Retail Transformation

Hands holding plastic credit card and using laptop. woman using laptop in home. using laptop internet.

Since the early days of the Internet, pre-dot.com crash, web sites for online shopping have been available. Early Internet users were reluctant to type in their credit card information, but over the last few years online shopping is really taking off. Not only is this format of shopping becoming common but it is kind of expected. Retailers that don’t have at least an online presence are at risk. Retail is transforming and store owners need to adapt.

Over the Thanksgiving holiday season in the US in November 2016, more people shopped online than in retail stores. According to CNBC, the National Retail Federation in the US reports that more than 108 million purchased electronically, while only 99.1 million bought in stores. In 2015, approximately 103 million shopped online while 102 million bought in-stores. Link.

Statista reports increase in online shopping, with most of the increase in using a smartphone to shop.

Infographic: Thanksgiving Weekend E-Commerce Roundup | Statista

There are some factors that are attributing to these trends. Of course, people are more digital today and expect services to be online. And there are more shoppers with access either with computers or smartphones. There are also other factors, One is trust. More people are trusting e-commerce sites because they simply work well, they are convenient, safe and secure. In the early Internet, the last thing many people would do was to put their payment information on some Internet web site they had never heard of. Web sites are getting better with good product description and fast and easy way to check out the products.

Not surprisingly, it turns out that people who make an order and get their products within the same day at a specified time, will order again much sooner than those who get their stuff at an unknown time in the next couple of days. With better logistics management of delivery services, getting products to consumers is becoming faster and easier – this is the Uber effect. Delivery is controlled by real-time software.

Having an online presence – a web site, not just a simple Facebook page, is becoming vital to small store owners if they want to compete with online giants like Amazon or now Walmart. According to MineWise 81% of shoppers do research online before making a purchase decision. Link. The digital natives will first grab their phone if they want something. And if it is not there – it doesn’t exist anyways.

Retailers that serve a local market need not be at risk. They should adopt an offline/online strategy (sometimes called O2O or offline to online or the other way around) and view their store as an online store with a physical showroom. Customers will find them online and this has been shown to drive customers to their local store. However, retailers that emphasise aesthetic approach to store design are able to give customers better experience. Customers will come because they like the experience. And that is something that the global Amazons of the this world cannot easily compete with.

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