Beyond Online Shopping – Why Physical Stores Still Matter and How Technology Keeps Them Relevant

Written by Kate Buchnikov

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Nearly a third of shoppers now pick private-label products purely on price, and online buyers weigh health claims over taste, so what happens when that same rational shopper walks into a physical store? Sales expert Ihor Obshta says the answer isn't instinct; it's math. In this interview, he breaks down how AI-driven planograms are turning the humble shelf into retail's most important battleground.

Sales expert Ihor Obshta on merging digital analytics with physical retail

According to a February report from Purdue University, consumers behave differently online and offline. The study found that in-store purchases tend to be more impulsive and sensory – taste, packaging, and visual appeal all matter. Online shopping, by contrast, is more rational: people pay closer attention to product ingredients (59%) and their health goals (57%), while taste drops as a deciding factor, influencing just 37% of buyers.

This behavioral gap poses a difficult question for manufacturers: how do you effectively guide consumer choice when the old "gut feeling" approach – relying on personal experience and instinct – no longer works in either channel? The answer, according to sales expert Ihor Obshta, author of a study on how merchandising influences brand choice, lies in a mathematical approach to retail space. As he sees it, a shopper's decision is often the direct result of deliberate shelf placement.

We spoke with Ihor about why the future of retail belongs to adaptive planograms and artificial intelligence, and how brands are adjusting to the new landscape.

Today, shoppers are increasingly shaped by online experiences – they're becoming more rational and expect personalization. How do your retail space models help brands translate that digital experience into behavior at a physical shelf?

We're seeing the boundaries between channels blur. Even among Gen Z, widely considered the most digital generation, nearly 50% of all spending still happens in physical stores. In that reality, the shelf becomes a brand verification mechanism: if the product display doesn't match the expectations a shopper formed online, the risk of them walking away rises sharply. My models show that today's planogram functions as an "architect of choice," defining the boundaries of consumer attention. Brands need to use data to ensure their physical presence in the Strike Zone complements their digital strategy – otherwise, they'll lose the battle for market share.

E-commerce has trained consumers to expect hyper-personalization: recommendations, promotions, and product selections are increasingly shaped by individual behavior. In your research, you study how merchandising influences brand choice in physical stores. Can we say that the next stage of offline retail is bringing the logic of hyper-personalization from the screen to the shelf?

Yes, but offline hyper-personalization works differently. Online, algorithms adapt offers to a specific user based on their behavior, purchase history, and response to promotions. In a physical store, we usually work not with an individual profile, but with behavioral patterns: how shoppers move through the space, which zones attract attention, and where decisions are made. This is what I explored in my research on merchandising and brand choice. The shelf can become more personalized at the level of a specific store, audience, and shopping scenario. If a category is often bought impulsively, the planogram should increase visual visibility. If the choice is more rational, the layout should make comparison easier and reduce cognitive effort. So the next stage of offline retail is an adaptive shelf, one that uses behavioral data to make the physical store more relevant, intuitive, and closer to the personalized experience consumers already expect online.

How is artificial intelligence reshaping the online sales landscape and the approach to promotions?

In e-commerce, AI is already boosting conversion rates through hyper-personalized offers and more relevant customer interactions. We're also implementing dynamic pricing based on Gradient Boosting algorithms, this automatically applies targeted discounts to products nearing their expiration date, helping protect margins and avoid full write-offs. AI, in other words, turns blanket discounts into a precise profit management tool.

Nearly a third of shoppers today choose private-label products simply because they're cheaper. How do established brands hold on to their customers in that environment?

Retailers often use a tactic called "managed adjacency," placing their cheaper own-brand products right next to category leaders to reduce the cognitive effort of price comparison. To survive this, brands need to use econometric modeling to defend their positions in premium shelf zones. Maintaining high visual prominence keeps a brand cognitively accessible to shoppers even when the retailer is applying intense pricing pressure.

Thanks to your methodology, manufacturers have been able to cut losses by 40% through AI implementation and localization. What's actually changing in store operations and shelf management?

The shift to localized planograms changes the fundamental logic of how a store operates. Instead of uniform standards, the entire network begins accounting for shopper behavior at each individual location. The shelf layout stops being fixed and becomes adaptive – responding to demand, foot traffic, and audience characteristics. Operations are changing in parallel: with AI and computer vision, shelf monitoring happens in real time, and staff respond to issues as they arise rather than after the fact – whether that's an empty shelf, a misplaced product, or a drop in visibility. In a highly volatile environment, the winners will be those who transform the shelf from a storage unit into a dynamic competitive tool.

You've mentioned that Gen Z's path to purchase often starts on TikTok or Instagram, yet 50% of their spending still happens in physical stores. How can a brand "close the loop" so that investments in online marketing don't fall apart at the actual shelf?

This is where we get to a critical point: in 2026, the shelf has become the primary brand verification touchpoint. If a young shopper sees a vibrant product image on social media, then walks into a store and finds it buried in a "dead zone" at floor level – or worse, finds an empty shelf – trust collapses instantly. The shelf is the final stage of the marketing funnel. My econometric models show that physical availability and visibility in the Strike Zone are precisely the "proof of quality" a shopper is looking for after seeing an ad online. To survive in this hybrid reality, brands need to treat their shelf presence as the physical extension of their digital content. Only by ensuring flawless planogram execution and AI-driven monitoring can a company be confident that its most valuable real estate is working at full capacity – converting online attention into real sales and completing the consumer engagement cycle.

Everything can be bought with a single click today. Why do people still go to physical stores? Is it a kind of digital detox, or simply a source of pleasure?

It's really a combination of factors. On one hand, people genuinely need to get out of the house sometimes – the act of going to a store becomes part of everyday life. On the other, the physical experience offers a sense of choice and control: you can look, compare, pick things up, and make decisions on your own terms.

Even for digital natives, the path to purchase often starts online but ends in a store. People come to the shelf to confirm expectations they formed on the internet – and if the product in real life doesn't match those expectations, the purchase simply doesn't happen.

It is a conscious embrace of the “experience economy.” Consumers are increasingly spending not only on products themselves, but also on the emotions, memories, and sense of participation that brands create around them. For companies, this means that value is no longer limited to functionality or price – it is also shaped by the experience a customer associates with the product.