Much of the conversation around in-store and online sales has focused on the ways that the online marketplace is hurting brick-and-mortar retailers. There is certainly some truth to these concerns. Over the past 20 years, local stores and national chains alike have closed or declined due to the increased competition from online retailers. A recent report offers a silver lining for traditional stores. According to a survey from First Insight, consumers tend to spend more money on a trip to a physical store compared to when they shop online.
First Insight recently surveyed 1,000 U.S. consumers to learn more about consumer “shopping habits, purchase behavior and the influences driving decisions”. While it may be natural to assume that people spend more money online, that isn’t what the researchers found. Among the survey respondents, 71 percent (72 percent of men; 70 percent of women) stated that they typically spend more than $50 when shopping at an in-store location. This average drops to 54 percent of respondents (59 percent of men; 49 percent of women) when the respondents were asked if they spent more than $50 when shopping online.
Even when you look at a high price point, in-store sales are still beating out their online counterpart. One in three (34 percent) respondents (36 percent of men; 33 percent of women) reported spending more than $100 during a typical in-store shopping visit. However, only one in five (21 percent) of the survey respondents (26 percent of men; 17 percent of women) reported spending more than $100 when shopping online.
“Even as online sales grow, this research shows that retailers must work to strike the right balance with consumers who are shopping differently online than they are in-store,” said Greg Petro, CEO of First Insight, according to a press release. “The fact that consumers are less likely to add items to a cart when shopping online implies that online recommendations are not as effective as they should be. Retailers need to be sure to offer the products consumers need and want at the right price points no matter where they are shopping and must continue to work to drive traffic in-store where consumers are willing to spend more.”
There multiple factors to consider when looking at this situation. The fact that consumers spend more money on an in-store shopping trip is countered by the fact that people buy online more often. Also, in-store shopping requires traveling, which is limits how often someone can do it. According to the survey, 73 percent of men and 69 percent of women respondents said that they only shop in-store when they have a need for something. However, physical stores have advantages that can increase the amount people spend. For example, it’s easier to add items to your cart when shopping in-store.
According to the First Insight survey, three out of four men (78 percent) and roughly nine out of 10 women (89 percent) women reported that they sometimes or always add additional items to their cart when shopping online. Customers were considerably less likely to add additional items when they shopped at in-store retailers. By comparison, two out of three men (67 percent) and three out of four women (77 percent) reported adding extra items to their carts when shopping online.
The report has a lot of interesting data for in-store retailers. Download the white paper to learn what technology can boost in-store sales, and which items sell the best for various retail types.
Be sure to look for other retail articles on Market Research Today to gain more knowledge that can help your business.