ULI Chicago News

Does It Really Matter Where Customers Shop?





Does It Really Matter Where Customers Shop?
By Bridget Lane, Director, Business Districts, Inc.

The headlines about 2017’s all-important holiday sales season have come out and they seem contradictory… Shopping center traffic is up, internet sales break records, 91% of shoppers surveyed by Deloitte plan to shop online, millennial and Gen Z Shoppers are brick-and-mortar’s essential future. What is the truth?

The key to reconciling these headlines is understanding the difference between shopping and buying. Shopping is deciding what to purchase and buying is both a financial transaction and obtaining the item. The transformation of today’s retail is driven by the separation of these two once inseparable concepts. The shopping center once was king, as it was the place where one visited many stores to learn about a desired item’s available options before buying the best choice. Deloitte correctly reports that today nearly everyone shops online and then chooses where to buy. Now shopping is an activity done at home, while buying can happen at home via direct shipping but increasingly involves immediate satisfaction for customers who drive to a pick-up location. That Buy Online Pick-up In Store (BOPIS) drives traffic to brick and mortar locations causing the increase in shopping center traffic.

Where people shop matters because that decision still drives their buying destination. Retail profit follows the customers’ choice of how and where to obtain their items. If BOPIS is the delivery choice, the customer clicks on the directions icon and heads to the store with the item in stock. That may or may not be the closest store. BOPIS has changed the size and configuration of brick and mortar locations. A retailer can have fewer and smaller stores because customers will drive farther to obtain items already purchased and out-of-stock is solved by sending customers to another location rather than providing more space for additional inventory. Shopping centers add experiences such as attractive landscaped plazas and unique experiences such as pop-up shops and festivals to encourage millennial and Gen Z BOPIS patrons to stop and enjoy the environment.

Recognizing that the retail landscape is continuously changing, we are using our ULI Chicago Retail webpage to share latest industry trends, relevant research, and “opinion pieces” from ULI members, complementing the information and strategies presented in our recent Retail Report 

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