In recent years, people have started spending plenty of time online, not only are we spending more time, but we are spending more money as well. In the past went to stores in order to purchase anything although today more shoppers head online to find what they seek, this is compromising the future of in-store shopping.
According to the Financial Times, there has been a 12.5% increase in online sales of non-food products in the last 5 years. In 2017, it is estimated that 1.66 billion people went online to purchase goods. During the same year, the global e-retail value was a whopping 2.3 trillion dollar. This number is projected to grow and get to 4.44 trillion by the year 2021. The online retail industry is growing rapidly, the same article stated that up until 2016 both in-store and online sales had grown equally, but since then “Online shopping is now growing at the expense of offline,”.
What has lead to the online shopping boom?
The rapid growth of online shopping comes as no surprise. It is easy and convenient, buyers can now shop online from the comfort of there house saving time and more importantly energy.
There are 5 factors that have lead to the popularity of online shopping.
- 24/ 7
Online shopping allows customers to shop 24 hours a day, 7 days a week. This means shoppers are no longer restricted to working hours and can now shop when free rather than having to make time for it. Convenient right?
2. It’s cheaper
The senior retail analyst at Mintel Nick Carroll says that people believe that online shopping is cheaper. Some people believe that by going shopping online you can get better deals. Well, this may be the case sometimes but is not a fact.
Although, online shopping allows customers to compare prices, meaning they can get better deals. Rather than shopping in one store, online shopping gives customers access to greater variety. We are now able to look at different stores before making a decision.
3. Delivery times/ Sending items back.
Retailers offer next day delivery as standard, some retailers are even pushing toward same-day delivery. This making online shopping more convenient as you can get things instantly.
Its also possible to send items back, If you don’t like a product it easy to send back. this has always been possible bit today it is significantly easier to do so.
Online shopping does not restrict the buyer to one shop, one country or even one continent. Allowing consumers to buy products from all around the world. We can now order items from anywhere by the touch of a button. This is something that stores cant offer.
The Amazon Effect
According to Millennial Marketing, the Amazon effect is the impact the digital marketplace has on the traditional business model regarding consumer expectations and the new competitive landscape. The name acknowledges Amazon’s domination of the online shopping environment. They are the benchmark for all other online sales and transactions.
The Amazon Effect has set certain expectations that consumers have come to expect from their online experience. We now expect to buy items for friction less and immediate, regardless of the company you are buying from. This raises the expectation of consumers to have on brand in-store or online. For example, Amazon does not compete with a restaurant chain, as consumers cant order food from Amazon. Although due to Amazon’s brand values and convenience, has changed customer expectations forever, meaning they will still compare the experience they have at the restaurant to the high bar set by Amazon. We now demand the same experience online or in-store.