Three reasons why shoppers still prefer brick-and-mortar stores

Physical retail is undergoing a renaissance, according to a recent study.

While luxury goods sales are only continuing to increase globally, there has also been a glorious return to brick-and-mortar. In a post-pandemic world, more customers prefer in-store shopping experiences. But what e-commerce brands lack in customers, they make up for in the growing price of digital marketing. In response, many are putting down roots with a physical store.

After all, not even the convenience of an iPhone can outmatch the effect brick-and-mortar has on brand awareness, purchasing intent, and customer perception. For further insights on the power of in-store retail, the Brookfield Properties Consumer Insights team surveyed 5,000 shoppers nationwide. Here are three takeaways from the results. Spoiler alert: They may surprise you.

1. Brick-and-mortar boosts brand familiarity, which, in turn, leads to more sales
   
   Our study found that brand awareness was 45% higher when respondents saw a physical storefront versus the same brand's online banner ad. For example, those shown a physical storefront were also 45% more likely to consider purchasing from the brand than those who saw an online ad.

2. Physical stores elevate customer perceptions about a brand's identity
   
   According to 70% of survey respondents, retail brands with physical stores in malls were more appealing than online-only brands, and 73% said brands that open stores are doing so to serve their customers better. Physical retail also affected respondents' perceptions about a brand's financial wellness, especially if that brand was previously online-only. When an online-only brand opens a brick-and-mortar store, 60% agreed that "it means they're doing well." Notably, 80% of survey respondents said they would pay more to purchase apparel from a physical store than online. Physical stores offer even more bang to digital natives and less-familiar brands.



3. For a brand that’s new to the scene, the impact of having a storefront is even more significant
   
   Those exposed to a storefront for a less-familiar brand were 22% more likely to recall seeing it than those exposed to an online banner ad. They were more than three times more likely to consider purchasing from that brand than those who only saw an online banner ad. Meanwhile, respondents exposed to a storefront for a digitally native brand were 24% more likely to recall seeing it than those who saw an online ad. More than half remembered the storefront, while only 44% remembered the banner ad.

As the cost to acquire customers has surged for online-only brands, many have turned to brick-and-mortar as an avenue to fuel growth and build brand identity. According to our study, the unexpected bonus is that consumers regard physical stores as a means for brands to serve their customers better. And they're willing to pay more for that privilege.