January 26, 2018 | New Fire
With all of the Jeff Bezos and Elon Musks of the world, assuming that technological innovations will lead to the complete destruction of the status quo is an understandable trap to fall in. It’s easy to look at the direction that technology is going and assume that nothing will be the same. And by that logic, those prophesying doom for the retail industry make some sense. But after 20 years of e-commerce, there still hasn’t been the long foretold destruction of the brick and mortar retail industry. In fact, the E-Commerce revolution has already shaken up the brick and mortar retail market, just not in the apocalyptic light that is being announced.
It’s also not hard to find closing malls and blame millennials, but most of the data collected on their buying habits have been downright optimistic. With 71% of Millennials preferring to shop in person and only 16% using mobile shopping regularly, the trends for the future of brick and mortar stores are positive. Speaking of trends, growth in e-commerce doesn’t necessarily rob physical retail locations, and they don’t conflict nearly as often as publicized.
While many point to Amazon as an example of the coming takeover of E-Commerce, this is more anecdote than evidence. Yes, Amazon is the 7th largest company in the retail industry, but when trying to find other e-commerce giants, Amazon stands alone. What’s more, even Amazon is aware of the prevalence of brick and mortar. When they bought Whole Foods for 13.7 billion dollars, it was not an idle fancy. Amazon realizes that physical stores are not only still viable, but a necessary component to success. With other e-commerce giants following suit (Bonobos, Warby Parker, etc.), the logic becomes all the more compelling.
Ultimately, things are decided in the numbers, and there is little evidence to show that brick and mortar retailers are seeing a negative impact from e-commerce. And when e-commerce is still making up less than 10% of the overall Retail Market, there is little evidence that brick and mortar is being eroded at all. Instead, this revolution has created a large-scale movement by the top retailers to harmonize physical and e-commerce stores. Brands like Walmart and Target are creating unified shopping experiences that can transition from stores to online, and (more often) move from mobile browsing to stores. Rather than the complete destruction of brick and mortar stores, there is even more emphasis on the consistent value and returns from brick and mortar stores.