What Does the Rise of E-Commerce Mean for Brick-and-Mortar Stores?
E-commerce has brought a revolution in the retail industry over the past 20 years. From 0.63 percent of total retail sales in 1999 to 13.3 percent in 2021, online sales have grown significantly. By 2023, the global e-commerce market is expected to reach a value of $6.3 trillion.
The rise of e-commerce has completely changed the way we buy as customers, changing both the traditional retail environment and the notion of venturing outside and discovering for the sake of purchasing. These days, we can order products online and have them delivered right to our doors with a few clicks from the convenience of our homes. Traditional brick-and-mortar stores have been severely impacted by this change in consumer behavior.
This article will take you through the process of how e-commerce affects traditional retail and will use a case study from real-world experience to highlight these points.
The Growth of E-Commerce and its Impact
Over the years, e-commerce has grown at an exponential rate. Its emergence has been attributed to a number of factors, including the growing popularity of smartphones, better internet connectivity, and shifting customer preferences. In the worldwide retail industry, e-commerce websites and online marketplaces have become significant actors. The way people shop has changed due to companies like Amazon, Alibaba, and eBay, which has made the market for traditional merchants extremely competitive.
E-commerce businesses today make up around 3% of all retail establishments; their sales account for 14.3% of all retail sales, and their growth rate is decreasing. In addition to elaborating on these trends, this article highlights the impact of e-commerce on brick-and-mortar stores, including positive and negative impacts.
01. Rising Competition:
Online retailers, e-commerce websites, and big-box stores are just a few of the fierce competitors facing traditional retail firms. Customers are drawn to these competitors’ vast selection of goods, affordable prices, and easy shopping options, which drive away business from established brick-and-mortar establishments.
For example, web sellers like Amazon, which provide a large range of books at low prices, compete with local bookstores. Instead of going to the actual store, many customers decide to purchase digital books, or e-books, because they find online shopping to be more convenient.
02. Analyzing Different Product Options:
E-commerce offers customers many more options when it comes to shopping than a traditional company does. Customers are given the chance to peruse the merchandise while concurrently comparing comparable items on several websites. E-commerce facilitates clients’ ability to compare prices, a task that is difficult for traditional companies. This is the reason why customers go from traditional businesses to e-commerce stores.
For instance, it is easier to compare clothing costs and discounts across many websites, such as Flipkart, Amazon, Myntra, and so on, than it is to visit a physical marketplace and look for clothing at various stores.
03. Changing Buyer Attitudes:
For traditional retail businesses, the movement in consumer behavior toward online shopping and digital experiences has presented a serious problem. Nowadays, more and more customers choose the ease of doing their shopping from home, comparing costs online, and having their purchases delivered right to their door.
For example, a traditional clothing store must contend with difficulties as more consumers choose to peruse and buy apparel online. There is less foot traffic to physical stores since consumers can simply compare prices, read customer reviews, and order clothes without leaving their homes.
04. Changes in the Supply Chain:
Numerous changes in the supply chain have occurred as a result of the growth of e-commerce. The reason for this is that merchants had to adapt to the rising need for quick and efficient shipping. Traditional retailers now face new logistics and fulfillment issues as a result of this shift in the supply chain.
05. Integration Opportunities:
E-commerce has not only had negative effects but has also presented certain opportunities for established enterprises. Integration between online and offline channels is part of it. With the rise of e-commerce, conventional merchants have skillfully created omnichannel strategies that let their customers order things online, pick them up in-store, and return them (if necessary) to the physical store. A few companies that have used an omnichannel approach are Decathlon, H&M, and others.
To wrap it up, e-commerce has had a significant impact on conventional retail operations. To survive in the dynamic retail sector, traditional merchants need to embrace e-commerce, adjust to the changing environment, and offer a seamless online and physical shopping experience. Through comprehension of the benefits and drawbacks of online shopping, conventional merchants can set themselves up for success in a fiercely competitive market.