2025 State of Marketing Report for Brick-and-Mortar Retail

Despite the meteoric rise of e-commerce, brick-and-mortar retail still holds a significant place in the global market. These physical stores—ranging from local boutiques to big-box chains—contribute substantial revenue, support local economies, and create jobs. According to research by the National Retail Federation, offline sales remain a majority of overall retail spending in many developed markets, with consumers citing benefits such as immediate product access, hands-on evaluation, and in-person customer service.

However, the sector has faced serious challenges over the past decade: the convenience of online shopping, the competition of digital marketplaces, and shifting consumer behaviors. Many retailers have diversified their strategies, introducing “buy online, pick up in-store” (BOPIS) options, loyalty programs, and personalized in-store experiences to remain competitive. Retailers that successfully integrate their physical presence with digital channels often see stronger brand loyalty, higher average order values, and deeper relationships with their communities.

Market Size and Growth Rates

Retail’s share of the economy varies by region, but the sector as a whole remains massive—billions of dollars flow through physical retail locations each year. Although e-commerce has been capturing a growing slice of the pie, brick-and-mortar still commands a large percentage of global consumer spending. In certain categories—like groceries, luxury goods, and large appliances—the offline channel continues to dominate, partly because customers prefer to see and try products before purchasing.

Growth rates for physical retail have slowed in some developed markets where e-commerce penetration is high. Yet in many emerging markets, traditional retail still thrives due to infrastructural limitations around online payments and logistics. Urbanization trends, store format innovations (e.g., micro-stores, pop-ups), and evolving consumer preferences—particularly around experiential retail—drive opportunities for retailers willing to adapt.

Major Players and Key Sub-Sectors

The brick-and-mortar universe includes:

• Department Stores: Large-format outlets offering a broad range of merchandise—often clothing, home goods, and cosmetics under one roof.
• Grocery and Supermarkets: Chains and independents focusing on everyday food and household essentials.
• Specialty Retailers: Boutique shops specializing in niches like electronics, sporting goods, fashion, or beauty.
• Big-Box Stores: Large, warehouse-style outlets providing competitive prices on volume-based goods (think Costco or Walmart).
• Discount and Thrift Stores: Retailers emphasizing low price points, often through bulk buying or donated inventory.

While retail giants with thousands of locations still dominate headlines, local stores and independent boutiques have found niches through personalization, community focus, and curated product selections. Pop-up shops also make headlines as a short-term retail strategy—brands use them for product launches, marketing events, or testing new neighborhoods without committing to long-term leases.

How External Factors Shape Brick-and-Mortar Retail

Consumer spending power, job markets, and interest rates all affect retail sales. When the economy is strong, shoppers are more likely to make discretionary purchases in categories like apparel and luxury items. Recessions, on the other hand, can drive consumers toward discount stores or price promotions at mainstream retailers. Additionally, public health events (like pandemics) or local ordinances (such as lockdowns or restricted store hours) can dramatically reduce foot traffic and force retailers to pivot.

In urban areas with high population density, physical retailers might thrive if they offer convenience and immediate gratification. Meanwhile, rural locations can struggle unless they provide specialized merchandise or a unique in-store experience. City zoning, consumer demographics, and competition also dictate where retailers choose to open stores and how they tailor their product assortments.

Consumer/Buyer Persona Insights

Who Shops In-Store?

Brick-and-mortar retail attracts a wide variety of shoppers:

1. Everyday Necessity Shoppers: Individuals buying groceries, household supplies, or daily essentials. They often prioritize convenience, location, and price.
2. Fashion and Lifestyle Seekers: Consumers looking for apparel, cosmetics, or luxury items. They value store ambiance, brand discovery, and personalized service.
3. Experience-Oriented Customers: Shoppers wanting an immersive environment—whether it’s trying out new products, attending in-store events, or seeking hands-on expertise.
4. Bargain Hunters: Those drawn to clearance racks, discount stores, or outlet malls. They’re motivated by price, sales, and the thrill of finding deals.
5. Community and Local Supporters: Individuals who prefer independent shops, farmers’ markets, or local boutiques, valuing neighborhood connections and unique assortments.

Demographics and Buying Motivations

Demographics can vary dramatically depending on store location and product category. College students might frequent thrift stores or discount retailers, while affluent suburbanites might prefer high-end department stores. Additionally, generational differences play a role: while younger consumers are comfortable shopping online, they often visit physical stores for social experiences or product validation. Older consumers may prefer in-store shopping for its familiarity and immediate gratification but can be swayed by convenience or loyalty programs that align with their lifestyle.

