Despite the fact that there are still more people shopping offline than online, online sales are fast outpacing the growth of brick and mortar stores. This fact has left many people wondering about the future of retail and what it will mean for some of the biggest brands out there.
As the stats in the information provided by Red Brain show, offline stores are still king. Their sales are completely dominating the sales of their online counterparts. Currently, Amazon is the only online retail company that has a place among the top 10 US retailers, and even then it only ranks at 7th place when it comes down to sales.
Walmart, Costco, and Walgreens all rank higher than Amazon, and this is largely thanks to the huge number of sales that take place in their brick and mortar stores every single day.
Another factor that points out that brick and mortar stores are still on top is conversion rates. Someone who enters a physical store is much more likely to make a purchase than someone who goes online to an ecommerce store.
Many companies, such as the huge brands outlined on the page created by Red Brain, seem to have found the winning equation. Kroger is a good example of this, with an in-store revenue of $100 million and an online revenue of $22 million. The future of retail may well lie in a combination of both online stores and brick and mortar ones. This gives shoppers the freedom to choose how they want to shop and stock can be distributed out accordingly.
To maintain a competitive advantage over other retailers, using just one stream may not be enough these days. There are plenty of retails out there that have physical shops but have not yet gone online, and vice versa, there are ecommerce stores that have no physical presence at all. It makes sense then, that it is these retailers that will start to struggle in the near future.
However, there is no getting around the fact that online shopping is rising, and this doesn’t just mean sales that are taking place online. Technology is developing at a rapid pace, and the use of videos and even VR technology is helping to replicate the experience of physical shopping.
Similarly, many online stores are adding social elements to their sites, which can also help to replicate the social element that many people enjoy from physical stores. Artificial intelligence will also play a huge role in the shopping experience of the future, and purchasing online may become a lot more natural.
As always, it is very difficult to predict what the future will look like for retailers. One thing is for sure, however – the digital revolution will demand that retails adapt their strategies to survive in an ever changing world.
Infographic: Red Brain