Can 2020 Witness the End of Brick and Mortar Stores?
Growth of Online Retail Sales
It is fascinating to see that for the first time ever, shoppers are going to online for most of their purchases. One of the biggest game changers was Amazon, literally killing its brick and mortar rivals. E-commerce has become so popular and profitable in the last few years only because buyers have come to realize the multiple benefits of online shopping. Global online retail sales are growing. Nearly one in four online shopper makes a purchase at least once a week. According to an infographic named Global Online Retail Spending – Statistics and Trends and published on the Invesp Blog, online sales are estimated to account for 8.8% of the total retail spending by 2018, as compared to 7.6% in 2016. In the US alone, 10% of retail sales are expected to be made online by 2017.
The retail industry worldwide is divided into two categories, brick-and-mortar and online retail. The online market, on the other hand, is divided into different segments, based on products, where Amazon, Best Buy, Apple, Sears and Staples are among the key vendors.
Smartphones Leading the Growth of Online Shopping
According to a survey published in Fortune in June 2016, as online shopping accelerates, so does the use of smartphones to make purchases. In 2015, 44% of smartphone users made purchases through their mobile devices, compared to 41% a year ago. Industry data suggests that technology is all set to catch up with the impulse buying urge. This should be a wake up call for all retailers, especially those running traditional physical stores and department chains, given that even the bigwigs, like Target and Walmart, reported a slowdown in physical sales growth for 2015. At the same time, data released by eMarketer revealed that Amazon saw a 15.8% rise in sales to a whopping $82.7 billion.
Digital Buyer Penetration Worldwide
Percentage of Total Internet Population
Unrivalled Benefits Online
Conventional wisdom states that customers will choose the virtual over brick-and-mortar mainly because of the price advantage. Most online stores offer prices that are much lower than what you will find at a physical store. However, there is a long way to go for online retail growth.
Another benefit is the ease of browsing through dozens of different websites and a much wider product range at one’s fingertips. To be able to research as many products at physical stores, it could take forever. So, without spending a penny on travel or wasting time simply walking from store to store, you can compare products across various parameters, without being hounded by salesmen, and make an informed decision.
Is Online Retail Ready to Take Over the Future?
According to an article published on The Huffington Post in January 2016, “mobile devices will take a more pronounced role starting this year, not only as payment devices (mobile wallet), but more ingrained throughout the purchasing process.” It is this shift in consumer approach to purchasing items is the biggest reason for the switch from in-store to online shopping.
Believe it or not, we are just scraping the surface in terms of online shopping. With better in-store pick-up integration, personalized shopping experiences and quick checkout processes at the point of sales we are likely to see continued growth, says an expert from online retailer, HomebrandsUSA. With the rise of the millennial generation, people looking for better tech solutions for everyday needs and a growing blend between the digital and physical worlds, we are only likely to see a rise in people preferring to shop online.
Realistically speaking, brick-and-mortar stores might need to add something extra to compete with the unending purchasing thrust created by the online sphere. If they can satisfy customers with mobile-friendly websites and informed content, while reinventing themselves to meet the changing customer preferences and attitudes, they might just last a while longer.