Research Briefing: Retailers invest in technologies and value-added services to elevate the in-person shopping experience
In this edition of the Modern Retail+ Research Briefing, we look at retailers’ investments in value-added services and technologies like virtual try-on, which are intended to enhance the in-person shopping experience, as well as their plans for future expansion.
Retailers are transforming stores to deliver enhanced retail experiences
Despite record growth across digital channels like online marketplaces and apps, physical stores remain a crucial part of retailers’ business strategies. According to Digital Commerce 360, e-commerce sales in 2024 more than doubled from 2019. Brick-and-mortar stores offer consumers experiences that can’t be replicated online, like the ability to interact with merchandise and to purchase products immediately, with no additional shipping cost.
Salesforce’s Connected Shoppers Report estimates that by 2026, 41% of consumer purchases will be made in physical stores. This is more than double the estimated volume of purchases made through a retailer’s e-commerce site or online marketplace in 2026. However, it is important to note, that percentage is a small dip in purchase volume compared to 2024, which saw 45% of purchases made in stores.
As a result, some retailers are looking to evolve their in-store offerings to complement their existing e-commerce experiences with value-added services that can’t be replicated online.
Salesforce’s survey found that more than half retailers (59%) said they currently offer repairs and customizations, while 52% of retailers offer self-checkout. Nearly half of retailers (48%) said they currently offer appointment scheduling and 46% of retailers said they host live events. If they don’t currently offer these services, at least a third of retailers for each service said they plan to offer the service in the future.
Retailers that continue to generate a large sales volume through their physical stores, see in-store events and value-add services as crucial points of investment this year, according to executives at Modern Retail’s sibling publication Glossy spoke with on the subject. Ulta Beauty’s chief retail officer Amiee Bayer-Thomas told Glossy that the company plans to add 20,000 in-store events to its 2025 calendar.
“This year we have 70,000 events planned across our stores because we so heartedly believe this notion of human connection is where it’s at,” Bayer-Thomas said. “Eighty percent of the [sales] volume we do is generated in our stores, so brick-and-mortar and that in-person experience is more important than ever.”
For Ulta, in-store events are a great way to convert casual guests who are browsing into shoppers, according to Bayer-Thomas. Most consumers who visit their local Ulta for an event bring a friend or family member and buy at least one item, Bayer-Thomas told Glossy. “[Human connection] does result in purchasing frequency of the guest and, quite frankly, [a strong lever to get the consumer to] choose us,” she said. “[When they attend an event, they] not only purchase what it was that they needed, but they also often discover something maybe they didn’t know they needed.”
The number of retailers’ that offer augmented reality and interactive styling tools in stores is also on the rise, with more retailers planning to offer these services in the future than currently do, according to Salesforce’s Connected Shoppers report. Likewise, the United States Census Bureau found that 600,000 retail jobs were eliminated in the U.S. between 2018 and 2022. Interactive applications like virtual try-on can help stores operate with fewer workers available to man fitting rooms and organize items on the sales floor. Virtual try-on and augmented reality applications can also help encourage more sales conversions, according to data from AI company Perfect Corp. Clinique reported a 2.5 times increase in sales conversion and a 30% increase in basket size by using Perfect Corp’s virtual try-on technology, according to Perfect Corp.
Loungewear and activewear brand Aerie hosted a live shopping event with technology platform Fit Match at one of its Chicago stores to help shoppers virtually try on bras. According to Fit Match, on the day of the event, the store sold 47 units to customers who scanned with Fit Match and made $1,400 in sales from Fit Match shoppers.
Beyond offering unique in-store shopping experiences, physical stores can also serve as fulfillment hubs for customers’ online purchases. According to Salesforce’s report, more than half of consumers (56%) have purchased a product online to be delivered from a physical store, while 52% of shoppers have purchased a product online to be picked up in-store. About a third of consumers (34%) also return their online purchases in store.
As the line between digital and physical retail shopping and fulfillment continues to blur, over half of the retailers in Salesforce’s report currently offer all the in-store fulfillment options they were asked about, and those that don’t, do have future plans to enhance their stores and e-commerce fulfillment capabilities. Currently, 59% of retailers offer online returns in-store and of those that don’t, 34% plan to in the future. 56% currently offer buy online, pick-up in store, and similarly, over a third of those don’t currently offer it (38%) plan to soon.