From Clicks to Bricks:

Why In-person
Retail Is the
Ecommerce Trend
You Can’t Afford
to Miss
Motivated by changing consumer buyer behavior, more and
more merchants are blending online and offline shopping
experiences -- and leveraging flexible solutions to make
payments seamless for their customers.
From Clicks to Bricks: Why In-person Retail Is the Ecommerce Trend You Can’t Afford to Miss
Executive summary
• The next wave of shoppers wants
in-store experiences
• Merging the digital with the physical
• Rejuvenating the retail experience
The easiest story to tell about retail is the one in which online
shopping disrupts and ultimately destroys brick-and-mortar
stores -- the one where no one shops outside their home or
without their devices and where the idea of buying items in
person seems antiquated.
While popular chains like Gap, Lowe’s, and Dollar Tree are
all closing their stores, online purchases still only account for
10% of all retail, making the preferences of new consumers
entering the retail economy even more complicated.1
Generation Z, the group that follows millennials, deeply
understands the convenience of online shopping and will
continue to buy from the online retailers and brands that can
1. The Rise of E-Commerce in the United States, Statista, May 2018.
2
save them time and money. But this group of buyers typically
values experiences over products and is expanding the
definition of the ideal shopping experience to include seeing
and trying items before they buy them, asking in-store
associates for help and advice, and interacting with brands
offline. The result for many emerging digitally native brands
and online-only merchants alike is a reexamination of their
go-to-market strategy toward an approach that aligns with
changing consumer expectations and retail trends.
Instead of scrambling to be everywhere all the time, this
next evolution of ecommerce sees successful merchants
focused on being in the right places. By creating physical
retail experiences that seamlessly merge the digital with
the physical -- from pop-up stores to online appointment
bookings -- merchants can deliver on buyer expectations
and create more opportunities for their business to thrive.
And those who don’t adapt? They risk losing not just today’s
consumers, but an entire future generation of shoppers.
 3

First, meet
Generation Z
From Clicks to Bricks: Why In-person Retail Is the Ecommerce Trend You Can’t Afford to Miss 4

The ecommerce revolution is now in its second decade
and there’s no doubt that consumers have dramatically
changed how they shop. Millennials paved the way for the
rise of online shopping by demanding convenience, a broad
selection of products, and an easy checkout for items bought
online. As the first true digitally native generation, Gen Z gave
rise to an entirely new group of merchants -- digitally native
The prevailing notion was that this new generation of buyers
would continue toward an online-only world. But Generation
Z -- people born after 2001 who now account for one third
of the world’s total population -- have their own set of
expectations and shopping behaviors that don’t always align
with current consumer habits.3 For instance,

98%
vertical brands -- focused on delivering unparalleled quality,
customer service, and customer experience. of Gen Z survey respondents say
they make purchases in a store
some or most of the time.
A digitally native vertical brand (DNVB) is a
brand born online with a strong focus on the They’re also three times more likely to shop in stores
customer experience that often extends to compared to online.4
in-person retail experiences. They typically
control the distribution and promotion
of their products from the warehouse to
customer and they are growing three times
faster than traditional ecommerce retailers.2

2. What is a DNVB?, Digital Commerce 360, April 2018.

3. Gen Z Is Set to Outnumber Millennials Within a Year, Bloomberg, August 2018.
4 What Do Gen Z Shoppers Really Want?, National Retail Federation, March 2018.
From Clicks to Bricks: Why In-person Retail Is the Ecommerce Trend You Can’t Afford to Miss 5

But they’re not rejecting the digital world. Far from it: Gen
Z wants the best of both. This generation is accustomed to Meet me at
the mall?
blending online interactions into their everyday lives, and
they seek to do the same with their shopping -- consider that

47%
How each generation shops7
use their phones when they’re Gen Z Millennials Gen X Boomers
browsing in a store.5

Visited mall in last three months 95% 75% 58% 53%

Perhaps most exciting is that Gen Z shoppers are still early

enough in their consumer lives that they have yet to develop
many brand loyalties. Only 16% report that they shop one Texted friend for an opinion while in-store 57% 37% 28% 23%
particular store for clothing, and 19% say they shop only one
store for health and fitness products.6 Point being: There are
a lot of opportunities for online merchants to attract Gen Z
Bought an item online while in-store 13% 24% 19% 8%
shoppers now and establish long-term relationships.

