In a world of technology innovation, comes convenience and growth but also disruption for some. There are many industries that are yet to be affected by technology if they haven’t been so already, and one that is vulnerable to significant fragmentation is the retail industry.
In the last decade or so, there has been a dramatic incline in customer demand to shop online. Retail companies of all kinds are having to adapt to this more recent customer need and therefore modify their business trajectory to continue their success.
According to optinmonster.com, online shopping is growing so fast that the global online shopping market size is predicted to hit 4 trillion in 2020. And in the US alone, there is expected to be 300 million online shoppers in 2023. That’s about 91% of the entire country’s population. Internationally, eCommerce retail purchases are expected to rise from 14.1% to 22% in 2023 alone. With these predictions in place and the recent complications of COVID-19, it is important for retail companies to acknowledge how all this is affecting their high-street stores. The Business Insider recently posted an article stating that retailers have confirmed at least 7,500 US store closings for 2020. Big names like Stein Mart, Lord & Taylor, GNC, Microsoft, Nordstrom, JCPenney and Victoria Secret are among these retailers.
If you are someone who occasionally likes to go to the mall and shop in-store, you can probably recognize that these brands are among those that we would expect to see, but with more and more store closures, will the mall still be a place to visit in the future?
Amazon is a great example of a company to have had major success in this digital era. They sell all sorts of products through their website and digital app. They even offer Amazon Prime, which is a pay-per-month service for customers who want to get free next day shipping. They have even collaborated with Whole foods, so that customers can order groceries all in the same place.
With Christmas just around the corner, shoppers are expected to spend over $1 trillion in the United States and £2 billion in the UK (muchneeded.com). A majority of this spending will be online, not only because it’s convenient and crowds can be avoided, because of the current pandemic.
So how can retail companies adjust to this digital era, if they haven’t done so already? Firstly, they can upgrade their online platform and ensure attractive shipping methods. They can also improve their online user experience to ensure customers return to their site. In addition, they can contribute to online discount holidays, like Black Friday and Cyber Monday. On Cyber Monday, 53% of purchases came from a mobile device (optinmonster.com) and that’s from millennials alone and speaking of millennials, their preferred support channel is a ‘chatbot’, which some online retailers are providing, so that questions can be answered quickly and efficiently.
With a lack of income for smaller retailers that rely on in-store purchases to pay rent, it is only a matter of time before smaller businesses fail. Retailers who already have a name for themselves still have time to save themselves and appeal to a customer base online but is this enough?
Some individuals like myself, prefer to touch the clothes I am potentially going to buy in person before swiping that credit card, do you?
This is a sad reality for the retail industry but one I will continue to support. Will you?
Chaffey, D. (2019, October 25). The reasons why consumers shop online instead of in stores. Retrieved October, 2020, from https://www.smartinsights.com/ecommerce/ecommerce-strategy/the-reasons-why-consumers-shop-online-instead-of-in-stores/
Christmas Spending Statistics, Trends, and Fun Facts (US & UK). (2020, July 16). Retrieved October, 2020, from https://muchneeded.com/christmas-statistics/
Ouellette, C. (2020, January 03). Online Shopping Statistics You Need to Know in 2020. Retrieved October, 2020, from https://optinmonster.com/online-shopping-statistics/
Peterson, H. (2020, August 17). More than 7,500 stores are closing in 2020 as the retail apocalypse drags on. Here’s the full list. Retrieved October, 2020, from https://www.businessinsider.com/stores-closing-in-2020-list-2020-1