Key motivators for in-store purchases include:

• Tangibility: The ability to touch, see, and try products before buying.
• Instant Gratification: No waiting for shipping—customers can walk out with goods in hand.
• Personalized Service: Associates, product experts, or personal stylists offer recommendations and tailored help.
• In-Store Atmosphere: Ambiance, merchandising displays, and brand storytelling that elevates the shopping experience.

Messaging Differences in Brick-and-Mortar Retail

Brand messaging must address both emotional and practical considerations. For instance, a high-end boutique might emphasize exclusivity and craftsmanship, while a grocery store could highlight freshness and local sourcing. In areas saturated with big-box competitors, smaller retailers may lean into a warm, communal experience, unique product lines, or curated selections. Effectively conveying these points—through signage, store layout, advertising, and staff training—helps differentiate a retail brand from its peers and online-only alternatives.

Key Marketing Challenges & Pain Points

The Rise of E-Commerce

Online marketplaces offer abundant choices, often at competitive prices, with the added convenience of home delivery. As e-commerce continues to grow, brick-and-mortar stores must justify the benefits of in-person experiences. Showrooming—where a consumer tests a product in-store but later buys it online at a cheaper price—is another hurdle.

Shifts in Consumer Behavior

Today’s consumers are more selective about what they purchase in-store versus online. They might prefer to buy staple products online, reserving in-store visits for items that require testing, comparison, or immediate possession. Younger demographics, in particular, prioritize tech integration and expect a seamless transition from a retailer’s website or social media to its physical location.

Operational Costs and Thin Margins

Physical retailers often face high rental costs, staffing expenses, and inventory management complexities. Simultaneously, price competition—both from other brick-and-mortar stores and online outlets—puts downward pressure on margins. Seasonal fluctuations, stock overhang, and unpredictable foot traffic add layers of risk. Finding the balance between operational efficiency and an appealing customer experience remains a continuous challenge.

Adapting to Omnichannel Expectations

Consumers increasingly want the option to shop online and pick up in-store or buy in-store and have items delivered to their homes. Meeting these demands requires robust inventory synchronization, trained staff, and technology integrations that ensure a unified view of customer data. Many retailers struggle to make this pivot effectively, resulting in inconsistent experiences or customer frustration.

Trends in Consumer Behavior & Buyer Journey

Omnichannel Shopping Journeys

Research by various retail associations shows that most shoppers now move fluidly between online and offline channels. They might research product reviews online, check store inventory on a mobile app, visit the store to try items, and then finalize their purchase online (or vice versa). Ensuring consistent pricing, promotions, and brand messaging across these channels is critical for maintaining trust and capturing conversions.

Focus on Experiential Retail

To compete with the convenience of e-commerce, many brick-and-mortar retailers are prioritizing experiences that can’t be replicated online. Examples include in-store demonstrations, tasting events, product customization stations, or interactive displays. These encourage longer store visits, higher engagement, and word-of-mouth promotion. Even basic amenities like cafés, lounge areas, or children’s play zones can drive repeat foot traffic, transforming errands into leisure activities.

Personalization and Loyalty Programs

With the growing importance of customer data, physical stores can tailor promotions, product recommendations, and event invitations to individual shopper profiles. Loyalty cards and mobile apps capture purchase histories and preferences, enabling real-time offers or targeted communication. When done well, this personalization feels helpful rather than invasive, boosting sales and customer satisfaction.

Retail-as-a-Service

An emerging trend sees retailers renting out shelf or floor space to smaller brands, creating a “marketplace” feel in brick-and-mortar environments. This arrangement benefits small brands by providing exposure and benefits larger retailers through fresh product assortments and potential new audiences. The fluid nature of such arrangements can keep store layouts and offerings dynamic, encouraging repeat visits.

Most Effective Marketing Channels

Local Search and Directories

Potential customers frequently use search engines or mapping tools (like Google Maps or Apple Maps) to find nearby stores, compare operating hours, or check in-store inventory. Strong local SEO—including up-to-date addresses, store hours, photos, and reviews—helps retailers attract this foot traffic. Claiming your business on local directories (such as Yelp) and maintaining consistent NAP (Name, Address, Phone) information across the web is vital.

Social Media and Influencer Collaborations

Platforms like Instagram, Facebook, and TikTok can boost awareness of store events, new product arrivals, or seasonal promotions. Retailers often collaborate with local influencers to generate excitement, post live stories from inside the store, or host exclusive meet-and-greets. These partnerships can amplify brand visibility and encourage fans to visit in person.

