More Online Retailers Moving to Actual Stores

The age of web-based shopping has fueled brick-and-mortar openings.

November 14, 2016

NEW YORK CITY – Online shopping has changed the buying habits of Americans, but many online-only retailers are opening physical locations to further enhance the shopping experience, the New York Times reports. For example, last month, Amazon.com hinted that it might open convenience stores.

Both big and small companies online are finding that an actual store has allowed them to reach more customers and build their brands. In the United States, online sales will hit $394 billion in 2016, according to Forrester Research. That number is less than 12% of total retail sales, which Forrester Research predicts will reach $3.4 trillion this year.

However, online-influenced sales at brick-and-mortar stores (when a consumer looks online for a product but goes to a store for purchase) will generate an additional $1.3 trillion—around 38% of all retail sales. “Stores are still vitally important,” said Fiona Swerdlow, a vice president and research director at Forrester Research. “But the influence of digital touchpoints is huge.”

The Internet provided companies with an easier way to connect directly with consumers. “In a lot of categories, you’re seeing a significant shift from wholesale, as a percentage of their total revenue, to direct channels,” said Al Sambar, a managing partner at Kurt Salmon. Brands find that it’s easier to have a personal relationship with a customer online as well.

But what those companies are finding out now is that customers also want to visit a physical store. Traditional retailers like Saks are helping shoppers integrate their online experience with an in-person one, while online-only companies are branching out into actual stores. “We’re seeing this convergence where it’s the best of both worlds,” said Steven Barr, U.S. retail and consumer leader at PricewaterhouseCoopers. “It’s centered around extraordinary technology and extraordinary customer service.”

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