Is online shopping killing retail stores?
People have been predicting the end of brick and mortar stores since online shopping became possible, but now with smartphones, Paypal, and drone delivery, are these predictions finally coming true?
Are we seeing the final few years of retail?
Or will people always want to go out shopping?
Well, it depends on who you ask…
Overall shopping trends
When it comes to actually buy goods, online sales still only make up a fraction of overall purchases. Only about 12% of global sales are made online, so why do people think physical stores are in decline?
One reason is the speed at which online shopping is increasing.
Online purchases are growing three times faster than high street shopping, and this trend makes people think the internet will soon take over.
In reality, however, although online shopping is growing, it still has a long way to go.
The most optimistic estimates suggest it will be another five years before online and retail shopping are equally matched when it comes to consumer spending.
Why people prefer online shopping
That’s not to say people don’t prefer to shop online.
Buying with a click of a button is so much more convenient than the time-consuming act of having to go out and look for something.
Many of us are too busy to go searching around town or a shopping mall for a potato masher, but a quick search on Amazon or eBay, combined with next day delivery, will have us eating mashed spuds for dinner tomorrow night.
Online items are often less expensive too.
Sellers don’t have to worry about paying rent on premises or paying staff, so those savings are passed onto the consumer. Add to that great online deals and offers, and a shopper can save a lot of money by buying online.
A recent study found that 51% of people in the UK prefer to do their shopping online, so what’s with the discrepancy? If the majority of people prefer to shop online, why do online purchases still only make up a tenth of overall sales?
Why the fashion industry is different
The fashion and textile industry is a perfect example of why people still leave the house to go shopping.
Despite the convenience, variety, and bargains of online shopping on offer, consumers still want to see what they’re getting, to actually hold it in their hands.
Physically holding something gives people a connection to it, and this is especially true of clothes. 56% of shoppers gave seeing/touching an item first as the main reason they go to a retail store.
Trying on clothes first to see if they fit and how they look is, to many, simply common sense.
Over two thirds (70%) of consumers are still buying fewer than half of their clothes online, with men surprisingly more picky than women.
For this simple reason, it’s safe to say that retail shopping for the fashion and textile industry is safe from the threat of e-commerce.
What does this mean for the future of business?
Online shopping has been around for a couple of decades now, but still only makes up a fraction of overall sales.
If we continue with this growth projection, it will still take years for it to overtake physical retail – and that’s assuming it doesn’t plateau.
For the big retail brands, having a physical shop people can enter will always be profitable, especially for clothing stores.
And it’s not a case of choosing between retail and online.
Studies have shown that within six weeks of opening a new location, a retailer will see online traffic from local residents increase by more than half.
This suggests that people are going into the store, seeing something they like, maybe trying it on, and then going home and buying it, either because they want time to think about it, they want a different size, or it’s cheaper online.
Combining physical stores and online sales may just be the future of commerce, especially for the fashion industry.
A guiding hand through online and retail sales
The future is uncertain for online sales.
Consumer trends, developments in technology, or unexpected events can change the game for everyone – or just for your small business.
We can help guide you through the uncertain waters of the apparel industry.
With decades of experience and our supply network reaching across the world, we have the ways and means to help take your business to the next level.
If you would like to know how we can help you and your business plan for the future and make the most out of both retail and online commerce, then contact us today.
One of our friendly and experienced staff members will be happy to answer any questions you may have.