The earliest example of the voluntary exchange of goods can be found as far back as 10,000 BC, when, archeological evidence suggests, people traded flint and obsidian. By 3,000 BC, Ancient Egyptians were trading with their neighbors for, among other goods, precious metals for jewelry. Fast-forward to the third century AD and you’ll find the Persian bazaar, which contained arguably the world’s very first stores.

Regardless of when you choose to date the beginning of “shopping,” people have been at it a
very long time.

Today, though, the shopping landscape looks at first glance much different than at any point in history. The reason, of course, is the ever-increasing shift of physical store sales moving online (see chart one).

For stores and marketers, this is scary stuff.

But is the rapid explosion of e-commerce an entirely new and irreversible phenomenon? By the mid-20th century, Sears, Roebuck and Co. was the largest US retailer, thanks almost exclusively to its catalog/mail-order business — the virtual shopping of its day.

And then a funny thing happened. Physical stores grew in number and size, regained their dominance — and you didn’t see the world’s most-famous catalog much anymore.

Mark Twain famously observed that “history doesn’t repeat itself, but it does rhyme.” Are there lessons we can learn from a past in which physical retail ultimately remained the primary channel of shopping?

We conducted a study, Reimagining the Retail Store: The Shopper’s Perspective, in which we asked 2,200 shoppers for their views on physical stores: What do they expect out of stores, and when are they disappointed; what are stores’ strengths and weaknesses; and how do stores stack up against their virtual alternatives?

We can, for starters, take some comfort in the fact that more than half of the respondents felt that there were many instances in which there is no substitute for seeing a product in real life. Indeed, only 17 percent would prefer to do all of their shopping online if it were possible. And only 31 percent are willing to sacrifice the physical shopping experience for lower price.

Such statistics are as relevant to brands as they are to retailers. Marketers need to assess the relative strengths and weaknesses of their physical-distribution channels and partner with retailers to leverage the strengths more imaginatively, and help to fill in any opportunity gaps.

Let’s take a look at some of the key strengths of physical retail from a shopper-marketing perspective.

Sensory Stimulation. Until there is a major revolution in computing technology, the web is limited to two of the five senses — sight and hearing. So, how can stores continue to take advantage of their exclusive access to people’s other three senses — and do so in ways that are new and compelling?

Metro, the German grocery-store chain, is using its Future Store Initiative to test olfactory stimulus in merchandising, bringing, say, a fresh citrus scent to its seafood section or the aroma of the bakery to its bread aisle. That’s just one idea today’s stores are trying out. There are plenty more — and countless others yet to be conceived. Surely, for example, a new era of taste-centric merchandising beckons for a food category in which traditional sampling has become passé.

The point is: We are multi-sensory creatures — and sometimes even what we can see and hear online can’t compare to how we use these senses in a physical retail environment. Pampers proves just this with its in-store comparative-product display. Shoppers can see how Pampers Cruisers are 20 percent thinner than the other premium brand in a much more compelling, immediate way than the web would allow.

Human Interaction. Our study clearly identified human interaction as a value in the physical retail equation. But it’s no longer enough simply to acknowledge the customer’s presence — shoppers now expect much more. They expect prompt service from salespeople who know the merchandise, know the right amount of interaction and understand the right timing of service.

This is not the exclusive domain of the retailer. Comcast has enjoyed success by helping shoppers find the right television packages and hi-speed internet service to go with hardware purchased at Best Buy. In nearly 200 Best Buy stores, Comcast salespeople use consultative selling to ensure the optimal combination of physical hardware and content. This form of human interaction in the store is putting a face to a hitherto faceless category.

Just-In-Time Ideas. Shopping online continues to be clunky. In many ways, this channel is going through — albeit at a significantly accelerated pace — the category-management evolution of physical retail. The “if you like X, then you might like Y” algorithms somehow lack the intuitiveness and inspiration of smart product adjacencies in stores. Brands and category buyers need to leverage this strength by going beyond the aisle and any one category to think about the logical (and emotional) interrelationships between brands and products.

The emergence of the “meal solution” within grocery is a prime example of this dimension. Selling a two-liter bottle of Coke via the web is a wholly different proposition (and involves a wholly different shopper mindset) than placing the brand in the context of a meal that has only been planned less than an hour before consumption (57 percent of all evening meals, according to the Coca-Cola Retailing Research Council).

