Where Will B2C eCommerce Lead Us?

The march of eCommerce continued its pace in 2016. The US Department of Commerce estimates that online retail sales to consumers reached nearly $400 billion in 2016. That is almost a 16% expansion of b2c eCommerce from 2015.

This was the biggest annual jump in online sales in the US since 2014. And while eCommerce enjoys a growing share of the consumer sales pie, physical store sales continue to inch along. Brick-and-mortar sales grew by under 2.6% from 2015 to 2016.

According to Digital Commerce 360, the numbers show that eCommerce accounts for 12% of total retail sales when you factor out the consumer products that can only be purchased physically, such as gasoline. Less than a decade ago, eCommerce accounted for only 5.1% of total retail.

The B2C eCommerce Impact on an “Over-Stored” Landscape

Given that 88% of retail spending still goes to physical commerce, brick-and-mortars won’t disappear anytime soon. But all companies, whether they’re invested in pure physical retail or eCommerce, will have to adjust to the ever-changing retail landscape.

According to Business of Fashion, a combination of eCommerce growth and flagging tourism in New York City has retail and real estate businesses worried. Commercial rents dropped by an average 20% since 2014. Meanwhile, sales at luxury stores along the city’s Fifth Avenue tourist mecca and other neighborhoods fall. And the only retail that appears to succeed are the luxury stores in the wealthiest zip codes.

New York is not alone. America as a whole has too many stores. Business of Fashion reports that one billion square feet of physical retail space must be closed or converted to other uses in order to bring store productivity in line with historical averages. That’s more than 10% of current retail space.

Will There Be Space For You?

Where some businesses see a retail apocalypse, others will see opportunity to adjust. Depending on the kind of business you run, there will always be reasons to maintain physical retail channels as part of an omnichannel strategy.

Customers will continue to use your brick-and-mortar channel when your store:

• Offers a unique, enjoyable shopping experience.
• Affords the opportunity to feel, sample, or size-up products.
• Provides expert advice and insight about the products.
• Is seen as a vital, integral component of their local economy.
• Complements its eCommerce stores with consistent messaging, and accurate pricing and availability.