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DCRN Study 2023:
Is the end of bricks-and-mortar retail looming?
Once a year, the ibi research institute at the University of Regensburg, as the organiser and initiator of the Digital Commerce Research Network (DCRN), conducts a study on the future of commerce. Current market developments and trends are analysed in depth to support retailers in their decision-making. atriga is a partner of the DCRN. This year’s survey focuses on consumer behaviour between consumption and sustainability. We spoke to the head of the study, Nils Deichner from ibi research, about the results.
Mr Deichner, what are the most surprising findings for you from the current DCRN study?
What surprised me most was that consumer behaviour in the different generations, i.e. from baby boomers to Generation Z, does not differ as much as might be assumed. On the other hand, it is not surprising that baby boomers, i.e. those born between 1950 and 1964, are not as strongly represented in social media. Instead, they have the lowest return rates of all generations, while Generation Z has the highest.
What we also noticed in particular are the contradictions within the baby boomer group. Consumer behaviour varies greatly here; this generation does not present a homogeneous picture, in contrast to Generations X and Y. Generation Z, i.e. those born between 1995 and 2009, is again out of line here.
So how do the new low-cost suppliers from China such as Temu & SHEIN and the desire for sustainability fit together at all?
There are two camps when it comes to sustainability, whereby a willingness to change one’s own behaviour in the interests of sustainable action has developed across all generations. On the other hand, Generation X, i.e. those born between 1965 and 1979, and Generation Y, born between 1980 and 1994, are very keen to order from Temu or SHEIN. Sustainable behaviour often fails simply because of money, as products are more expensive on average and so sustainable consumption becomes an issue of doing without, because you have to be able to afford it.
Nils Deichner, head of the current DCRN study by ibi research: “Brick-and-mortar retail can make up points where in-store shopping becomes an experience again.”
How do you explain the success of the D2C trend, i.e. direct online sales from the supplier to the consumer?
When manufacturers address consumers directly, i.e. without intermediaries and platforms, they save costs. They also have direct contact with the buyer and have access to their data. This allows them to control the consumer experience across the entire customer journey. This also strengthens identification with the brand. In turn, buyers benefit from early information on new products, offers and discounts and gain insight into the company. Generation Z is also way ahead here: they follow their favourite brands on social media and can also be encouraged to make a purchase.
Social commerce: What role do social media play today in the overall picture?
For example, more than three quarters of respondents use Instagram daily or several times a day. They share posts there, follow influencers and celebrities, brands, manufacturers and retailers. Even if the generations disagree on the future significance of the various social media, there are numerous starting points for retailers in this area. Above all, intelligent influencer marketing is an increasing success factor.
Let’s take a look at the future of bricks-and-mortar retail: according to your study, 40 per cent of consumers now prefer to shop online, while the proportion of traditional in-store shoppers has more than halved in the last 10 years. How will this end?
In my view, the growth rates of online sales will continue to decline and we are slowly approaching a saturation level. Brick-and-mortar retail can make up points where in-store shopping becomes an experience again. This also includes a little entertainment and show through innovative shop concepts. Last but not least, it is important for everyone involved to make city centres more attractive again, then bricks-and-mortar retail will also have a future.
According to your study, the general conditions for retail companies remain challenging. Do you dare to look into the crystal ball?
That would be presumptuous, as neither the coronavirus pandemic nor the current conflicts could have been foreseen. Neither could we have foreseen the associated consequences, for example in the area of energy costs. And no one could have predicted that interest rates would rise again so quickly and so rapidly. As an economist, I am familiar with many important economic theories, but it is almost impossible to look into the future these days. From a personal point of view, I find the mood in the country a little too pessimistic; I would like to see a healthier balance here in order to be able to master the challenges ahead.
Mr Deichner, thank you for the interview!
atriga service for you: Free downloadn of the current DCRN study “Customer behaviour between social commerce and sustainability” at
https://ibi.de/veroeffentlichungen/2023/kundenverhalten-zwischen-social-commerce-und-nachhaltigkeit
About the dialogue partner
Economics graduate Nils Deichner has been working at ibi research an der Universität Regensburg GmbH since October 2018. Nils Deichner’s research and consulting activities focus on the areas of e-commerce and digital commerce, payment transactions and electronic invoice processing. He is a regular speaker at events on these topics and publishes specialist articles and studies.
About the DCRN
The ibi research institute at the University of Regensburg is the organiser and initiator of the Digital Commerce Research Network (DCRN). The aim of the network is to bring together retailers, manufacturers and service providers from the retail sector, work together with science and research to develop solutions relating to the opportunities and risks of digital transformation in retail, evaluate new technologies and developments and thus provide all players in the retail industry with a sound basis for decision-making: www.ibi.de/netzwerk/DCRN
