E-commerce is becoming more and more important in our environment. If this sector continues to evolve in this way, will it become a danger for physical stores?
What is e-commerce?
Basically, e-commerce refers to any transaction conducted online. The phenomenon appeared in the 1980s, but it started growing in the late 1990s with the emergence of online payments and the democratisation of Internet access in homes. In its beginnings, e-commerce was not a great success, because of the fear of investors and apprehension of buyers regarding the use of this new channel. Gradually, as the activity developed and became increasingly reliable, we witnessed the rise of e-commerce in the world.
What are the advantages of e-commerce?
- A website can run around the clock: We often hear e-commerce store timings are now 24/7/365. It is obviously convenient for customers to have an “always open” store.
- The whole world is your playground: You are not limited to a geographical area anymore, as opposed to conventional stores. Especially with the recent emergence of the m-commerce (Shopping on Mobile).
- No travel time and costs: The consumer does not need to spend money on petrol or public transport to see the products anymore, they can now visit the whole store virtually with just a few clicks.
- Comparison-shopping: There are several online services that allow customers to browse multiple e-commerce merchants to find the best prices.
This is not an exhaustive list: We could also mention the abundant information provided, the targeted communication, and many other advantages.
E-commerce: a real threat?
The meteoric growth of e-commerce in the past two decades could sound the death knell for physical stores. Today, e-commerce giant Amazon holds a market capitalisation of more than $1 trillion. Amazon has left behind the traditional retail store giant Wal-Mart, which by the way is valued at around $333 billion. Undoubtedly, the stats are slightly worrying.
So, are clicks overtaking bricks?
Today, every kind of product can be found online. This is a non-neglectable threat to people who are engaged in offline retail business, because their shops and showrooms are often used as trial rooms. Customers come in, view and try out the products, the textures and the colours. Online images, on the contrary, can be misleading. Unfortunately, after having seen and decided what they want, customers get the product code and buy it cheaper online. For the retail shops, it is a waste of manpower, electricity and rent if such an act is performed daily. Customers find online shopping more comfortable, and they have more options to choose from so, naturally, they will turn to e-commerce companies for shopping.
However, blaming the woes of struggling retailers on the success of e-commerce is misguided. E-commerce is not the end of brick and mortar stores, and the following points will shed light on the topic. The expectations of the consumers are becoming clearer, with rising benchmarks. Shoppers are aware of the values being offered, the variety of products that exist on the e-market and the comfort of making purchases right from their living rooms. Retail shops must realise that they need to gear up and get new innovations into their businesses so that they are not left behind in the race for survival.
E-commerce will revolutionise brick and mortar stores. A little competition can only be beneficial. It will allow them to reinvent themselves in a certain way. Even if we are talking about an explosive growth of e-commerce in recent years, with peaks at +20% of the market capital every year, retail is not to be outdone either. The sector, with its $ 26.07 trillion market capital, is doing very well and continues to grow steadily year after year.