There has long been a debate about the impact that eCommerce will have on the traditional brick and mortar retail. While almost all believe that eCommerce sales will continue to encroach on sales through physical storefronts, not everyone projects only doom and gloom for “real world” retailers.
Those that believe in the long-term viability of brick and mortar shopping point to examples of e- retailers like Amazon opening physical stores. They argue online shopping will never be able to replicate the emotional connection and tactile experience that many consumers prefer.
Industry Winners and Losers
These brick-and- mortar optimists will be heartened to learn that, according to a pair of recent studies by PWC Global, retail sales from physical stores outpaced online sales last year in most industries.
However, it was not all good news for these traditionalists. In at least two industries surveyed, ecommerce transactions have become the standard. There was also an overall increase in online sales across all industries.
Online Industries Surging Ahead
Customers generally preferred to conduct research and make purchases for media including books, music, movies, and games through online channels; 60% of those who research these products online are also apt to purchase online.
Results in these product categories are influenced by shifts in consumer preference – away from physical media and toward digital methods. Recent statistics show an online shopping popularity gain of 10% in 2016 alone.
A close second in this race goes to consumer electronics and computers; also trending right around 10%. But one of the most impressive trends is the move from desktop to mobile, with some industries showing adoption rates in excess of 30% (e.g., Low Cost Carrier Airlines reported that 66% of reservations are now booked through mobile devices, compared to nearly half that number just two years prior).
Brick and Mortar Retailers Diversify Strategies
Grocery retailers are definitely seeing an upsurge in online shoppers, but the majority of their consumers still prefer shopping in person. Smelling the oranges, squeezing avocados, and thumping the melons simply cannot be accomplished via computer, but the instant gratification that online convenience offers comes in as a close second.
Grocery chains are listening to their customers and those who move in this direction are rewarded with a competitive advantage. Understanding the wants and needs of evolving consumer demands could not be more timely.
With only 21% of consumers following through with their online grocery purchase (research trumps checkout in most current models), it’s safe to ascertain that nearly 80% of the populace is still content pushing their tangible grocery carts vs. clicking into them. This is not to downplay the 312% growth seen in those doing at least some of their grocery shopping online.
Evidence suggests that home improvement and furniture retailers will be the last to focus efforts on online sales. Research for these items indicates a steady 43-45% of customers go online for information, but subsequent purchases only happen about 30% of the time. The analysis concludes that people like to know their options in advance, but they aren’t committed until they can actually evaluate their DIY materials and homewares in person.
Convergence is Inevitable
Simply stated, people are still more devoted to brick & mortar storefronts than they are online options – but this is changing at a rapid pace.
Consumers haven’t lost the desire to sample and interact with products before they buy them, but they equally enjoy the transparency and research the web offers. The majority of the verticals illustrated in the infographic point to an upswing in consumer preference for doing some or all of their shopping online – research as a prerequisite is paramount.
Ultimately, convergence of these two retail platforms is inevitable. It is safe to surmise that omni-channel retail design is necessary. Only then can consumers enjoy the service of offline mingled with the convenience of online. Engaging customers and ensuring conversions will hinge on these truths.
You’ll find more industry specific information in the infographic below.
About the author
Monica Eaton-Cardone is the COO of Chargebacks911, the industry’s leading risk mitigation and chargeback management service provider. Eaton-Cardone specializes in threat metric analysis, technology system development, eCommerce retention, and risk relativity. She is an award-winning entrepreneur and respected thought leader in the payments industry.