Meet the 4 customers still shopping in-store

Plus: why department stores are failing

I mostly write about e-commerce, but I love retail. In a previous role, I worked in strategy at PANDORA jewelry (your mom’s favorite charm bracelets) and was focused on our store experience. I believe in the magic of a memorable, personalized store visit – one that leaves you – the customer – feeling special, pampered, and understood. If asked, you can probably recall your best store experience.

What’s your favorite store experience? Let me know in the comments.

But too often, going in store is an awkward encounter where I do a quick lap of the near-empty store under the silent gaze of a bored associate. On the slim chance he or she tries to engage with me, it’s a cursory “can I help you with anything,” and nothing more. Not magical!

E-commerce is growing at 13% annually, according to eMarketer, slowly eroding retail sales. When many of us imagine our ideal community, we picture mom and pop shops mixed in with our homes, schools, and workplaces. We picture popping into a specialty grocery after work or grabbing a bottle of wine from a local place where we know the owner. We want to spend our rainy weekends browsing fun shops – like thrift stores, fancy department stores, or cute home goods shops. In reality, it’s becoming harder for these places to stay in business. Many neighborhoods are seeing retail closures accelerating with those that stick around morphing into the same cast of characters – Starbucks, CVS, another CVS.

There are principles brands and retailers can follow to effectively plan their physical footprint for success in today’s environment – and strategically pair e-commerce tools with their physical presence to meet their goals.

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I see 4 distinct in-store shopper missions - and each aligns with an assortment strategy.

For each mission, brands can use e-commerce in different ways to complement the physical store experience.

This framework can help brands decide how to invest in physical retail and supporting omnichannel efforts - and where to avoid spending.

Let’s break it down:

The Retail Positioning Matrix

The Hobbyist

This is one of my favorite categories of retail and one that has persisted (when done right) because the core user visits frequently.

The hobbyist is looking for a trusted destination for everything related to their activity of choice - running stores, knitting shops, ski shops, and more fit in this category.

The stores must have deep inventory of a wide set of products that are all geared toward a specialist activity. For a running store, they want shoes, apparel, cross-training supplies, nutrition options, sun care and more - to keep the customer coming back.

How these stores should use e-commerce:

• Publicize events that are hosted in-store – use online touchpoint to collect consumer data and build the relationship

• Build authentic community - for example, a running store can encourage its audience to sign up for local races and share content online.

• Offer auto-replenishment and/or buy online, pickup in store for convenient repeat purchases

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The Research-First Shopper

I am researching an expensive or custom purchase, and I want to see/touch/feel it before buying. A quintessential example of this is your mattress showroom.

This store needs a wide option set for customers to research, but can get away with little or no inventory per SKU.

I don’t expect to leave the store with my item. But I do expect free, fast shipping.

Examples in this category: baby supply showroom, furniture showroom. An interesting example that crossed my desk recently – a custom jeans consultant/fit store!

How these stores should use e-commerce:

• Online appointment booking

• Pre-appointment education via text, email, and online content

• Add-on services – for a furniture showroom, can they provide easy-to-schedule dropoff services?

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The inspiration-seeker

I have a case of the “shops” and I want to bop around and buy something cool – inspire me!

These stores should offer a tailored, curated assortment and can benefit from frequently changing inventory to keep the shopping experience fresh. In some cases - like thrift stores - items may be one of a kind!

Examples in this category: thrift and antique stores, boutiques/ “shoppy shops”, gift shops, luxury stores

How these stores should use e-commerce

• Consider live-shopping solutions to bring the physical store experience into the digital world

• Engage in brand-building via social media

• Showcase newness and tell the story behind the products

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The Need-it-Now Shopper

OMG! It’s my kid’s birthday party this weekend and I haven’t bought any decorations yet. It’s too late to order online. What can I do?

The ideal store experience offers deep inventory of each SKU, but may have a relatively narrow selection. I can confidently shop for my last-minute decorations knowing that they will have what I need, but my options won’t be as vast as Amazon. However, by maintaining a smaller footprint, these “need it now” shops can be located conveniently where we live and work, for easy access.

In this case, I’m desperate. The store can probably mark up the items a bit – and in fact, I expect them to.

Examples in this category: hardware stores, party supply stores, pharmacies

How Need-it-Now stores should use e-commerce:

• Invest in rich store locator functionalities with inventory visibility that allow customers to browse what’s in store so they don’t waste their visit and leave disappointed

• Offer pickup and same-day delivery

• Use AI-powered tools online to answer customer questions on products that best address their needs, allowing them to build a targeted shopping list

• Offer complementary services to enhance ease and convenience – for example, can party supply stores connect me to caterers or photographers for my event? Can they charge a bit more to assemble the balloon arch for me prior to pickup?

• Leverage data from online shopping behavior to inform assortment at hyper-local small retail boxes

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Why department stores are failing

Department stores are one model of physical retail that has been particularly troubled. In the past two decades, department stores have lost serious ground:

• U.S. department store sales dropped by over 40% from 2000 to 2023 (U.S. Census Bureau).

• In 2020 alone, J.C. Penney, Neiman Marcus, and Lord & Taylor all filed for bankruptcy.

• Macy’s has closed more than 300 stores since 2015 and plans to close 150 more by 2026, pivoting toward smaller-format concepts.

• According to Coresight Research, the number of U.S. department stores declined by nearly 50% from 2010 to 2023.

• Saks is about to go bankrupt

Department stores are failing because they are attempting to serve each of these shopper types under one roof - and that’s impossible.

• Hobbyist: Department stores cannot compete with the breadth and depth of specialized product that hobby-focused stores offer. They have a selection for a variety of needs, but dedicated hobbyists will shop elsewhere.

• Inspiration-seeker: Department stores are theoretically designed for browsing, but often they are segmented by brand in “shop-in-shops” that are not truly driving inspiration and fun

• Research-first: Economic challenges have resulted in lower staffing levels, making it difficult to replicate the high-touch service model of the showroom

• Need it now: Department stores can address this need in some cases, but may not match the hyper-local convenience of a “need it now” store.

Taken together, department stores are saddled with huge footprints, but aren’t really serving any customer type entirely.

It’s not surprising when viewed through this lens that this model has failed to survive in the digital era.

Some success stories using the framework

• Nike leaning into hobby oriented shopping with events done right

• Whole Foods experimenting with new formats to better serve the “need it now” customer

• The RealReal boutiques maintain a “treasure hunting” experience supplemented by online

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Smart retailers are rethinking their physical presence around specific customer missions, not generic foot traffic goals. Whether it’s last-minute needs, guided research, inspirational browsing, or community-driven hobbies, each model thrives when paired with the right e-commerce tools and expectations.

The winners won’t be the ones trying to serve every customer in one space—but those who double down on doing one thing exceptionally well. For brands, this means getting clear on your store’s purpose and aligning everything—from layout to staffing to your online experience—to support it. When done right, physical retail can still feel magical.

Stay Curious,

Melina