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Despite online growth, here's why stores will still be packed this weekend

Hadley Malcolm
USA TODAY

Over the long holiday weekend, tens of millions of consumers will drive into crowded parking lots, push through hordes of other shoppers and wait on snaking checkout lines to score deals on TVs, sweaters, Start Wars toys and more.

This is despite the fact that retailers have made it easier than ever to shop for discounted merchandise from the comforts of home.

Bargain hunters hustle through the doors of a Target store at the 6 p.m. opening on Thanksgiving Day in Fairfax, Va., Nov. 27, 2014. Despite retailers making it easier than ever to shop online, tens of millions of consumers will stop show up in stores over the holiday sales weekend this year.

Even in this increasingly digital world — where a growing number of shoppers purchase products via computers and smartphones — the bulk of spending still happens at brick-and-mortar stores.

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Only about 17% of the total spending expected in November and December will come from online purchases, according to the National Retail Federation. Overall sales, excluding autos, gas and restaurants, are expected to increase 3.7% from last year to hit $630.5 billion, says the NRF. Online sales are expected to rise 6% to 8% to reach up to $105 billion.

Roughly 90% of all retail sales still occur in stores, according to Forrester Research, which forecasts that online sales will make up 10.3% of overall U.S. retail sales in 2015. That's up from 9.1% in 2014.

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"The store does some things really well that online can't do," says Ken Nisch, chairman of retail strategy and design firm JGA. For instance, they are the place to go for those who want to spend cash or are wary about the security of making online and mobile purchases.

Plus, many people simply like to shop in a physical store, says Jesse Tron, a spokesman for the International Council of Shopping Centers. "There is an inherently social aspect to shopping and that cannot be duplicated anywhere else," he says. "It's equivalent to why I actually enjoy still going to a baseball game. There's something about actually being there."

Retailers welcome the crowds, particularly because getting shoppers in the door provides an opportunity to encourage impulse buys that typically don't happen online. Many companies use maneuvers such as offering gift cards with purchase and building out mobile apps to include detailed store maps of Black Friday deals to lure those shoppers in.

At the same time, retailers are catering to the growing number of shoppers using digital devices for both in-store and online purchases. Walmart, Target and Macy's are all making their Black Friday deals available online hours before shoppers will be able to buy those deals in stores; Walmart is ditching the store-centric strategy of 'doorbusters' plus offering thousands of additional deals online-only starting on Thanksgiving — it's also rolling out its Cyber Monday deals a day early, on Sunday; Target and Best Buy are among those offering free shipping for online orders throughout the season.

On average, consumers say 46% of their holiday shopping — which includes browsing and buying — will be done online, according to the NRF. Some of that may be done at the same time shoppers are standing in store aisles. About 70% of shoppers use their mobile device in stores for tasks such as comparing prices, getting coupons and reading reviews, according to data from the International Council of Shopping Centers' 2015 holiday survey. Far fewer use those devices to make a purchase, as many consumers remain uncomfortable with the idea of buying products through their phone.

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So while retailers are working furiously to improve online shipping capabilities, mobile apps, website user experience and online inventory, many are doing it with an eye toward driving in-store purchases.

After Target saw online sales increase less than expected in the third quarter, Chief Financial Officer Cathy Smith acknowledged on a call with reporters this month the need to improve the company's site experience by saying, "it drives traffic to our stores. That's a key element for us. We know that digital is driving traffic to our stores."

Roughly 80% of Target's customers start shopping on a digital channel, while close to 3% of its sales occur online, says spokesman Eddie Baeb. Customers use its digital tools to do things such as search for products, make shopping lists, look for discounts and buy goods online that they can pick up in a store, he says.

While online and mobile shopping are influencing purchases, the majority of retail sales still come from physical stores.

As online sales started taking off, there was some concern in the retail industry that digital buying could eventually lead to the demise of brick-and-mortar stores. At the time, "technology and e-commerce was feared," Tron says.

More recently, retailers have realized that mobile phones and online browsing can enable in-store purchases, not deter them.

Picking up online orders in stores, a feature many major retailers have started experimenting with, boosts sales by spurring additional unplanned purchases. About three-fourths of shoppers who plan to pick up an online order in a store this holiday season say they'll likely buy more items once there, according to the International Council of Shopping Centers.

"You have to know that the consumer is interacting with your brand in multiple different formats," Tron says. "Online is influenced by the store, the store is influenced by online. Where it's bought doesn't matter. You need to have those multiple channels and touch points."

Hadley Malcolm on Twitter: @hadleypdxdc.

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