Why Go into a Retail Store, When You Can Go Online? The Shocking Results!

Consumers have a choice – Brick & Mortar versus Ecommerce Stores. In this article Pure-Ecommerce will share with you some shocking results to compare how ecommerce is exceeding the traditional form of shopping as you know as the brick and mortar stores.

Ecommerce came into force in 1991 and ever since e-tailers have been working their way into the hearts and minds of consumers. Since people love the freedom and flexibility they have when shopping, the internet has been able to show them the wave of the future – online shopping! Whether they are shopping for household and everyday products or a special gift for a loved one, let’s face it; the world of retail is vast and ever expanding! The change is coming as to how consumers shop and this have become more evident over the past three years. The tables are being turned as e-commerce is giving brick and mortar stores a “run for their money” - literally!

The day of only shopping at your local retail store is over as e-commerce retailers are giving consumers the ability to shop at their online stores from any location and at any time. Brick and mortar stores are unable to compete in this manner. Plus consumers feel they have more “power” of their purchasing decisions as online stores offer them the ability to shop for thousands of products at a time, search for the best deal and even get discount or free shipping.

Tug-of-War Between Brick and Mortar & E-commerce Stores

This is the most evident as we review the holiday shopping season. For instance, during the 2013 holiday shopping season the National Retail Federation reported that even though 45 million people shopped on Thanksgiving Day, brick and mortar sales decreased by 9%. While e-commerce stores saw a boost with online sales up 20.6% compared to 2012 Cyber Monday sales according to the IBM Digital Analytics Benchmark. Another huge trend seen in 2013 was the whopping 54% increase in “last minute rush” orders over the previous year. Conversion rates online increased as well, which means shoppers went online with the determination to BUY versus just browsing.

By examining the data between brick and mortar stores versus e-ecommerce stores leads you to ask yourself the question, “Why go into a retail store, when you can go online?”

There are many reasons consumers are trending to shopping online versus brick and mortar stores. Here are some of the most relevant reasons:
  • Convenience as a consumer does not have to travel to shop for products 
  • Can research the products and find just the right product 
  • Find a better selection of products 
  • Ease of process – no long lines, no “fighting” for parking spots, no crowds 
  • Ability to find vast number of products, specialty products, personalized products 

The holiday season is not the only time in which e-commerce is edging out traditional retails stores as the National Retail Federation now describes e-commerce sales as “Up, up, and away”! E-retail sales in the United States will grow at a compound annual growth rate of approximately 14% over the next four years, topping out at $434.2 billion in 2017, according to a new projection from eMarketer Inc.

The research firm expects 2013 e-commerce sales, excluding travel and ticketing, will reach $258.9 billion, up nearly 15% from $225.2 billion 2012. Annual growth rates will taper off slightly each year following: 14.6% in 2014, 14.2% in 2015, 13.6% in 2016 and 12.8% in 2017, eMarketer says.

They also report mobile devices will play a larger role in generating web sales. The research firm says smartphones and tablets now account for 11% of e-commerce sales. It predicts that share will reach 25% by 2017. EMarketer bases its forecasts on historical data from the U.S. Commerce Department and on data and trend analysis from e-commerce experts.

The Growth of E-commerce

E-commerce already accounts for about 8% of total retail sales in the U.S., is expected to outpace sales growth at bricks-and-mortar stores over the next five years, reaching $370 billion in sales by 2017. By that time, ecommerce is expected to account for a full tenth of all retail sales in the U.S.

What's driving the growth? Forrester cites that one main factor is the use of smartphone and tables. Consumers are no longer having to wait to shop on their home computer or lunch break, they now have the ability to shop at anytime and from any location. Which is boosting the amount of time consumers spend online furthermore increasing the amount they are spending online as well. More than half of U.S. online consumers now have smartphones, and they're using them to research purchases, find stores and to find the best prices available — often completing a transaction directly on the device. Tablet owners are also spending their leisure moments (weekends, evening prime-time hours) shopping online.

Even though, little of ecommerce's growth can be attributed to new shoppers, as only 4 million people are expected to shop online for the first time in 2013, says Forrester. Rather, growth is coming from existing online shoppers who are spending more time and money — and in a wider variety of categories — online. What this is showing is consumers are becoming loyal to online stores, they are pleased with their shopping experience and are continuously spending their money with online retailers. You can also look at this as a huge potential for growth and opportunity to bring even more consumers into the marketplace.

The Future of E-commerce

Ecommerce is NOT just another fade as the future of e-commerce is exceptionally bright! Here’s the predictions for the following industries into 2017:
  • U.S. e-commerce will account for 10% of all U.S. retail sales, Forrester says. That compares with 8% in both 2012 and 2013. 
  • EMarketer, however, predicts apparel and accessories online sales will post the strongest compound annual growth rate, 17.2%, through 2017. 
  • While computer and consumer electronics will grow at a compound annual rate of 15.3%. 
  • Food and beverage will have a growth rate of 17.0%. 
  • Books/music/video will grow at a rate of 16.3%. 
  • Toys and hobby at 16.2%. 

One thing is pretty clear though. The trend is growing clear as consumers will continue to let their fingers do the shopping as they turn to e-commerce stores to fill their virtual shopping carts versus facing bad weather, heavy traffic and cluttered environments, shoppers will go online instead!

For more information about the ecommerce industry visit www.Pure-Ecommerce.com to see the niche market internet businesses in a box available for sale. Start running your own ecommerce business in 2014!

1 comment:

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