In a survey released by Colliers in partnership with GlobaData, the consulting firm identified myths, misconceptions, and opportunities in the relationship between brick-and-mortar and online retail in the American market.
Retail expansion is believed to occur through e-commerce, which will be one of the few ways for companies to gain market share. It is necessary to establish an online presence to keep pace with the changes inherent in companies' efforts to concentrate sales in physical stores.
E-commerce's share of global retail
In 2011, 94.2% of consumers preferred physical stores, and only 5.8% chose to buy online. Last year, 90.8% preferred physical stores, and 9.2% chose e-commerce. It is estimated that in 2021, this ratio will be 86.7% for physical stores versus 13.3% for online stores.
Accounting for 10% of global retail (generating US$ 360 billion), e-commerce is far from matching physical stores, which generate US$ 3.2 trillion in annual revenue. For one-third of e-commerce sales, consumers visited a physical store to research the product before buying online, highlighting the importance of managing touchpoints, integrating sales channels, and the power of physical stores in the purchasing decision process.
Some gain, others lose
But don't think that simply "going online" is enough to succeed. It is necessary to innovate, offer more services, and integrate e-commerce with the overall marketing, pricing, and distribution strategy. One of the cases identified by the survey is the giant Macy's, which lost 3.4 million customers to its competitors due to a poor experience in its online and physical stores. The study asked former Macy's customers why they had abandoned the brand. 18.7% of them switched to Amazon (ranked 5th on the list), and the rest chose traditional North American retail brands. All five of the top retailers that gained Macy's customers have physical stores.
Visit https://www.macys.com/ and http://shop.nordstrom.com/ and compare for yourself.
Decline in visits to physical stores
The survey presented a startling statistic. In the world's largest economy, traffic to physical stores fell by 50% over the last six years. In 2010, American physical stores received 34.3 billion visitors per year; in 2016, that figure fell to 14.2 billion. During the same period, consumers spent 33% more per week on e-commerce. See the comparison chart:
The survey clearly reveals the reasons why online stores are gaining ground. If online stores can deliver an engaging and positive shopping experience, they will certainly gain more space in consumers' minds, but online experiences have surpassed them in quality and scalability.
Why won't e-commerce put physical stores out of business?
Last-minute gifts, fresh produce, meat, cigarettes, energy drinks, alcoholic beverages, suits, technical products, etc. Many product categories will be difficult to buy online. Others will be difficult to buy in physical stores. There will always be room for both sales channels.
It is time for retailers to rethink the future and develop a shopping experience that gives consumers a reason to invest more time and money in in-store experiences. This is a constant consideration for online stores
