Why Retailers Shouldn’t Stress About Lower Foot Traffic

The retail times they are a’changing, according to Shelley E. Kohan, VP of Retail Consulting at RetailNext.

What prompted this comments was, what else, a question about what brick and mortar retailers were dealing with so far this holiday season. Kohan’s observations about Thanksgiving Day and Black Friday at the traditional brick and mortar retail locations, in particular, she said, reflected a very different pattern than prior years.

Normally, Kohan said, Black Friday, in particular, was among the biggest retail days of the year. The shift away from brick and mortar foot traffic can come down to four words: no sense of urgency.

“[Retailers] came out very early in November with deals and promotions, and I think that may have deterred people from feeling that they needed physical shopping in the store environment,” Kohan told MPD CEO Karen Webster in a recent interview

By moving up the timeframe, Kohan said, retailers took the pressure off of Black Friday shopping. “Thanksgiving becomes a five day shopping endeavor and there’s really less urgency in the mind of the consumer because they know promotions will continue to be available on Thanksgiving, Cyber Monday and into December. The retailers that do a lot of promoting for Cyber Monday in the ecomm businesses, the big guys, they really captured the attention of that shopper early and so by doing that they really distracted shoppers from going into the physical store,” Kohan said.

But, that didn’t necessarily spell doom for the brick and mortar merchant. Kohan and RetailNext have observed a couple of other things in November that may offer a silver lining for those retailers who ended up with customers in their aisles.

First, those consumers may have had a better shopping experience.

Instead of scrambling to stock, staff, and serve the crush of consumers on Black Friday, retailers had time to prepare and spread out the demand, Kohan observed. “Now because that traffic has shifted throughout the course of the month, it actually delivers a better shopping experience for those consumers who prefer to shop in store.”

Perhaps most important, Kohan noted that despite foot traffic being down, the average sales per shopper and conversion metrics were up for November, all good signals for retailers. Those consumers who found their way into the stores, actually spent more, too. And, may turn out to be a customer with whom that merchant has a chance of developing a loyal, long term relationship with.

Kohan offers three things that successful brick and mortar retailers did to get consumers into their storefronts.

First, they incorporated technology into the in store shopping experience. The new touch points, as Kohan called them, included QR codes, in-store messaging through WiFi, and store apps.

Hand in hand with making those touch points available to consumers is the digital/physical convergence and sales conversions that they offer retailers. “The more [retailers] can kind of combine what’s happening in the online space vs. the physical space, [they’re] creating more touch points, more touch points equal better loyalty and loyalty equals more shopping dollars, more sales per shopper,” Kohan said.

The last but equally important aspect is the ability to use technology to eliminate the pain points. By making the experience faster and frictionless for consumers by using things like mobile POS device for checkout, quick size find technology, or added transparency about the price, retailers can smooth out the experience for consumers.

When asked by Webster which brand Kohan believes has done the best job at delivering on all three of those best practices, Kohan without hesitation said Victoria’s Secret. Kohan points to their strong brand messaging, well-timed December fashion show, and integration of the online and in-store marketing.

Kohan remains optimistic about the remainder of the holiday shopping season for brick and mortar retailers, even though many of the indicators point down and not up.

“I do think with that increase in sales per shopper and average transaction value and the higher conversion rates that retailers are able to accomplish now, that’s going to translate less to a sales drop,” she said. “So I think a slight sales drop in the brick and mortar environment year over year with the traffic decline, somewhere in the low single digits.”



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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