Email and SMS Campaigns

While email marketing has long been a staple, text messaging is growing in popularity for flash sales or time-sensitive offers. Segmenting lists by purchase history, location, or preferences ensures that messages remain relevant. For instance, highlighting upcoming in-store workshops for DIY enthusiasts or announcing a VIP sale to the loyalty program’s top spenders can drive both revenue and loyalty.

Print Advertising and Direct Mail

Traditional channels like newspaper ads, flyers, and direct mailers still have value—particularly when targeting local neighborhoods. Shoppers may retain coupons or store circulars for weekend visits. Luxury retailers often use high-quality direct mail catalogs or invitations to exclusive events, reinforcing an upscale brand image and driving traffic from high-value clientele.

In-Store Promotions and Signage

Eye-catching window displays, well-placed sale signage, and limited-time offers remain effective at converting window shoppers into paying customers. Retailers also use cross-merchandising strategies (e.g., placing related products side-by-side) to boost impulse purchases. Digital signage, interactive kiosks, and QR codes can further engage tech-savvy consumers, bridging the gap between online information and physical shelves.

Content & Storytelling Strategies

Types of Content That Resonate

• Behind-the-Scenes Stories: Showcasing how products are sourced, curated, or designed. This fosters a sense of transparency and brand authenticity.
• Customer Success & Lifestyle Content: Real-life testimonials, user-generated photos, or style lookbooks demonstrating how products fit into everyday life.
• Educational Articles and Tutorials: For stores selling tools, crafts, or kitchenware, how-to guides or recipe cards can inspire customers to make purchases.
• Event Highlights: Images or videos from in-store workshops, trunk shows, or community fundraisers encourage others to participate.
• Local Community Features: Collaborations with nearby artisans or highlighting local talent can position the store as a community hub.

Building an Emotional Connection

Physical stores have the advantage of meeting shoppers face-to-face and offering tactile experiences. Leveraging these encounters to forge emotional bonds with customers can build lasting loyalty. Whether it’s a friendly greeting at the door, staff who remember a shopper’s name, or an inviting atmosphere that feels like a second home, these personal touches create a sense of belonging and trust that purely online channels often struggle to replicate.

Championing Social and Environmental Responsibility

Many consumers now expect brands to stand for something beyond profit. Brick-and-mortar retailers can highlight ethical sourcing, donation programs, or eco-friendly initiatives in their in-store displays and marketing content. For example, a clothing retailer might showcase organic fabrics or fair-trade craftsmanship, while a bookstore might host author talks on social issues. By aligning with causes customers care about, retailers deepen emotional resonance and can differentiate themselves from commodity-based e-commerce sites.

Technologies & Tools Shaping Marketing

Point-of-Sale (POS) Systems with Analytics

Modern POS solutions track sales data in real time, capturing details like SKU performance, peak shopping hours, and customer purchase histories. This allows retailers to manage inventory more efficiently and identify top sellers or slow-moving stock. Integrating POS data with CRM systems supports personalized marketing outreach, such as automated emails triggered after a certain number of purchases or suggested add-ons based on purchase patterns.

Beacons and Location-Based Marketing

Retailers can place small beacon devices within stores to detect nearby smartphones running the brand’s app (or with Bluetooth and location services enabled). These beacons can send push notifications about specials or guide shoppers with personalized recommendations. While adoption has been gradual, location-based marketing can enrich the in-store experience when it’s done with user privacy and consent in mind.

Augmented Reality (AR) and Interactive Displays

Some retailers experiment with AR mirrors or smartphone apps that allow customers to virtually try on makeup or see how furniture would look in their home. These immersive experiences can reduce friction in decision-making and lead to higher sales. For instance, a sporting goods store might let users digitally compare shoe sizes and styles, while a cosmetics retailer enables real-time makeup application demos through a virtual mirror.

Inventory Visibility Across Channels

Advanced inventory management platforms let customers see exact stock levels at a specific store location. This is crucial for click-and-collect services and boosts shopper confidence that an item will be available when they arrive. Retailers can also leverage data analytics to predict demand spikes and place the right products in the right stores at the right time, reducing overstock or stockouts.