Obtained digital coupon to use in-store 37% 33% 40% 36%

5. What Do Gen Z Shoppers Really Want?, National Retail Federation, March 2018.
6. Gen Z to Switch the Majority of Purchases to Retailers that Provide the Newest Tools and Channels,
Accenture, 2017.
7. Gen Z Shopping Behaviors Support Retail Real Estate, ICSC, September 2018.
 6

The new ecommerce

trendsetters
From Clicks to Bricks: Why In-person Retail Is the Ecommerce Trend You Can’t Afford to Miss 7

This year, the number of global Gen Z consumers will leasing storefronts, the startup has also taken advantage Those merchants that insist on staying online-only may end
surpass the number of millennials, with the cohort of more innovative pop-up shops, including a one-day up losing ground and market share to brands that prioritize
representing 32% of the population.8 The size of this event at the original Shake Shack stand in NYC last May meeting Gen Z out in the real world.
upcoming generation is impressive and so, too, is to promote a shoe partnership with the fast-food chain.
their spending power. Marketing research firm Barkley
estimated that Gen Z already accounts for Other online merchants are leveraging the rising interest
in modern markets (think holiday markets, but year-round)

$143B
in direct annual
spending.9
These consumers represent a wealth of opportunity for
merchants. And when it comes to catching their attention
with physical and online initiatives, several brands are already
leading the way. The sustainable online shoe brand Allbirds
is a prime example, cultivating a fan base interested in more
socially conscious companies. The company debuted stores
in New York and San Francisco last year and plans to open
additional locations in the US and the UK. In addition to
that typically feature multiple, rotating pop-ups inside
malls or traditional department stores. In fact, where mall
developers used to turn to real estate brokers for potential
tenants, many are now looking at Instagram to pinpoint
emerging direct-to-consumer brands that could benefit
from a small, physical footprint.
These trends are causing merchants to reexamine what it
means to be omnichannel, but they’re especially relevant
to those who have yet to explore physical retail. There’s no
right answer when it comes to physical stores, but one of
the keys is offering connection points in the right places,
and experiences that can fulfill a consumer’s desire to
try, compare, and shop products both online and offline.

8. Gen Z Set to Outnumber Millennials Within the Year, Bloomberg, August 2018. Survey methodology in link.
9. The Power of Gen Z Influence, Barkley, January 2018.
 8

A new approach
to retail stores
From Clicks to Bricks: Why In-person Retail Is the Ecommerce Trend You Can’t Afford to Miss 9

Both online and brick-and-mortar merchants

are finding innovative ways to create more
cost-effective physical locations.

Pop-ups Temporary retail locations that offer in-person shopping for a limited time Alibaba, Amazon, Calvin Klein, Allbirds

Small-format Smaller versions of existing stores, usually catering to urban shoppers IKEA, Target, Kohl’s, Sephora

Guide shops Retail locations where prospective customers can make an appointment, Bonobos, Modcloth, Warby Parker
see or try on their wares, then place an order online and have their
purchases delivered the next day

Retailer activations Processes by which consumer interest is generated by allowing Casper and Hunter Boots at Target,
customers to use a product or experience in a service HelloBello baby products at Walmart
 10

The Braintree
advantage
From Clicks to Bricks: Why In-person Retail Is the Ecommerce Trend You Can’t Afford to Miss
As virtual storefronts continue to spill over into the real world,
a flexible payments provider is a critical ally in an ever-
changing commerce landscape. At the heart of any transaction,
online or offline, sits a mobile-first, consumer-friendly checkout
that meets consumers’ hard and fast expectation that their
phone should make it easier for them to buy.
Braintree’s In-store Payments solution makes it easy for
merchants to drive in-store initiatives forward and deliver on
consumer expectations. With Braintree, merchants can offer
their customers:
• Seamless in-person payments via
methods saved to an online account
• Ease around in-store pick-ups, returns,
and exchanges
• The ability to make online purchases
with payment methods used in-store
(US only)
11
Merchants can leverage their existing mobile point-of-sale
app or enable an integration via a third-party POS provider.
They can also accept the most common forms of payment
on mobile web and in-app, including credit and debit cards,
PayPal, Venmo (in the US), and other popular digital wallets
like Apple Pay and Google Pay, ensuring that checkout is as
simple as possible.
Even as things change, some of what consumers have
always loved about shopping still stays the same.
A continued interest in physical stores, despite the
increasing convenience of online shopping, means that
converting potential buyers into customers requires a keen
understanding of how to strategically blend the digital and
physical. If merchants can meet consumers in both places
and make it simple for them to transact no matter where
they’re shopping, they can benefit from increased revenue
potential and deeper connections with their market.
About Braintree
Merchants in more than 45 countries worldwide can accept and process payments in more than
130 currencies using Braintree. As a leader in the mobile payments revolution, Braintree believes
payments are about more than getting paid. We provide the commerce tools merchants need to
grow businesses, expand globally, and enable new commerce experiences. And, as a PayPal service,
Braintree uniquely enables merchants to accept PayPal (with over 250 million active accounts),
Venmo, Apple Pay, Google Pay, credit and debit cards, and more in one single integration.

To learn more, visit www.braintreepayments.com

or email sales@braintreepayments.com

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