Retail industry is transforming. The birth of e-commerce shopping is changing the way people do shopping. Interestingly, despite the growing number of online stores, brick and mortar stores are relatively doing well as a good number of people still prefer the shopping experience they have in-store, specifically the ability to check and try out the products before buying it.
Online and Brick and Mortar Sales Statistics
The US Department of Commerce Statistics released statistics pertaining to the overall sales of both online stores and physical stores.
For the first quarter of 2019, US retail e-commerce sales totalled $127.3 billion, decreasing by 19.7% from the last quarter sales of 2018. However, e-commerce estimate about 12.4% higher from the first quarter of 2018 whilst total retail sales jumped by 2% during the same period. Sales from e-commerce accounted for roughly 10.2% of the total sales in the first quarter of 2019.
As of May 2019, US retails sales increased by 0.5%, bolstered by a 1.1% appreciation in appliance and electronics store sales. Auto sales jumped by 0.8% whilst grocery store sales remained the same. When it comes to department store sales, figures dropped by 0.7% due to strong competition from online store retailers.
Up by 3.6% year-over-year, retail sales signals a robust economy and is expected to generate an annual retail sales growth exceeding 3%.
Demographics of Consumers in Online and Brick and Mortar Stores
Sales of both online and brick and mortar stores highly depend on the demographics of the consumers. In the research conducted by Statista, it is noticeable that online shopping preference decreases with age. About 67% of millennials choose to shop online compared with only 28% of seniors.
Purchasing behaviour involves digital and physical browsing of products. Most of the time, a consumer would browse for a product online before visiting a physical store to make a purchase. Some consumers may also first visit a store to inspect the product before ordering online. Other more adept buyers can do online research and price comparisons whilst in store.
Why Consumers Buy from Online Stores?
Online shopping gives consumers the ability to compare products and read reviews before deciding on a purchase. The advantages of online shopping include:
- Ability to shop 24 hours a day, 7 days a week.
- Cost-effectiveness. Shoppers can compare pricing and search for the best possible deals before committing to a purchase.
- Time Saver. Consumers do not have to drive to a store, deal with parking, and visit multiple stores in different locations to purchase all the goods needed.
- Convenience. Buyers who dislike crowded shops, long lines to the cashier often prefer to shop online.
- Availability. Some specialty shops often have online stores rather than maintain a physical store.
Why Consumers Buy from Brick and Mortar Stores?
Despite the growing popularity and advantages of online stores, many consumers still prefer to shop the traditional way – through brick and mortar stores. One of the main factors that make in-store shopping preferred by some is the ability to receive the products immediately. Other prefer to shop as a form of social activity – a way to interact with family and friends, an experience which online shops cannot give. Consumers buy from brick and mortar stores because:
- It allows them to physically inspect and examine the product before purchase. This is particularly true for cosmetics, clothes, and grocery items.
- They can get the product immediately and not have to wait for shipping.
- Customer service. Although this is offered by some online shops, being able to talk to a sales representative about a product allows them to make a proper and well-informed decision about their purchase.
- They do not have to pay for shipping costs.
- Consumers do not have to deal with the hassle of returning damaged and wrong items delivered.
- They can easily return a defective item. They can also test it (in case of electronics) to make sure it works before making a purchase.
- Shopping is retail therapy. It gives people the freedom to enjoy with friends whilst shopping. Some even make shopping as a bonding activity like having dinner before or after shopping.
Taking Advantage of Online and Brick and Mortar Shopping Trends
Looking at the market today, it is easy to see that almost all huge brick and mortar stores also have a strong online presence. Small business must find a way to make this happen if they do not want the growing e-commerce industry to dwarf their enterprise. In the article published by Forbes, only about 28% of small businesses have an online presence. Brick and mortar stores will stay if they learn to adapt to the ever-changing shopping behaviour of consumers.
To widen its reach, a business must use the power of the internet to bring more consumers to its stores. Notice the purchasing behaviour of consumers. Most of them become familiar with a product they see whilst browsing online. Creating a simple Facebook page or a basic website that contains your physical store address, contact details, and product description is a good start.
Setting up an online store should not consume much of your budget. Most small business can start off by selling on Facebook or eBay. They can also sell their products through Amazon as a third party vendor before setting up an e-commerce website before they spend good money maintaining an e-commerce website. Business owners should first maximise what they can without the added cost.
The digital age is here. In the data provided by the US Commerce Department, from 2000 to 2018 alone, online retail has exponentially grown by 300%. During the same period, department store sales dropped by as much as 50%.
It is true that shoppers will never abandon shopping in brick and mortar stores, however, consumers are looking for a convenient online alternative. Brick and mortar stores must make use of an excellent combination of branding and marketing, service, and competitive pricing to encourage more consumers to take the hassle of dressing up, driving, and heading to their store to purchase their goods. When retailers fail in this area, many economic factors will be greatly affected. This includes commercial real estate, neighbourhood shopping centres, and jobs.