With all of the talk of a retail apocalypse brick and mortar stores refuse to die. Despite store closures and iconic brands going out of business one thing remains clear, people are still shopping in stores. And in droves.

In the United States, online sales as a percentage of total retail sales still hover near the single digits at 11.2%. Amazon has been in business for a quarter of a century. It turned 25 this year. It has disrupted retail but has remained short of a complete take-over. Amazon currently captures 6% of total retail sales in the United States. A massive number for one company but hardly a sign that brick and mortar retail is disappearing anytime soon.

So what’s going on here? Why aren’t we buying more online? Here are four reasons why.

1. Physical retail still plays an important role in society

Retail stores, and the places you find them including shopping malls occupy an important part of our lives. They are gathering places. They are places where we meet, have a bite to eat, talk about our lives and shop.

While much has been said about digitally native Generation Z eschewing yesterday’s way of doing things, this generation (aged 7 – 22) shop the most in stores. According to a report by Bloomberg, 95% of this generation visited a physical shopping centre in 2018. It makes sense. If you are 15 where are you going hang out with your friends? And many members of this generation do not have credit cards making it hard to shop on their own.

And it’s not just Generation Z, nearly 50% of millennial internet users conduct the majority of their shopping in stores too.

As human beings we crave connection. We enjoy being with others. In a digital world that need is heightened. While you may spend a lot of time on your phone do you really love the experience more than spending time with a friend #IRL (in real life)?

Imagine a world where you never left your house. You use Uber Eats to get all of your meals delivered, then you go on Amazon to make your purchases. You work remotely. The only person you see is the delivery man. That sounds like a pretty lonely existence.

Speaking about the Apple store, Apple’s former head of retail, Angela Ahrendts said: “I think as humans we still need gathering places.” “And when you are serving digital natives, the thing they long for more than anything is human connection. Eye contact.” As a result, under Ahrendts’ rein Apple stores were redesigned to include features like “forums” for local artists and movie showings, and educational programming for customers to learn more about how to use Apple products.

So if stores are going to cease to exist there has to be a suitable alternative. And for now there isn’t one.

2. Friction in online shopping exists and its unlikely to go away anytime soon

Don’t get me wrong. I love online shopping. I do it all the time. But it is a complement not a substitute to making a trip to a shopping mall. Why do I continue to shop at stores? Well if you have ever done a lot of clothing shopping online you will already know why. Sizing. What size am I? My size is dictated by the brand. And brands have different sizing.

This friction in online shopping is built right into the shopping process. Brands have decided against streamlining their sizes and fits. So what’s a girl to do? You simply order multiple sizes of the same item. The size you think you are. One size up and maybe even one size down if you are being optimistic. It estimated that the return rate for returns of online orders is three times that of orders made in store.

Similar issues exist in other categories such as home furnishings. While augmented reality shopping apps from the likes of IKEA help to provide a better sense of what may look good in your home they do a better job of getting you to have some fun than helping you make a purchasing decision.

And then there’s the aftermath of shopping…..delivery boxes. For anyone who has had a stack of boxes in your home so high you couldn’t see past it you know what I am talking about. It is estimated that every year returns in the US result in 5 billion pounds of landfill waste and 15 million tonnes of carbon emissions.

And then there is the reality that you still want to see and touch something before buying it

Sometimes it’s just easier to go to a store and avoid these issues. The friction in online shopping continues to go away especially with the ability to get your delivery faster and faster. But friction still exists.

The future of retail is not in the demise of brick and mortar but in the integration of brick and clicks. Customers want to have what they want, when they want it and by the method they choose. That means that services like buy online pick up in store will continue to grow.

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3. People like shopping in stores….yes you do

It is not just about having somewhere to go. Generation Z, for example enjoys the in-store experience better. 75% of Generation Z surveyed said that a brick and mortar store provided a better experience than shopping online. The nature of eCommerce is that it is transactional. It can’t replicate a warm smile from a sales associate, a makeup application at Sephora or a treasure hunt at T.J. Maxx.

Stores provide an opportunity to connect with a consumer emotionally and they can also provide an exciting and fun experience. This is one of the reasons why popup stores have grown in popularity.

Millennial favourite beauty brand, Glossier hosted a popup last year in a café in San Francisco. Customers ate fried chicken while shopping for Glossier’s beauty products. The popup was painted in Glossier’s signature pink and it was so popular there was a long line up to get inside.

For Louis Vuitton popups are a key element of its strategy. In 2018 it had 80 popups but it is increasing that number to 100 this year. Speaking about its focus on popups, Louis Vuitton’s CFO, Jean-Jacques Guiony told analysts: “this trend in pop-up stores is extremely important, and we will continue to develop that because it enables us to be talking in a different way to our clients ... and it adds flexibility with our network.”

Even Amazon had a popup store in the UK last year to promote Amazon Fashion.

Not only do you like shopping in stores you like picking up your eCommerce items from stores. Retailers know this and it is the reason why Walmart has made a big bet on grocery pickup. It launched the service in 2014 and now more than 2,700 Walmart stores offer grocery pickup and that number is growing.

In the second quarter of 2019 approximately 50% of Home Depot’s online orders were picked up in its stores.

Bricks and clicks, like long lost loves go hand in hand.

4. Online shopping has failed to take over in the most digitally advanced economies

Graph of eCommerce penetration by country

At nearly $2 trillion China has the largest eCommerce market in the world by a wide margin. The United States comes in at a distant second place with eCommerce sales of $600 billion. Despite the fact that China has a tech savvy population its eCommerce sales as a percentage of total sales have yet to surpass the 50% mark.

Even Alibaba, China’s eCommerce giant has acknowledged the importance of brick and mortar retail. To capitalize on the vast majority of sales that still take place offline Alibaba made a move into physical retail in 2015 with the launch of its Hema supermarkets.

Hema supermarkets are a part of Alibaba’s “New Retail” strategy. New Retail according to Alibaba’s Founder Jack Ma is “the integration of online, offline, logistics and data across a single value chain.” It is an initiative aimed at connecting online and offline retail and digitizing stores in order to provide a better customer experience.

A report by Fortune magazine stated that: “the true threat to retail in China may not be online shopping. It’s the increasing likelihood that the country’s e-commerce giants will turn their attention to doing bricks-and-mortar—better.” With Amazon purchasing Whole Foods in 2017 and its opening of a grocery chain in 2020 it seems that the disruption of physical retail by eCommerce players is here to stay.

What does this all mean?

If you have retail stores you are not in safe territory. People like shopping in stores but having the option to shop online instead has made consumers more discerning. If you aren’t providing a great experience then consumers will shift their purchases elsewhere. In the United States there have been 9,052 store closures and 3,956 store openings so far in 2019. That means the shakeout continues.

While many retailers have focused a lot of their attention on ramping up their eCommerce offerings at times the basic elements of the in-store customer experience are neglected. How often do you go into a store have a wow experience or even a great one? They are hard to come by.

As Target’s COO John Mulligan told analysts on Target’s 2019 second quarter earnings conference call: "as we've been saying for years, we believe that in-store shopping will continue to be important and account for the vast majority of retail sales for many years to come. However, in a world where consumers have more choices than ever, inferior brick-and-mortar experiences will go away.”

The question retailers should ask themselves is not how can I compete better against Amazon. You can’t beat Amazon at its own game. Instead ask yourself how can I get back to basics and fix the in-store customer experience?

The Retail Apocalypse is Dead: Why Online Sales Will Never Pass Brick & Mortar Sales