Data & Metrics: Measuring Success

Common KPIs in Brick-and-Mortar Retail Marketing

1. Foot Traffic: The number of people entering the store, measured through counters, sensors, or POS transactions.
2. Conversion Rate: The proportion of visitors who make a purchase. High foot traffic with low conversion often indicates merchandising or service issues.
3. Average Transaction Value (ATV): The average dollar amount per sale, reflecting upselling or cross-selling effectiveness.
4. Sales per Square Foot: A key indicator of how efficiently the store is using its physical space to generate revenue.
5. Customer Retention and Repeat Visits: Frequencies of return shoppers, measured via loyalty programs or CRM data.

Using Data to Refine Strategies

Analysts can correlate foot traffic with time of day, promotional campaigns, or local events to pinpoint what drives store visits. If certain product categories spike after a social media post or an influencer collaboration, marketing teams can replicate these tactics in the future. Additionally, layering CRM insights—like average basket size or typical purchase frequency—onto shopper segments can guide targeted messaging, ensuring the right promotions reach the right audience. Over time, a cycle of data review and experimentation fosters continuous improvement.

Competitive Landscape & Differentiation

Major Competitors

Big-box retailers and large department stores often dominate mainstream categories through extensive assortments and aggressive pricing. Specialized boutique stores must compete by offering unique merchandise, personalized customer service, or local exclusivity. Additionally, online marketplaces compete with physical stores on convenience and price. Even digitally native brands have begun opening pop-up shops or experiential showrooms, further blurring the lines.

Strategies for Standing Out

• Outstanding Customer Service: Friendly, knowledgeable staff who provide real-time advice and create a welcoming atmosphere.
• Innovative Store Layouts: “Retailtainment” approaches featuring interactive displays, café corners, or brand storytelling sections.
• Localization and Community Engagement: Tailoring product selections, hosting local artisans, or sponsoring neighborhood events.
• Integrating Technology Seamlessly: Providing free Wi-Fi, mobile scan-and-pay systems, or virtual product try-ons enhances the contemporary retail experience.
• Unique Brand Partnerships: Collaborations with local celebrities, charities, or complementary brands that resonate with target customers.

Unique Value Propositions

A brick-and-mortar retailer’s UVP might center on exclusivity (rare finds or limited-edition products), convenience (prime location and extended hours), or expertise (skilled employees who guide choices). Loyalty programs that offer valuable perks—like early access to sales or free tailoring—can further elevate a store’s perceived worth. Communicating these UVPs consistently, both in-store and online, ensures a cohesive brand identity.

Future Outlook & Emerging Opportunities

Shifting Market Forces

• Hybrid Shopping Models: Expect more retailers to adopt BOPIS, curbside pickup, and app-based checkouts. This meets consumer demand for convenience and safety without sacrificing store visits.
• Mixed-Use Retail Spaces: Retailers may share physical spaces with restaurants, co-working facilities, or entertainment venues, creating multi-purpose destinations.
• Green and Sustainable Initiatives: From reducing plastic packaging to introducing refill stations, sustainability efforts can attract eco-conscious shoppers.

Technological Innovations Transforming Retail

• Artificial Intelligence and Predictive Analytics: Tools that forecast inventory needs, optimize store layouts, or personalize promotions based on historical data.
• Smart Shelves and Automated Checkout: Sensors in shelves can detect stock levels, while cashierless checkout (like Amazon Go) can streamline the shopping process.
• Voice Commerce Integrations: Devices like smart speakers could direct traffic to physical stores for immediate pickups, especially for urgent or highly localized items.

Untapped Opportunities

Even in a digital age, many community-driven or specialized retail categories remain ripe for physical store innovation. Certain product types—like artisanal foods, handcrafted goods, or niche apparel—benefit from in-person discovery and hands-on exploration. Brands can capitalize on social media and local marketing to hype limited-run collections, in-store experiences, or collaborations with local creatives. As urban areas grow, micro-retail spaces (such as kiosks or mobile pop-ups) could also reach time-strapped consumers where they live or commute.

Another potential avenue lies in leveraging data from loyalty programs to expand beyond retail into services—like style consultations, cooking classes, or repair and refurbishment. These services encourage repeat store visits, elevate brand positioning, and increase average spend per customer. Ultimately, the retailers who seamlessly blend convenience, community, and creativity will likely endure and thrive despite digital disruption.

Putting It All Together

At Emulent, we believe brick-and-mortar retail remains vital in connecting communities, providing personalized experiences, and satisfying consumers’ desire to see and feel products in real life. While online competition is fierce, physical stores can carve out a distinct identity through strategic location choices, memorable in-store experiences, and well-crafted omnichannel integrations.