in this type of shopping experience.
Whether physical stores or online, retailers of any kind should always be looking for ways to improve their business. Having a form of specialised accounting software can help companies in retail better manage their stock and also their customers.
