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EDITORIAL How hybrid retail is coming into its own this Christmas

One of the unforeseen consequences of the economic turmoil engulfing the UK has been the way in which it has changed shopping habits. Again. Naturally, cash-strapped consumers are looking for bargains, offers and deals and, with Prime Day Lite just finished and Black Friday around the corner, you’d be forgiven for thinking that online is where they are heading to do this.

However, that isn’t entirely true. A growing number of shoppers are heading to physical stores to look for bargains on the shelves, to seek out reduced to clear items and to see if they can save in other ways.

This is particularly beneficial to discount and bargain stores, which are now predicted to be the winners this Christmas, attracting record numbers of shoppers into their stores to do their festive shopping on a budget.

Still that is only part of the story. According to research, 86% of discount retailers are expecting strong growth this quarter, followed by 85% of value brands – much of it driven by footfall to stores from consumers who told the same researchers that they are looking to spend 25 to 30% less this Christmas. However, the retailers – even in the discount and bargain end of the market – that offer click and collect and other hybrid retailing are set to see the biggest growth. In fact, value stores that offer click and collect as well are set to see 42% higher sales than their competitors that don’t.

This is part of a wider move in retail driven by the need for physical stores to offer a much more digital and hybrid experience to customers. This extends way beyond click and collect. A study of more than 12,000 shoppers across the UK, US, France, Spain, Germany, The Netherlands and China out this week shows that 71% will prioritse in-store shopping if they get a pleasant experience, a third of shoppers now expect stores to invest in digital payment and self-service technology, 41%, as well as interactive screens, 37%, that allow them to explore ranges and customise services or products 39%.

The metaverse is intriguing to UK shoppers with 33% expecting retailers to provide information on how to visit the retailer’s store in the metaverse or other virtual space.

Phygital, the merging of the physical and digital environments, is equally important with 38% shoppers expecting interactive digital screens or tablets to provide in-store access to all the same search and discovery tools that are available online.

Combining this with having to reach out to consumers based on their cultural beliefs and social leanings such as sustainability and ethics, rather than advertising based on price, is also proving key. Bringing together this merged world of online and in-store with the right messaging can be very powerful.

Unless, that is, you are targeting Gen-Zers, who it seems are very much wedded to digital retail. According to a separate study, nearly half (49%) of Gen-Z shoppers say in-store shopping makes them feel anxious.

The message, then is clear, shoppers like in-store, hunt there for bargains, but they also want to do that online. The challenge then is how to offer all things to all men (Gen?) without breaking the bank. For many retailers, the tech is already there, it really comes down to how to deploy it correctly to meet these challenges. But with consumer confidence at an all time low – and interest rates and inflation at record highs – investment now is all you can do.

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