It’s that time of year again where those who are less enthusiastic Black Friday and Christmas shoppers give thanks to companies like Amazon for the blessing of online shopping. With perks consisting of avoiding long lines, having your items personally delivered to your doorstep and not risking your life to grab that last TV, it’s no surprise that online shopping has become a rising contender in yearly sales. In fact, online revenue is expected to increase annually by 17%, reaching a whopping $414 billion by 2018. But how do e-commerce numbers stack up next to those of the reigning champion, Brick-and-Mortar? Has in-store retail met its match? The answer is not as clear as you might think. In addition, domineering eCommerce pioneers such as Amazon are now facing impending competition that could change the future of online shopping.
“The Veteran” Brick-and-Mortar vs. “The Newcomer” eCommerce
With online shopping on the rise and email ads increasingly flooding our inboxes, it may be surprising to know that 94% of all retail sales actually still take place in store. While online shopping excels in ease and pricing, it often lacks in customer experience and convenience; two areas that continue to be dominated by in-store presence. A recent study showed that more than 65% of customers do what is called “webrooming”, researching products online, then purchasing in store. Meanwhile, in 2014 it was estimated that 63% of all potential ecommerce cart items were abandoned. The reason? Statistically, it simply stands that the majority of shoppers would prefer a physical store to an online-only vendor.
The Counter Attack
Despite the overbearing dominance and overall customer preference of retail chains, online businesses have still claimed a sizeable share of retail sales. Amazon, with a very limited physical operation of 7 stores, has taken 5% of the market and succeeded with $94 billion in sales for 2017. Ecommerce sales at Apple and Walmart trailed behind with $17 billion and $14 billion in online revenue respectively.
In response, in-store retailers have made efforts to evolve their shopping experience to be better integrated with their online services. Many, such as Walmart, have made adjustments to their online shipping costs in order to stay competitive with Amazon Prime’s program. Kohl’s CEO Kevin Mansell spoke of their new mobile app as an advantageous companion in the shopper’s journey from online to offline, ultimately increasing their in-store sales.
It’s A Draw
Customers essentially want the best of both worlds and desire a more unified shopping experience across channels. A retail chain benefits most from holding both an online and physical presence, as is proven by Amazon’s and other digital brands’ increasing investments in physical stores. For the future, it will be critical for companies to overlook the struggle of the online vs. offline battle and bring the best of both together on behalf of the customer.
With both physical and online sources being equally important in company success, investing in an online storefront is crucial. If you are a business looking to gain online presence, be sure to contact The Studio to get your channel started.