Is e-Commerce Going to End Brick & Mortar Stores?

Posted by Joe Musitano on Aug 22, 2016 2:00:00 PM

bigstock-Closed-Sign-Vintage-120168185-2-2.jpgIt's a mighty thought to ponder given the latest data released from JP Morgan, but the state of all commerce is posed to take advantage of today's shoppers.  The internet has opened up a wealth of product knowledge, consumers can research products, compare specs and read reviews well ahead of buying time.  But, will the desire for instant gratification and a hand's on in-store buying experience ever disappear?

JP Morgan reveals that the average employee of a traditional retailer generates $279,000 per year in gross sales for the store. Meanwhile, the average e-commerce worker generates 41/2 times as much.  Hmmm, that's food for thought. But there's more to the story!  

It would be imprudent to announce doomsday for brick and mortar stores because the $3 trillion retail market has plenty to go around.  In fact, Forbes reports that we can expect $150B more to be spent online between now and 2018, in addition to the $300B more to be spent offline in that same time.  So good news, the end is not near.  The game is only changing.  

The roller coaster ride for some brick and mortar retailers may be coming to end if they continue to fight the new age of retail.  There are plenty of physical stores attracting buyers because they've created a niche.  They've given consumers a reason to enter the store and make purchases.  They have most likely kept up to speed with changes in payment technologies and their buyers feel safe swiping credit cards now that EMV is prevalent.

Opportunities exist for brick and mortars to become more efficient and scale distribution, even becoming distribution centers similar to how Amazon is accomplishing it.  Consumers desire a reason to come in to touch, feel, and see before they buy, so those that can offer a gathering place, a place to entertain and educate buyers will have a strong future.  

The convenience of 24/7 shopping online, with huge assortments of products and price points is certainly going to continue to attract buyers.  But, online retailers may face rising shipping costs and new tax obligations.  And as advanced security technologies for online retailers are introduced, consumer confidence should grow and may lure buyers nervous of putting their credit information out in cyberspace.   

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