Retailers last year found what had been missing from their stores for several seasons — crowds of shoppers.

 
And according to the industry experts, the migration back is real, sustainable and not just a knee-jerk response to the pandemic-induced stay-at-home lifestyle or prosaic e-commerce interactions.

 
They see it boiling down to retailers adding services, amenities, conveniences, incentives and enhanced merchandising that reflects local preferences, sourcing with some social and environmental responsibility and offering exclusives.

 
U.S. retailers such as Macy’s, Bloomingdale’s, Kohl’s, Walgreens, Sam’s Clubs and Target have been creating smaller, easier-to-navigate formats and adding experiences for an element of “retail theater,” be it fashion shows, cooking demonstrations, book signings or parties supporting charities. Le Bon Marche in Paris, which is owned by LVMH Moët Hennessy Louis Vuitton, took the “retail theater” concept even further over the holidays, hosting theatrical performances in the store after hours that portrayed its history. The performances were completely sold out.

 
The idea is to make shopping more efficient, distinctive and fun, and retailers worldwide have implemented procedures that reduce the risk of contracting COVID-19, while providing different payment options and more attractive loyalty programs.

 
In 2022, consumers in the U.S. and Europe demonstrated an eagerness to get out of the house and reconnect with humanity, after being cooped up inside for two years due to COVID-19. That has benefited brick-and-mortar retailing and quelled years of pontification by the pundits that the physical retail channel was antiquated.

 
“The overall trend that people want to be back in stores is here to stay,” said R.J. Hottovy, head of analytical research at Placer.ai, which provides location analytics and counts traffic to help retailers understand shopping trends and the impact of promotions and events. “Many retailers have been changing the experience, using smaller format stores, and have learned much because of the pandemic. They’ve made a lot of changes to their formats to make the shopping more rewarding, improving the experience and doing a good job at identifying what consumers are looking for. They are making it more fun, improving the decor, improving the product. I see a lot of cases of this. Macy’s, Target, Ulta, Nordstrom — they’ve added buy online, pick up in store, more localizing, food, coffee, payment options, ways that add up to creating more loyal customers.”

 
According to Hottovy, dwell times at grocery and department stores in the U.S. have been creeping up, partly because of innovations by the retailers and partly because people are price shopping more and there’s less labor in the stores to help shoppers find what they want.

 
Hottovy suggested that in a physical store, shopping across categories, particularly those adjacent or within the line of sight of each other, is more likely than on a website. At big warehouse stores and discounters, such as Costco, Walmart or T.J. Maxx, it’s typical for shoppers to walk in with a shopping list and walk out having purchased many more items than those on the list. That’s less likely to happen online.

 
Due to COVID-19, millions of consumers avoided stores, but the numbers of those still reluctant to shop in stores is dwindling, according to Prosper Insights & Analytics, which conducted a survey from Dec. 1 to 7 of 7,857 U.S. consumers age 18 and older. The survey found that at the beginning of 2022, 39.3 percent of Americans were shopping stores less due to COVID-19. But by December, 30.8 percent of Americans were reluctant to shop stores due to the virus.

 
Prosper Insights & Analytics also concluded that shopping behavior is tipping more to stores for fashion, and less to online, where commodity shopping stays robust.

 
On the migration back to stores, “I don’t think it’s a knee-jerk reaction. I think it’s a combination of factors,” said Phil Rist, executive vice president of strategic initiatives for Prosper Insights & Analytics. “During the pandemic, everybody got shut down and were told you can’t go out, or if you do, you need to wear a mask.”

 
But restrictions last year eased with the pandemic becoming less lethal, though it’s still highly contagious. “People are not as fearful. People want to be with people. They’re not robots,” Rist said. With the onset of the holiday season, the desire to leave home, travel, and be with family and friends — as well as shop in stores for gifts — got stronger.

 
“In-store will always be the predominant channel for retailers. Consumers not only want to touch and feel a product, but there is a sense of excitement around going into a store and getting a great experience,” said Nitin Mangtani, chief executive officer and founder of PredictSpring, an omnichannel platform for comprehensive POS including cash management, clienteling, endless aisle for product look up and curbside pickup. The company has Steve Madden, Movado, Lovesac, Vineyard Vines, Cole Haan and Calvin Klein among its clients.

 
“That said, there is now an opportunity for retailers to incorporate all of the digital experiences consumers enjoyed online over the last two years into the store,” Mangtani added. “It’s no longer about online versus physical stores. It’s about the customer journey crossing channels and commerce everywhere.”

 
Asked what malls and stores must do to keep attracting shoppers in light of spending shifting more toward experiences and less on stuff, Mangtani replied: “Providing a seamless shopping experience across channels will help retailers stay ahead of consumer expectations and attract more sales. Retailers that continue to separate online and offline into two different technology stacks will lose out on attracting customers.” A retail experience “that’s consistent across touchpoints, no matter the channel” is necessary, he stressed.

 
“There’s probably a little bit of both scenarios at play here,” said Brent Hollowell, chief marketing officer at Volumental, which provides in-store 3D foot scanning to recommend better fitting shoes. “Certainly people felt a bit trapped at home and were always bound to return to in-person shopping at some level and we’ve seen that play out. It’s also fair to say that the rate of e-commerce growth we saw when there were no other options was not sustainable.

 
“People learned a lot about the relative ease of buying bulk commodity items online and those categories may not see in-store purchasing go back to pre-pandemic levels,” Hollowell said. “But there are some categories like footwear, apparel and several others that a lot of people think are just more fun, and convenient, to shop for in-person. That’s where brick-and-mortar has real opportunities, as long as they ensure that there’s something in it for the shoppers. More personalized services, better in-store experiences or more curated assortments will all draw in and excite shoppers. Subpar in-store experiences will drive some customers back online, or toward competitors who are investing in the experiential side of retail. Now is the time for stores to double down on making their case for why someone should leave the comforts of home to go out and shop in physical stores.

