the question

Over few years, there’s been endless discussion on whether internet shopping will kill bricks and mortar retailing, and if so, how quickly that demise will come about. Amazon and its counterparts are terrifying the bricks and mortar world; most physical retailers just don’t know how to invest in their physical and virtual assets in a way that will keep them as ongoing concerns when more and more shopping moves online.

We’re not here to answer all to all of that today. An online shift, at least in part, is inevitable. But, the question that retailers ask us over and over again is which categories will move online? The trouble is, consumers don’t think of their purchases in terms of categories, but rather in terms of needs. In trying to predict category movement, retailers are asking all the wrong questions. Instead, they should consider the question from the consumers’ point of view.

Consumers have needs, and the ongoing dialogue in their heads is, “Do I need enough to warrant a trip to the store?” Those needs (and in many cases, they’re really wants) are sometimes singular. For example, a consumer might have a need for a new television or a gallon of milk. In most cases, however, it’s a series of combined needs that triggers a trip: new clothes for school; groceries for the week; supplies for an upcoming birthday party.

The retailer of choice in the pre-internet shopping world depended on the type of trip. In the case of a single need for a television, the consumer would likely go to Best Buy, or another electronics retailer. If the need were groceries, they would most likely go to a grocery store. Superstores and hypermarkets served multiple needs at once, so they would win a trip where the needs include both food and gifts for a birthday girl.

While retailers and manufacturers usually consider a stop at a single store to be a “trip,” to a consumer a trip can include stops at multiple stores. A typical Saturday stock-up trip might include a stop at Kohl’s for new shoes and a stop at the grocery store. The emergence of malls catered to consumer convenience by combining many stops into one, and superstores took it a step further by combining all those needs into a single store.

All of this is pretty common sense. The real question is how consumers’ shopping trips will change in the internet-enabled environment.

Interviews with consumers are telling. Most keep lots of different lists on their fridge or phone. A grocery list, a Costco list, a Target list. When the list gets big enough, or when it’s part of their routine, they make the trip to the store. But, buying online doesn’t require list making at all – in the time it takes to add something to a list, the item can be ordered for delivery. In fact, consumers tell us the bulk of internet shopping consists of their meeting single needs, while the bulk of in-store shopping consists of multiple needs, albeit often in the same general category. 

So, the question becomes: which needs will consumers move online, and which will they collect for a physical trip to the store?