Apr. 02, 2025
One of the most common reasons brands lose customers to competitors in retail stores is that shoppers often change their minds based on their in-store interactions. What they see, learn, or experience while browsing can influence their purchasing decisions. To stay ahead, brands must optimize their retail strategy and ensure their products stand out.
In today’s e-commerce-driven world, where customers can purchase nearly anything online with just a few clicks, why do they still visit physical stores? The answer lies in the value of in-person product interaction. Customers want a hands-on experience before making a purchase, and brands must enhance this interaction to increase sales.
Action Step:
Ask yourself—how does physical interaction with my product improve the in-store shopping experience? If packaging plays a crucial role, ensure its key components are visible when placed on shelves.
Why Do Customers Prefer Physical Stores Over Online Shopping?
According to Forrester, 72% of U.S. retail sales will still occur in physical stores over the next few years. Customers favor in-store shopping because:
47% appreciate the ability to test products before buying.
38% enjoy the instant gratification of taking their purchases home immediately.
With the rise of online and mobile shopping, brand identity and storytelling have become increasingly important. Even if your products are sold exclusively in physical stores, you can’t ignore the impact of omnichannel marketing. Consumers now expect the same level of information and engagement in retail stores as they do online.
Use every available touchpoint—packaging design, endcap displays, and shelf arrangements—to reinforce your brand’s larger narrative, connecting the in-store experience with your online presence and social media efforts.
Example:
Health-Ade Kombucha’s packaging integrates branding details creatively. The anchor in its logo is molded onto the bottle cap and embedded in the glass at both the top and bottom, reinforcing brand identity at every touchpoint.
Understanding what motivates a customer to purchase is important, but knowing why they choose not to buy can be even more valuable. Are they more familiar with a competitor? Does your packaging fail to answer their key questions? Or are they abandoning the purchase altogether?
By analyzing these factors, you can fix gaps in your retail strategy and improve conversion rates.
Action Step:
Before making any marketing adjustments, evaluate your product’s presentation, packaging, and placement. Does it capture attention? Is it engaging? Does it educate the shopper effectively?
Simply getting your product into a retail store is not enough. Placement matters—a lot. Products positioned at eye level or in high-traffic areas perform significantly better. Research from the University of Chicago found that moving bottled juice from the worst shelf position to the best one increased sales by 79%.
Strategy:
Compare your market share to your shelf space share. If your shelf space is smaller than your market share suggests it should be, use this data to negotiate better positioning with retailers.
Between 2019 and 2021, the average foot traffic in U.S. retail stores dropped by 36%, with some sectors like fitness and apparel experiencing even slower in-store shopping. To remain competitive, brands need to stay aware of evolving retail trends and consumer preferences.
Action Step:
Observe what industry leaders are doing with their in-store displays and point-of-purchase (POP) merchandising. Platforms like Pinterest and industry award lists (e.g., Shop! POP Global Awards) can provide inspiration for optimizing retail presence.
Seeing your product sold out on store shelves might seem like a good problem to have, but in reality, it can hurt your brand. Studies show that 30% of out-of-stock products are purchased from a competing brand at another store. Frequent stockouts not only affect your sales but also give loyal customers a reason to try alternatives.
Pro Tip:
If stock shortages are a recurring issue, first review your ordering system to identify potential problems. If production capacity is limited, reducing shelf space may be better than leaving empty shelves, which can hurt your brand’s reputation with retailers.
Your relationship with store managers and buyers can significantly impact your brand’s success. Scheduling store visits when managers are available and showing interest in their business can foster goodwill. These relationships are valuable because store employees can act as brand advocates, recommending your product to customers when you’re not there.
Key Consideration:
External factors such as wages, employment conditions, and even geopolitical events can impact retail demand. For example, large brands severed ties with Russia following the Ukraine conflict, leading to significant revenue losses. Staying informed about macroeconomic trends can help brands make better retail planning decisions.
Rising commodity prices, including metals, grains, and oil, have put pressure on manufacturers and distributors. This cost increase is passed on to consumers, leading to higher retail prices. Between 2020 and 2021, U.S. consumer prices rose by 5.4%.
To maintain profitability without alienating customers, brands must work closely with suppliers to manage price adjustments strategically.
Digital transformation can improve demand forecasting and overall business planning. Retailers using advanced analytics and integrated planning tools can make better financial decisions and anticipate market changes more effectively.
Brands that leverage real-time data, AI-driven insights, and inventory management technology can optimize stock levels, reduce inefficiencies, and respond more quickly to market shifts.
Retail success is about visibility, engagement, and strategic planning. By understanding customer behavior, optimizing product placement, and maintaining strong retailer relationships, your brand can outperform competitors and thrive in physical stores.
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