Given the continued rapid growth of online shopping it might seem crazy to suggest that the era of e-commerce is coming to an end. Yet, while we are used to talking about e-commerce as a separate thing – isolating statistics for digital transactions versus brick & mortar same-store sales – it is increasingly clear that these are becoming distinctions without much of a difference.
For consumers, it’s simply “commerce” and retailers that want to thrive, much less survive, need to fully embrace a one brand, many channels strategy.
At the annual conference historically focused on digital commerce – shop.org – speakers mostly ignored online shopping as a stand-alone concept. Instead, many emphasized the importance of brick & mortar stores in delivering a remarkable customer experience.
Moreover, the majority of technology providers in the Expo offered solutions that were very much anchored in online/offline integration or leverage, not e-commerce optimization, as was true in the past. Rather than buying into the retail apocalypse narrative and seeing brick & mortar stores as liabilities, most were clearly in the camp of believing that stores were (wait for it) assets. Physical retail might be different, but it clearly is not dead.
Notably, Mark Lore from Walmart/Jet spoke of the need for retailers to be channel agnostic and highlighted how Walmart’s stores give the brand a distinct advantage. TechStyle CEO, Adam Goldenberg, showcased statistics on how Fabletic’s overall brand performance has been enhanced through the opening of stores and on how the merging of cross-channel data gives them an edge.
Kohl’s spoke of the role of mobile as a constant companion in the shopper’s journey from online to offline (and vice versa). While using somewhat different language, numerous other speakers acknowledged that the customer shops everywhere and the best retailers need to meet them where they are. Clearly, more and more, it’s just commerce now.
Of course, the lines have been blurring for years and study after study shows that a well integrated shopping experience across channels is what customers’ desire and what often determines a brand’s ultimate success.
Amazon and other digitally-native brands’ increasing investments in physical stores serve to underscore this growing reality. Those of us who are familiar with retailers’ customer data know that typically a brand’s best customers are those that shop and/or are heavily influenced in both digital and physical channels. We also know that opening stores drives increases in e-commerce in that store’s trade area, just as closing a store often leads to dramatic declines in online shopping. It is all just commerce.
This realization does not negate the fact that a meaningful percentage of shopping occurs in a purely digital fashion (particularly downloading books, music and games). It does not minimize that Amazon has achieved a total share of retail rapidly approaching 5% almost entirely without a physical presence. But as we move ahead it is important to realize the significant contributions to what we label “e-commerce” that is derived from traditional retailers online divisions.
It is important to recognize that Amazon will struggle to maintain out-sized growth without deepening their investment in brick & mortar. It is critical to grasp that digitally-influenced physical stores sales far exceed sales rung up online.
Ultimately, it is essential to realize that it is rarely an online vs. off-line battle, but a struggle that is won when we accept that it’s all just commerce and strive to bring the best of offline and online together on behalf of the customer.