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Is The Brick and Mortar Dead?

THE DEATH OF BRICK AND MORTAR (AND THE RISE OF ECOMMERCE) ..... THE SHIFTING RETAIL LANDSCAPE As our world shifts to become ever more digital so does our shopping experience. While brick and mortar storefronts have traditionally been the staple of retail sales, online shopping is quickly gaining in popularity. BRICK AND MORTAR ECOMMERCE TOTAL RETAIL FOOT TRAFFIC E-COMMERCE RETAIL SALES In billions of visits U.S. Department Of Commerce Census Buregu 70,000 40 - 60,000 50,000 30 - 40,000 20 - 30,000 20,000 10 - 10,000 2010 2011 2012 2013 2000 2002 2004 2006 2008 2010 2012 2014 AMOUNT OF NEW RETAIL SPACE ECOMMERCE AS A PERCENTAGE OF In millions of square feet TOTAL QUARTERLY RETAIL SALES 400 - 8% 300 - 6% 200 - 4% 100 - 2% 2000 2002 2004 2006 2008 2010 2012 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 BAD HEADLINES FOR BRICK AND MORTARS jcpenney BLOCKBUSTER VIDEO *macys LOEHMANN'S Loehmann's is going out of J.C. Penney is cutting 2,000 Blockbuster is going out of Macy's is cutting 2,500 jobs business after 93 years, jobs and closing 33 stores business closing all 300 stores and closing 5 stores closing all 39 stores TARGET SEars BEST R RadioShack. Sears announces closing flag- Best Buy stock dropped a stag- Target is cutting 475 jobs and not filling 700 empty Today's Radio Shack market capital is 1.3% what it was 15 ship store in downtown Chicago gering 28.59% in a single day after a weak holiday sales report. positions. after 9.2% drop in holiday sales years ago RETAIL'S HIGH OVERHEAD Average product cost markup per company 15% 32% Ч1% Ч6% 50% 65% 67% 80% 81% Amazon Wal-Mart Staples Target Dick's Nieman Nordstrom Macy's Bed, Bath & Sporting Goods Marcus Beyond THE RISE OF ECOMMERCE Over the past decade online sales have gradually become a larger portion in total retail sales. Furthermore, the internet now even plays a role in many brick and mortar purchases. By 2017 And of all U.S. retail sales will 60% 10.3% of total US retail involve the Internet in some sales will be online way (direct sale or research] purchases PREFERRED ACCESS FREQUENCY OF ONLINE SALES How do you prefer to access Retailers that have both an online and physical presence? How frequently do you shop online? NEVER | 0% 1-3 PER YEAR 6% 4-6 PER YEAR 12% 7-12 PER YEAR | 20% 1+ PER MONTH 40% 56% 1-2 PER WEEK 17% Computer 3+ PER WEEK | 5% What items have your purchased online this year? CONSUMER ELECTRONICS 69% BOOKS CLOTHING & APPEARL 67% 63% 30% HOUSEHOLO GOODS 38% Store OFFICE SUPPLIES PACKAGED GOODS SPOORTING GOODS PET SUPPLIES GOOD AND GROCERIES 30% 28% 20% 20% 6% 20% 6% Smartphone TOOLS UXARY GOODS 18% Tablet 2% 6% Catalog WAY THE SHIFT? Buying things in-store allows you to gauge product quality. However, most consumers think that the many perks of online shopping outweigh the single benefit of holding a product before buying it. TOUCHING IS GOOD, REVIEWS ARE BETTER INFORMED CUSTOMERS Online reviews speak to quality from experience of consumers read of shoppers research at home 75% 69% product reviews online specifically to avoid requiring sales assistance. before going to a store. of consumers are of all store associates report that 54% influenced by online shoppers are better connected to reviews product information than they are. %88 PRICE CHECK WHAT'S NOT TO LIKE? Top things shoppers dislike when shopping in a store: SOLD OUT 60% SSSSSSSSS of shoppers purchased a product from an PRICES/PROMOS ARE NOT CLEARLY MARKED PRODUCT WANTED IS OUT OF STOCK DIFFICULTY FINDING WANTED PRODUCT online competitor when the store they were in wouldn't match the online price. TOP DEAL CLOSERS FOR ONLINE RETAILERS TO FOCUS ON: BETTER VIRTUAL VIEW OF PRODUCTS FREE DELIVERY LOWER PRICES FREE RETURNS ONLINE IS YOUR NEW WINDOW TO THE WORLD. SKIP THE MALL. SOURCES: S. THE STOREƯmrts/www/data/pdf/ec_current.pdf ers-say-free-not-same-day-delivery-option-would-spur-increased-online-shopping-27595/attachment/bcg-top-online-shopping-motivators-mar2013/ MILLIONS OF DOLLARS XXIXXXX

Is The Brick and Mortar Dead?

shared by NowSourcing on Feb 19
In recent times, the brick and mortar has definitely been up against major challenges from eCommerce retailers. But is it the end?


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