 
“Malls and retailers have invested loads into what I would call ‘gimmicky’ or ‘one-hit wonder’ types of experiences that people try once and then they turn into dusty corners of the store or the mall very quickly,” Hollowell added. “For malls, things that can be refreshed often, like live music venues in center courts, better diversity in food choices and the like tend to draw people in repeatedly over time. And for stores, integrating technologies that make shopping either more fun — like gamification or delivering useful information — or more convenient, like ‘just walk out’ checkout systems or virtual dressing rooms, are the kinds of things that add value for both shoppers and the retailers.”

 
“It’s hard to forecast the future, but certainly what we are seeing is really positive for the retail landscape. People are seeking experiences and ones that they can share, and that’s something they find in retail environments,” said Maggie Smith, senior vice president of marketing at WS Development, whose portfolio includes such properties as the Boston Seaport; The Royal Poinciana Plaza in Palm Beach, Florida; The Derby Shops in Hingham, Massachusetts, and Hyde Park Village in Tampa, Florida. “Brands need to deliver more than just a channel for selling. Retail experiences have become so much more engaging, multisensory,” Smith said.

 
In terms of traffic, “Most of our centers have rebounded to 2019 levels, or in many cases exceeded,” Smith said. “In November, the Boston Seaport was 20 percent above 2019. Many brands are taking it upon themselves to deliver new and more immersive experiences. It’s also in the way we partner with the stores and brands,” like having a local artist visit a global brand to create a high-touch experience by doing custom work on an apparel item, or setting up Santa experiences in restaurants.

 
Alo, the yoga clothes brand, hosted a “sip and strut” event surrounding its November opening. More than 200 attendees strapped on ankle weights and joined in a two-mile walk around Boston’s Seaport district before returning to the store for a shopping party with cotton candy, acai bowls, brow threading and giveaways. Kiton staged a spring 2023 runway show at The Royal Poinciana Plaza. For some “high” drama, the Red Bull Cliff Diving World Series returned to Seaport last summer, where the world’s best cliff divers twisted and somersaulted from heights of 70 to 90 feet off the Institute of Contemporary Art into Boston Harbor.

 
Consumers, said Smith, are “desperate” for new experiences and things to do. “WS always puts a focus on a more experiential mix,” which beside the high-diving, means food and beverage offerings, services and fitness, as well as offering the expected assortment of hard and soft goods.

 
Asked how traffic has been at the Boston Seaport, Smith said, “Our retailers are all reporting they were given aggressive goals and for the most part are meeting them. The general sentiment is that traffic is wonderful and people are ready to spend.”

 
At Manhattan West, the new mixed-use complex set between Ninth and Tenth Avenues and 31st and 33rd Streets in New York City, “We made a very conscious decision to have our merchandising be lifestyle and wellness-oriented, and have very strong food and beverage offerings,” said Jason Maurer, executive vice president of national urban retail for Brookfield Properties, developer of Manhattan West. “People really value taking care of themselves and spending time on personal improvement.”

 
Manhattan West’s tenants include Peloton, Peachy skin care studio and soon-to-open Therabody for fitness product. There’s also a Whole Foods; the Katsuya sushi restaurant; the Chez Zou cocktail lounge; the Mediterranean-style Casa Dani restaurant; a dash of fashion with Rothmans, Public Rec and The NHL Store; the Midnight Theater with live performances ranging from jazz to drag, and a skating rink, which partners with the New York Rangers to host a youth hockey school.

 
“It’s a pretty unique mix with experiences that can only be done in person and not online,” Maurer said. “Effectively, we have zero retail vacancy — 237,000 of our 240,000 square feet of retail and restaurant space is leased.”

 
At the Brookfield Place retail, restaurant and office development in lower Manhattan, there’s been some recent re-tenanting to bring in additional service and personal care type businesses, including the Plaza M spa for nail care, waxing, lash extension and massage; the Adam Grooming Atelier for men; the Clean Market for cryotherapy, infrared sauna and IV drips, and the Big & Tiny nursery and pre-school. The strategy is to closely cater to the office and residential populations in the area.

 
“This is not coming at the expense of our soft goods offerings,” Maurer said. “Traditional brick-and-mortar retail has performed extraordinarily well. We already have an incredibly robust food program,” with the Le District French marketplace, Sant Ambroeus, and P.J. Clarke’s, among other dining options.

 
With Americans getting out more to shop, “brands are putting emphasis on brick-and-mortar expansion. We see a great deal of engagement by our retail partners,” Maurer said. “They’re creating unique experiences. There’s also a tremendous amount of time and energy put forth in design.”

 
Top 10 Reasons for Shopping in Stores Versus Online

 
1.To see, feel or smell the actual product, not a virtual one. What you see is what you get.

 
2. Immediate gratification of having something in your possession right away.

 
3. To meet up with friends or family in the mall and make a day out of it.

 
4. Finding richer brand experiences.

 
5. To get out of the house.

 
6. Reconnecting with familiar sales people and stylists.

 
7. Returns less likely; no risk of wrong items getting delivered or packages stolen from outside your door.

 
8. You can still use your cell phone to price compare and find deals online.

 
9. Retailers are better equipped to reduce health risks associated with COVID-19.

 
10. There are better opportunities to negotiate prices in stores with live associates.

 
By David Moin

 
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