As E-Commerce Grows, Larger In-Store Fulfillment Areas Are Needed

Online order management may require up to one-third of in-store space.

July 29, 2021

E-Commerce Checkout Process

ALEXANDRIA, Va.—With the continuing rise in e-commerce, retailers around the world could soon be dedicating as much as one-third of in-store space to online order fulfillment, according to research from Edge by Ascential. 

According to the firm, 34.8% of global chain retail will be online by 2023, up from 30% in 2021, and rising to nearly 40% by 2025, necessitating the shift, reports Although U.S. online retail sales are lower, they’re set to reach 23.6% of retail sales by 2025, according to a July report from eMarketer, and store fulfillment services are on track to reach $140.96 billion by 2024.

As stores reopened post-lockdown, U.S. e-commerce growth was tempered, but that accelerated growth still means a much higher proportion of future online sales. Edge by Ascential estimates that the share of in-store sales will decline to 62.4% worldwide by 2025, down from about 70% this year and from 87% in 2015.

Throughout history, brick-and-mortar retailing has been responsible for most of the nation’s commerce, and it remains essential. Today, online and offline may be blurred, but the importance of stores is clear, according to David Gordon, director, omnichannel insights, Edge Retail Insight. 

"[T]he store of the future must become a physical portal into brand and product experiences—becoming places where consumers can be inspired, learn, co-work, socialize and experiment with new products, while using digital touchpoints, such as mobile phones and social media, and other technology advancements to drive in-store traffic and enable physical stores to operate as part of a broader, interconnected ecosystem," Gordon said. "This will mean, among other things, that the store network will become an increasingly vital part of last-mile fulfilment."

To learn more about the shift to online shopping spurred on by the pandemic, read “From the Source” in NACS Magazine.