Commerce is an ultra-dynamic industry; it has seen innumerable changes and makeshifts over the decades. But one thing is almost certain, never has the commerce industry seen a paradigm shift like the one our generation got lucky enough to witness: the inception of ecommerce and the subsequent trend of online shopping. Perhaps, the last time there was such a major change was when currency was introduced to supersede the barter system.
When commerce is entering the newfangled digital realm and getting a whole new makeover, our perception of trade and shopping is significantly being altered. In this tale of the success of ecommerce, one question bothers us all: Will we be the last generation to see the existence of physical stores?
More than 40% of the global internet users purchased products online in 2013 and that figure is expected to grow 5% more by 2017. If this is not alarming, look at it from another perspective. 40% of the population with access to internet means more than 1 billion people. Also consider this, in 2013 only less than 40% of the world’s total population had access to internet. In the coming future with more and more people getting access to internet won’t more and more people subsequently buy products online?
Yes, obviously. Trends like mobile commerce growth and digital payments all point to one thing: the success story of eCommerce has only just begun. But will eCommerce be sovereign one day and is that day coming too soon?
Forrester brought out an online retail projections report which predicts that between 2013 and 2018, online sales will yield $414 billion in US alone. Although this figure may sound pretty huge, in percentage it will only reach about 11% of the total US retail sales. Not only that, between 2013 and 2018 money spent online is estimated to reach $150 billion while at the same time, money spent offline is expected to be $300 billion which is double that amount. So the fear of the brick and mortar apocalypse can be put to rest because it is not going to happen any time soon.
One of the main reasons that support the flourishing or eCommerce sites is that they provide best money value. In other words, when it comes to getting a product at its cheapest price, brick and mortar stores can rarely compete with eCommerce vendors.
Not only that, eCommerce vendors make it possible to shop from our homes, offices or virtually any place and all you need is a smartphone and internet connectivity. The home delivery service and return opportunities make eCommerce more preferable than offline buying. In addition to these advantages online buying also gets rid of the need for actual transaction of money because of digital payment facilities. All these merits do put up a strong argument in favor of eCommerce success to continue over the years.
What brick and mortar shops can provide that no online vendor can is the opportunity to see, touch and try out the products you like before actually buying it. No description or review will ever suffice to actual experience through our senses. This is not merely a romantic claim in favor of online shopping. Just imagine trying to buy a perfume online without actually getting a chance to know what it smells like. Although people are buying lots of clothes and fashion accessories online, we all know that it cannot ever substitute buying things after trying it out ourselves.
Saying that eCommerce has killed physical stores is not merely an overstatement, it is downright wrong. Just look around and you’ll know that it isn’t true. You don’t see shops vanishing everyday but new ones coming up. It is true that new eCommerce sites and vendors are increasing too, but that doesn’t prove in any way that physical stores are moving towards extinction.
In 2013, the physical store retail was a $4 trillion market and that was in the US alone. If eCommerce is the ultimate shopping option, we won’t see so many malls around us and even if we do they would have to be empty. The belief that the brick and mortar stores are out of fresh ideas and eCommerce is the new king in innovation is nothing but another misconception. A decade old idea of pop-up shop recently received renewed interest from big retailers. These pop-up shops are temporarily set up retail shops that come in all shapes and sizes and are creative and at the same time engaging.
The advent of online shopping has surely surprised and disappointed many offline physical shops. But many have seen it as a rare opportunity to develop merging strategies like bringing an online presence which acts as online marketing and as a shopping channel.
In the future, once brick and mortar shops succeed in framing new return policies to compete with online vendors and work towards nullifying the pricing differentials, the main advantages of online shopping will reduce in number. If this happens what we will witness is the coexistence of both the shopping media. Of course, there will be adaptations and mergers from both sides, but neither of the parties will exist alone, at least, not in the near future.
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