From day-to-day living to healthcare and the retail industry, we live in an era where technology has penetrated every segment of the human civilization, and the internet has become a fundamental plaything for small and large businesses. Indeed, e-commerce has become the fastest growing trend over the past decade where traditional retailing is gradually evolving from brick-and-mortar establishments to online business platforms.
With 6,300+ retailers closing shop this year, shopping is naturally deviating away from traditional brick-and-mortar retail outlets to digital channels like e-commerce portals. Indeed, the chatter around the declining future of the traditional retailing model has irrevocably featured as an enabler whenever discussions have hovered around the costs of doing business online. But, is there more to this story?
Despite online business taking the retail industry by storm, offline business is undoubtedly far from dead. However, this doesn’t change the fact that in the long run, it will be extremely challenging for physical stores to compete with the e-commerce powered establishments. The dams are broken and the water is steadily rising- can the offline retailing world find a life raft in time?
Offline vs. online business: What’s coming up in 2018?
Brick-and-mortar retail outlets are still the undisputed owners of this discipline- accounting for more than 90% of the total retail sales in a given calendar year. For instance, between Black Friday and Christmas in 2017, a majority of the shoppers gave a higher prominence to offline shopping, despite online shopping portals stepping it up in terms of discounted pricing and attractive deals. On the flipside, there was a 18% growth in online shopping as compared to a decline of 4 percent in traditional retail.
No wonder, e-commerce won the growth prize in 2017. The primary driver behind the former’s staggering growth was the smartphone. As per the current statistics, people spend upwards of five hours a day on their cellphones, with 90% of the users whipping out their mobile phones in-store while shopping. Furthermore, smartphones have enabled brands like Amazon, Airbnb, Instacart, Uber, and Starbucks to succeed via the cloud.
Blending online and offline: a new age business model
Forget about brick-and-mortar brands transitioning towards online retailing; though ironically, a number of major online retail juggernauts are entering the offline business. As modern customers gain access to a range of innovative technologies and shift their spending patterns, online companies and traditional retailers both have had to necessarily change their strategies and adapt. Consequently, despite headlines of store closures, it is a blend of offline and digital shopping that has been demonstrated to deliver a more gratifying experience to the shoppers.
Today, as more and more brands leverage the emerging trends to their advantage, internet based direct-to-consumer brands are opening physical retail stores to expand and become more accessible to consumers. Amazon, JustFab, Bonobos, Warby Parker, Athleta, ModCloth, Blue Nile and Casper are some of the more prominent examples of companies that have already implemented this business model. Consequently, these companies are now able to take what they have learned from being pure-play online retailers and apply this knowledge across their physical shopfronts.
The way that online retail companies and retailers are now operating is entirely different from what consumers experienced a decade ago. In the future, success will completely rely on the creation and delivery of experiences that accommodate the shoppers’ desire to shop seamlessly from both an online and physical location. Although companies are already making incredible strides in this regard, consumer preferences will continue to shape the direction of this ensuing effort. Thus, adaptability is a necessity for businesses to survive.
