Morning Consult will start publishing a new quarterly report, “The State of Retail and Ecommerce,” that tracks evolving consumer shopping behavior and its impact on the industry’s future. For its first report, it surveyed more than 8,000 adults across US, Europe, Mexico, Australia and China and found that consumer comfort with in-store shopping is rising, the growth of online shopping has plateaued and more.

Store Comfort Returns

According to Morning Consult’s findings, US consumers’ comfort with physical shopping is nearing the high-water mark reached in summer 2021. Consumers prefer to shop in-store rather than online for most things, from groceries to apparel to furniture to personal electronics. 

Eighty-two percent said they prefer to shop for groceries and household goods compared with 16 percent who prefer to do so online. Fifty-two percent prefer buying personal electronics in-store versus 38 percent who like to buy the same online.

The role of digital channels in shopping won’t revert to pre-pandemic levels, however, and Morning Consult says investment in digital tools to meet consumers where they were will increasingly bridge digital and physical channels.

When asked how comfortable they’d feel going to a shopping mall right now, 31 percent of US respondents said very comfortable, 33 percent said somewhat comfortable, 19 percent said somewhat uncomfortable and 13 percent said very uncomfortable.

Though they generally prefer in-store shopping, baby boomers are now more likely to shop online given their concern about the pandemic. Urban consumers have mostly adapted to pandemic conditions and local guidelines. Consumers with a household income of $100,000 or more (37 percent) are the most comfortable shopping in malls given their increased access to preventive measures.

When asked how they typically prefer to shop, 41 percent of US respondents favored in-store over online. Younger consumers indicated a predictably higher preference for online shopping yet Gen Z adults and households earning less than $50,000 annually prefer in-person over online shopping.

The sentiment toward in-store shopping is the same globally, with all countries saying they prefer it except China. Unlike in the US, where shopping preferences are similar across genders, women in China and Australia show a higher preference for online shopping compared with men, found Morning Consult.

While in-store shopping is the prevailing preference among consumers, leading retailers are increasingly supporting blended shopping journeys by refitting stores to enhance online orders. Ecommerce brands should focus on barriers to online shopping such as payments and delivery friction while in-store retailers should continue to promote health and safety messaging.

Ecommerce Surge Stabilizes

Morning Consult’s research shows online shopping rates are normalizing in all the countries it analyzed with the exception of China, where a crackdown on big tech is causing the country’s high online shopping rates to decline.

With new services like buy online, pick up in-store (BOPIS) and augmented reality (AR) features that help consumers see how products would look on and in their home, ecommerce beats shopping in-store on convenience and time saved. 

But when it comes to factors inducing product comparisons, enjoyment, product details, product quality and customer service, consumers say in-store beats online.

The next phase of ecommerce growth depends on improving product discovery and exploration. Ecommerce brands determining what information a customer deems more valuable in a given category can help them prioritize real estate on product detail pages. 

For example, in Morning Consult’s survey, consumers said they prioritize detailed product information before buying personal electronics. Sustainability was the top consideration for purchasers of beauty and personal care products while reasonable prices are what consumers prioritize when buying groceries and household items.

Consumers from households earning less than $50,000 annually don’t see the same time savings benefit over shopping in-store. Gen Z’s perception of online convenience is less intense compared with other generations while millennials are least likely to enjoy the in-store experience. And wealthy shoppers reported better customer service experiences in stores.

Fulfillment Competition Heats Up

Forty percent of US respondents expect to receive their online groceries and household goods the same day. Yet for non-grocery categories, the need for speedy delivery seems to be industry-led as consumers are generally happy to receive online orders within five days, found Morning Consult. Still, same-day delivery and pickup services are popular with young, wealthy and urban shoppers.

In the US, millennials, men and urbanites expect apparel, personal care products and electronics ordered online to arrive in two days or fewer versus five days or more.  Retailers looking to capture this audience as well as stores with expanding men’s offerings should partner with services offering ultra-fast delivery.

Retailers are afraid that competition for faster delivery in the grocery sector will increase consumer expectations across other categories but Morning Consult says this is unlikely to be the case. For now, retail and ecommerce brands should improve logistics that enable multiple delivery modes instead of competing just on low-cost, high-speed delivery. Retailers can also work within consumers’ expectations and experiment with trade-offs like shipping costs, extra incentives and fulfillment mode choices. For example, nudging a customer who needs an item quickly to pick it up in-store.

Behavior in 2022 suggests fewer shoppers are using the BOPIS feature. Morning Consult notes that scarcity, not safety, will be the ongoing impetus for BIPOS utilization as supply problems continue in some categories.

According to the survey, 35 percent of US adults reported delayed deliveries in January 2022 with no real change from late 2021. When asked about the reason behind their delayed shipment, consumers are more likely to blame fulfillment providers than retailers and brands. To remedy the situation, retailers should be transparent in their post-order communications about timelines.

Some countries are faring better on the supply chain front, like the UK, France and Mexico. In other countries like Australia, China, Germany and the US, more consumers said they experienced delays in their online orders in the last month.

Future Of Physical Stores

In January 2022 alone, US retailers announced 1,910 new store openings while announced store closures are down 65 percent compared with this time last year, according to Coresight research. 

Leading the store opening trend are discount and off-price retailers. Dollar General, for example, announced the most 2022 store openings of any retailers with a focus on rural locations.

For rural shoppers, there’s little difference in perception when it comes to the value of promotions and prices between in-store and online shopping, the survey found. They see online shopping as more convenient and as a means to access higher-quality products.

On the other hand, consumers with households incomes of less than $50,000 are much more likely than higher-earning consumers to shop in-store because they see lower costs as an advantage for stores. Millennials are also more likely to head in-store for the best deals.

Suburban and middle-income consumers see few reasons to shop in-store as convenience and customer service drive them online, according to Morning Consult.

As luxury retailers focus their efforts on experience-driven activations and pop-ups to generate buzz around launches, Morning Consult predicts the future of brick-and-mortar retail is in high-end and discount stores. Targeted in-store experiences can woo urban, high-income shoppers into stores and create opportunities to build brand loyalty. But brands that don’t have differentiated store experiences need to become more competitive online, improving their ecommerce and logistics functionality.