In 2017, big traditional retail brands such as Macy’s, Sears and Kmart have closed more than 5,000 stores and are looking to close up to 1,000 more stores this year. So, with (increasing) competition from e-commerce, now is clearly not an easy time to be a traditional retailer. Furthermore, sales within physical stores in the U.S. are also reported to be at a standstill, while those of online retailers continue to zoom along at double digits.
Today, we can say that e-commerce is totally a successful trend for retailers. It transforms consumers’ shopping preferences and experiences with the added convenience of one-click solutions, next-day home deliveries and many more attractive features. So, with the various convenience consumers have experienced, e-commerce has pretty much rewritten the arc of the consumer decision journey – causing shoppers to become accustomed to a much greater level of convenience, choice, and accessibility. And looking back, between 2008 and 2013, e-commerce sales grew ten times faster than in-store retail. Hence why, it is not surprising to see a growing number of traditional retailers are starting their own online stores in an attempt to attract customers, as the growth of physical shopping looks set to slow.
The retail e-commerce sales worldwide are projected to grow to 4.88 trillion US dollars in 2021. So in anticipation of this, now traditional retailers are increasingly using online stores to boost their sales and brand awareness. An example of this is a hypermarket brand Tesco, which began their journey as a traditional retailer before moving to its own e-commerce site and later setting up an online store. This increasing presence of e-commerce site not only has extended to the physical product but also to other types of business, such as beverages. Chain-restaurants such as KFC, Domino’s Pizza, and Nando’s which previously sold their food through their physical restaurants are now reaching customers through their own e-commerce sites and fulfilling the orders by home-delivery service.
To sum up, the trend of traditional retailers moving to online stores will undoubtedly accelerate. No, the physical store is not going to be dead. However traditional retailers need to take advantage of this digital age by adopting e-commerce, as it allows retailers to display their products easily across the internet which can indirectly entice customers to buy. Afterall, the fact remains that both traditional and online retailers have one mutual objective which is to bolster sales; no matter from in-store customers or online shoppers.