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Consumer sales flat, but UBS says this will drive resurgence of bricks-and-mortar stores as shoppers look to “try before they buy”

The number of people shopping online is declining, but bad news for consumer spending could lead to a comeback Physical store UBS analysts say this is thanks to their unique advantages.

Through a survey of thousands of U.S. consumers, the bank found people shopping online Clothing and other goods fell 3% from the same period last year, and have declined compared with the past four years. The findings contrast with consensus and the bank’s previous estimates that online sales would continue to take market share from apparel and apparel retailers that primarily sell products in brick-and-mortar stores.

Now, banks are changing their tune. UBS analysts claimed in a note on Thursday that Online sales slow That could be a boon for retailers that sell primarily in brick-and-mortar stores.

“The market continues to view online migration as a potential major disruptor for Softline companies, as most companies generate the majority of their sales from brick-and-mortar stores. We believe the slowdown in online sales growth (over the next 12 months) will change this argument,” the analysts wrote.

UBS’s change of attitude follows consumer spending Little changes from April to May According to the Ministry of Commerce, the month-on-month increase was 0.1%. In May, in-store sales of clothing and accessories increased by 0.9%, and overall online sales increased by 0.8%.

UBS’s forecast is evidence that consumers are once again recognizing a clear advantage of brick-and-mortar clothing and clothing stores: they allow customers to “try before they buy.”

The bank found that 47% of consumers (up 3% from last year) said the reason they don’t shop online is because they want to try products before buying. UBS found that even when consumers start looking for products online, they purchase them in physical stores 28% of the time.

“Online retailers have yet to find a way to overcome this objection to online shopping,” the analysts wrote. “We believe this is a key reason why online penetration will stop rising.”

Indeed, the disconnect between what is sold online and the real world remains a challenge for online retailers, in the form of an ever-increasing influx of merchandise. return This costs sellers money, creates logistical problems, and accumulates in landfills.

Some major brick-and-mortar retailers are already starting to see a recovery, confirming forecasts by UBS analysts. Abercrombie & Fitch reports Best first quarter ever last month Net sales increased 22% compared with the same period last year. Company stock growth status Beyond Nvidiacurrently the most valuable company in the world in 2023, with annual growth of 374%.

The trend of consumers shopping more frequently in-store than online could also help another mall favorite’s stock surge, American Eagle ApparelInvestors are underestimating their value as the threat from online sales may not be as great as expected, analysts wrote.

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