Is Ecommerce Driving Out Retail Stores?

eCommerce vs Retail

Is Ecommerce Driving Out Retail Stores?

Observers of the online scene have speculated for years that ecommerce was driving out bricks-and-mortar retailing. They believed the two methods of selling goods to be in opposition. Thought leaders seemed to accept as inevitable the death of physical stores at the hands of online retailers.

Reality: Online and Bricks-and-Mortar Work Together

It is becoming apparent that in-store retailing is not dead. Numerous articles promote omni-channel retailing, a concept that brings all channels together. The idea is that bricks-and-mortar and online work together. Not only are they not in direct competition with one another, but they are actually supporting one another’s goals.

People Like to Shop Both Ways

Researchers have found that online sites drive shoppers to physical outlet stores. People see what they want online and then go to a store to look at it. The tactile experience is important for many shoppers. This does not always translate to actual purchases occurring in the store. Once they have seen it, touched it or smelled it, consumers may still prefer to purchase online.

Returns and Shipping Are Factors in Determining Popularity of Physical Stores

Additionally, some customers want an actual store to be part of the retail mix; returns are easier and require no shipping costs. Moreover, many people like to pick up purchased items at nearby stores rather than accepting the wait times and shipping costs required by many online purchases.

Having Customers Use In-Store Delivery Is a Win-Win

At least half of online buyers have their items shipped to the associated store rather than directly to their homes, according to one article. And half of these buyers make additional purchases while in a store to pick up an item purchased online. Having both a physical and virtual store is a win-win for the retailer and the customer.

Certain Bricks-and-Mortar Stores Are More Vulnerable

Online retailing has indeed affected certain types of physical stores. Products such as books and electronics are easy to sell online. Amazon has proven that a retail store is not necessary to market these items successfully. We have witnessed the result of this firsthand—the decline in the number of traditional bookstores and electronics outlets.

Many Physical Shops Will Always Exist

Certain retail stores, especially those that offer personal services such as hair salons, cannot be replaced by an online presence. Even products that customers can order online, like restaurant meals, still require pickup or delivery from a bricks-and-mortar outlet. There is no Amazon for Chinese takeout.

The Lines Are Blurring. How Do You Measure Online Activity?

It is increasingly difficult to characterize a purchase as either online or in-store. The lines between the two have blurred.

Consider this scenario. A shopper goes to her local mall to by an item after seeing it online. Once in the store, she learns that the item is out of stock. She then orders it online and indicates she will pick it up at a nearby store. How should researchers characterize this transaction?

There are ways to measure and track such activity, and then attribute accordingly. But you need to understand the many layers of omni-channel marketing and marketing attribution. If you do not, it is smart to consider seeking out an agency that understands your marketing and measurement needs.

The Moral of This Story…

In-store shopping isn’t going away. But neither is buying online. Each approach has benefits, and smart shoppers will continue to take advantage of both.