December of 2017 marked an important milestone in the growth of online shopping and e-commerce. For the first time, the number of consumers who responded that they would be doing their holiday shopping online exceeded those that said they would be going the traditional route and visiting malls and physical shops to do so. The divide wasn’t massive at 55% in favor of the online option according to Deloitte, but it definitely marked a turning point.
So are we headed for empty shopping malls that look like indoor ghost towns? Are brick and mortar shops doomed? Let’s find out!
Putting things into perspective
First off, it’s important to note that while ecommerce is showing greater and faster growth than traditional retail sales, it’s still just a fraction of the overall yearly market. This is because there are some products and industries that either just don’t lend well to an online experience, or where our shopping habits are just too ingrained. New and used cars, groceries, bars and restaurants, and things like fuel sales can’t really take place online, at least not yet.
Understandably, most consumers aren’t willing to buy a new vehicle until they’ve had a chance to take it for a test drive, and we’d rather have the option of picking our own fruits and veggies from the grocery shelves.
Breaking the mold
Our ingrained habits aren’t stopping a few forward-looking entrepreneurs from trying to enter the online sector. You’ve probably heard adverts from companies who will deliver a box of groceries to your door once a week or even every day, complete with instructions on how to prepare them. And while this is certainly an option for busy professionals who still want the chance to make their own healthy home-cooked meals, the majority of us are still perfectly happy to swing past the grocery store on the way home. Only time will tell if that is going to change.
So what are our favorite things to buy online?
Now we know what we’re not so willing to buy online, where is brick and mortar being the hardest hit? Unsurprisingly, department stores are suffering the most. It’s simply human nature to take the easiest option, and it’s a lot more pleasant to research and compare products from the comfort of your home than visiting multiple stores in person. Throw in crammed parking lots, dealing with unpredictable sales staff and crowds, and the fact you can easily return items you decide you don’t want, and it’s not hard to see why the online avenue holds such appeal.
There are also plenty of products that convert effortlessly to online delivery, such as comparing financial investment products, buying tickets for travel or events, and playing lotto’s online. So what can brick and mortar stores do to fight back? It’s all about…
Capturing the Millennial market
One of the standout features of the financially active Millennials is that they prefer spending money on experiences rather than products. This is a big opportunity for brick and mortar stores that are willing to go out of their way to make it worth their customer’s while to actually come into the store. Investing in training staff to deliver a truly exceptional customer experience and offering benefits you just can’t get from an online platform is going to be the key to their survival. Those who stick with the same strategy and level of service they’ve been offering for years are going to lose out, and maybe that’s not a bad thing. Call it survival of the consumer experience fittest, if you will!
What your company needs to learn from this
Just as with any major industry disruption, change is seldom comfortable for everyone. Are some retail staff going to lose their jobs? Undoubtedly. Are some brands and chains going to go out of business forever? Almost certainly.
Those that survive are going to be the ones that adapt to their consumer’s changing tastes better than their competitors. If your business isn’t offering a great online experience yet, it’s time to jump on that fast. Even if you don’t have the confidence or know-how yourself, there are always other avenues to consider. Offering your product on an established platform like Amazon, or offering your customers the chance to get a slice of the pie through becoming brand ambassadors or affiliate marketers are just some of your options.
And if you want to continue operating out of brick and mortar establishments, it’s time to decide what’s going to really set you apart!