The impact of the pandemic to brick-and-mortar was immediately felt, with over 8,000 US stores closed in 2020 and 10,000 more predicted to close in 2021. Many retailers were catapulted by necessity toward digital transformation as they raced to catch up to the speed of the customer.
When I started my career in ecommerce in 2009, online revenue was only 8% of total sales and small beans in comparison to the traffic and sales driven from physical stores. Fast forward to 2020, and even with a pandemic that prompted consumers and businesses to focus online, U.S. ecommerce sales were still only 14% of total retail sales for the year.
And now, as rent prices are down and premium storefront locations are available, the brick-and-mortar brands that got it right are growing their footprints again. The goal for 2021 and beyond will be to combine their newfound digital capabilities with a refocus on the store experience — new concepts and all.
A recent study by Sailthru ranked retailers based on their customer experience attributes and weighted them against consumer satisfaction survey data that ranks companies based on how well they pivoted and personalized their marketing efforts last year. This is how brick-and-mortar retailers fared, proving it is possible to balance ecommerce excellence with in-store sophistication.
Brick-and-Mortar Retailers That Won 2020
The Retail Personalization Index tracked 260 brands, asking 5,000 consumers about their shopping experiences with those brands, and then did a deep-dive customer experience analysis across mobile, email, website and other channels to determine which companies deliver the best personalized customer experience overall. Happily, brick-and-mortar brands represented very well in the top 100. In fact, Sephora ranked #1 for the fourth year in a row, while other big offline brands like Best Buy and Bloomingdale’s made big jumps this year.
Brick-and-mortar brands, more than online-only brands, had to make major pivots to satisfy ecommerce shoppers during the pandemic, and many were well positioned to do so. Here are the B&M brands that did best:
- Sephora: This beauty brand has been at the top of its game and has consistently focused on leveling up personalization efforts within its omnichannel experience. The retailer offers 1:1 virtual consultations and a loyalty program to engage and retain its best customers.
- Best Buy: The tech retail superstore’s quick pivots toward creating a seamless curbside pickup experience across mobile app and website were best-in-class, and its laser focus on customer satisfaction make it well positioned to continue growing.
- Bloomingdale’s: Department stores were among the sectors most heavily impacted by the pandemic, with many store closures across the country. Through seamless interactions across channels, Bloomingdale’s showcased the value of highly engaged, service-driven shopping experiences.
- Nordstrom: Known for its customer experience, the brand made curbside pickup and virtual services core elements to attract and engage new shoppers going forward.
- Office Depot OfficeMax: The company is smartly tuned into the trends surrounding the future of work, and plans to continue making ecommerce and innovation a priority. Notably, they have already reported a 20% increase in YOY online sales as a result of their efforts.
- The Home Depot: The world’s largest home improvement retailer experienced high growth last year due to at-home lifestyles and by focusing on customers no matter how or where they shop. They capture customer preference through a robust preference center that allows for relevant and personalized communications.
Thinking Ahead to 2H 2021 for Brick-and-Mortar
Brick-and-mortar locations will unfortunately continue to close coming out of the pandemic, but sales from physical retail are projected to represent 82.3% of total retail in 2022. Brands can use the digital capabilities they honed in 2020 to drive even better omnichannel and in-store experiences.
In order to improve fulfillment speed and compete with supply chain leaders like Amazon, stores can reallocate square footage within stores toward housing inventory, to manage increased ship-from-store orders and returns. Digital solutions like in-store and remote customer service, QR code scan wish list-add capability, virtual dressing rooms and contactless checkout can provide a blended online and offline shopping experience. Retailers can localize stores by use of customer data to inform in-store product assortment, and personalized marketing that ties the brand to the shopper and the community.
While there is a light at the end of the tunnel, what is clear is that the last 12 months have prepared retail marketers to be nimble for quick pivots as they arise. At the core of that strategy is the collection of consumer behavior and data to positively impact the overall experience. Retailers that focus on delivering consistent and relevant marketing across online and offline have and will continue to come out on top, especially as we come out of the most trying time of this pandemic.
Monica Deretich is Retail Advisor to Sailthru. She is a proven leader specializing in strategic data-driven marketing, focusing on the customer experience within B2C ecommerce. Deretich brings over a decade of experience focusing on CRM, including specialization within email, mobile, SMS, social media, retargeting and direct mail marketing. Her expertise and passion for personalization is centered around the idea of having a 1:1 dialogue with consumers, believing it is the key to increasing both engagement and lifetime value. She began with positions in email marketing and CRM at Hot Topic before joining TechStyle Fashion Group as VP of Marketing & CRM for JustFab. Currently consulting, Deretich seeks to help brands create and maintain relationships with their consumers through personalized customer journey experiences.