A “stack ‘em high” approach to merchandising is clearly vulnerable to a web-based, and lower-margin, alternative. But a bottle of Coke, chilled, alongside cook-at-home pizza, salad ingredients and a 20-minute recipe idea, has no online equivalent.

Marketers must be more creative in the way they place their brands and products to penetrate the shopper’s mindset in the physical retail environment because immediacy, physical context and inspirational stimulus can win out over rote replenishment via the web. Brands and portfolios of products need to recognize that they are no longer in the commodity business; rather, in collaboration with their retail partners, they need to be in the solutions, lifestyle and ideas business. Such shopper-insight-inspired ideas are the very essence of best-in-class, collaborative shopper-marketing today.

Real-World Engagement. Marketers should ask themselves: “At what points on the shopper journey is physical interaction with my brand most important?” and “What role can physical retail uniquely play within this journey?” Shoppers in our study recognized the unique strength of the store for more functional than emotional benefits, namely getting it, returning it and saving time. But as shopper marketers, we are letting down our retail partners when only 32 percent of shoppers believe that stores are better than websites for stimulating and entertaining me (see chart two).

Clearly, brick-and-mortar retail is under-delivering and as such is more vulnerable to the competitive threat of the internet than it ought to be.

Unfortunately, a total migration of retail sales to the web is not a zero-sum game. In fact, it would be an economic catastrophe because it would put shoppers into consumption autopilot. The web is great for replenishing supplies, but it doesn’t inspire as much spontaneous spending or fun shopping, and it lacks the touch and feel of physical stores.

If consumer spending — which drives two-thirds of the American economy — went entirely to the web, the total spend would decline because the web simply doesn’t stimulate the kind of consumerism that drives Western economies. In such a scenario, marketers have nearly as much to lose as their retailer counterparts and need to play a role in bringing the magic back to the real-world shopping experience.

Furthermore, the well-documented migration of sales to the web only tells part of the story — purchase.

Our multichannel shopper and retail studies both highlighted that more and more shoppers are dipping in and out of channels along the path-to-purchase. A significant portion of ecommerce sales are, in fact, heavily influenced by brand/product knowledge gleaned from an in-store experience.

K’Nex, the toy construction-set brand, recognizes this. In an effort to drive sales in-store and on the internet, it has displays that showcase completely built rollercoasters that shoppers can interact with and watch in action.

The Best of Both Worlds

Our multichannel-shopper study identified that shoppers’ expectations of stores have been significantly affected by online shopping. People have grown accustomed to having certain information and support readily available when considering a product.

Marketers can give themselves a competitive advantage by bringing the benefits of the web shopping experience to physical retail — such as creating access to peer and independent third-party reviews via text and scannable codes or facilitating expert advice in the store either virtually or in person. Smartphones now allow brands to fill in such gaps at brick-and-mortar retail, but well-designed point-of-sale materials can also continue to play an important role in helping shoppers with brand choice and experience.

At its best, a new-world form of shopper marketing harnesses the technology of the web with the immediacy of the store via simple and valuable mobile shopping tools. A great example of this is the HP printers display found in Staples office supply stores. Shoppers are given instructions for how to text to receive expert, unbiased product reviews from CNET.

The combination of immediacy and internet connectivity provides an almost-limitless opportunity for brand marketers. It gives them the opportunity to provide shoppers with solutions inspired by anything from seasonality to local products and culture, from time-of-day to the weather.

• • •

In the future, shopping on the internet undoubtedly will take advantage of faster processing power and broadband speeds, new software and interface developments. Just imagine what it might look like — we’ll use an augmented-reality avatar to navigate through a three-dimensional virtual world.

Eye-tracking software will allow us to sort rapidly through display items. Sensory interface gloves will let us touch and feel products while neural-network computing powers holographic salespeople, and experts advise on purchases. Purchases in our “basket” will be checked out and automatically delivered though networked distribution centers to be available without shipping cost, and for immediate pick-up.

But in the meantime (and for a long time to come), this is reality. It’s called a store — and when brands and retailers work together, it can be a great place to shop.