The way we are shopping now is shaping how we will shop in the future when the coronavirus crisis has passed.

The pandemic, which has fueled a surge in online shopping and in-store and curbside pickups, is accelerating a trend toward a hybrid retail model.

Stores are adopting high-tech fitting rooms, hospitality lounges, on-site returns, and shipping online orders from brick-and-mortar locations as they bring in-store shopping and e-commerce fulfillment into the same space, according to a new report from CBRE Group Inc.

Online sales have grown annually an average 16% since 2020, with the pandemic accelerating growth even more, while physical retail has averaged 3% growth per year over the same period.

“Retailers will continue to evolve and attempt to drive traffic to their brick-and-mortar stores as these locations continue to be vital for their customer connections and overall profit margins,” said Southern California-based CBRE (NYSE: CBRE) retail specialist Motti Farag in a statement. “There is a reason why brick-and-mortar locations continue to make sense. It is the place where retailers connect with their customers and offer best-in-class service to particular communities. These locations are still key, whether it be for in-store purchases or last-mile fulfillment.”

On the retail side, the new hybrid model will bring various changes, the CBRE report said. Those changes include:

  • Dedicated space for curbside pickup.
  • Digital wayfinding signs.
  • In-store features on the retailer’s mobile app.
  • Separate desks for traditional and omnichannel shoppers.
  • High-tech fitting rooms with smart mirrors, allowing shoppers to try on items virtually.
  • Lounges where customers can take a break from shopping.

Meanwhile, the hybrid store of the future will handle multiple forms of fulfillment, inventory control and returns, including these changes, per CBRE’s report:

  • A warehouse racking system the separates online orders, in-store pickups and in-store replenishment.
  • Delivery access for shipping and receiving online orders.
  • Technology that optimizes inventory to ensure continuous replenishment.
  • Reverse logistics support for online returns to determine whether they should be resolved or returned to the regional fulfillment center.

“Retail is ever-changing,” added Farag. “Everyone involved must adapt or they will be left behind. The change is for the better as it offers more convenience and connectivity as technologies continue to change the way we live.”

Source: Sacramento Business Journal