Brick & Mortar vs E-Commerce

“Extra – Extra, Read All About It!!! Brick-and-Mortar stores are dead! E-commerce is the way everyone will shop in the future. Extra – Extra, Read All About It!!!”

If you read the retail industry trades or e-commerce newsletters and blogs at all, that chant has been thrown around for the past decade and the COVID era has made it even louder!

But is it true? To paraphrase Mark Twain, “Rumors of the death of brick-and-mortar retail are greatly exaggerated”

Although e-commerce shopping continues to grow rapidly, brick-and-mortar stores are still holding up well versus online retail sites, as many people still prefer the in-store shopping experience where they can see and try out products before committing to a purchase.

Here are some facts:

In 2020, e-commerce made up 14% of all retail sales.

Brick-and-mortar makes up the other 86%.

Total e-commerce sales in the US in 2020:  $759.47 Billion

Total Brink-and-Mortar retail sales in the US in 2020: $5.6 Trillion (that’s Trillion as in 12-zeros, 000,000,000,000).  Source: Forbes.com

Further proof that brick-and-mortar is here to stay is that Amazon has announced it is opening brick-and-mortar stores. These large department-like stores will be roughly 30,000 sq ft.

It’s not Amazon’s first venture into retail. Amazon, which dominates the online shopping space, made its biggest bet in brick-and-mortar with the acquisition of upscale grocer, Whole Foods, in 2017.

What does this all mean? There is good news and bad news. The good news is.. despite what the e-commerce trade magazines would like you to believe, brick-and-mortar is going to be around for a while. The bad news is.. competition is going to get even tougher for existing retail businesses. Amazon is no slouch!

While there is no denying that e-commerce is and will continue to grow, there will always be local brick-and-mortar retail stores lining our main streets. However, as competition continues to increase from all fronts, the key to survival and continued growth will be your ability to evolve!

In the Six Ways to Compete with E-commerce, tip #2 is: Offer Online Services. They say, “If you can’t beat ‘em, join ‘em”. The six most popular reasons consumers shop via e-commerce are lower pricing, free delivery, wider selections/variety of options, comparison shopping, no sales pressure, and convenience. With the exception of Amazon, most products found on e-commerce sights are not less expensive. It’s simple, the “convenience” of shopping online is having products delivered to your door. Keep in mind, the word FREE is key in delivery. Companies that offer free delivery (Amazon Prime) tend to be much more popular than those that add a fee.  

If free delivery is not an option, BOPUS (Buy Online Pick Up at Store) may be a viable option. 

The game’s not over and if you are keeping score, as of the end of third quarter 2021 (latest statistic via Statista Dec 3rd, 2021), the score is brick-and-mortar 87% vs e-commerce 13%. Yes, e-commerce grew from 13.5% in 2020 to 13.8% in the second quarter of 2021, but then fell slightly to 13% in the third quarter of 2021.  

The more the world changes, the more consumers demand. To stay ahead of the ever-changing competition, as business owners we need to continue to evolve. To see Six Ways to Complete with E-commerce,  click here.

Note: The statistics provide are from sites via the internet and are from non-e-commerce companies. If you visit enough e-commerce sites, you will find conflicting data which provides more favorable results for their subscribers.

I have one more important fact for you to consider and that is the reliability factor of measuring your advertising R.O.I. attribution. 

Those in the web world like to push the falsehood that online is 100% trackable.  Having spent significant time working in the e-commerce world, I understand what they are saying, because it is common practice to put tracking codes on the links that we see in email or online.  But there are other significant factors that influenced us to click on those links such as brand awareness, reputation, word of mouth and other things that aren’t trackable.  If anyone tells you that digital marketing is better than other forms for those reasons, please be skeptical and you can even reach out to me for an unbiased but informed opinion and insight.