Online Shopping: Is this the Death of Brick and Mortar Retail?
Let’s say you had a birthday dinner to go to next week, nothing to wear, and no time to go out and buy a dress. Several years ago, this would be a dilemma. However, with the advent of online shopping, you could order a dress with the click of a button. One also shouldn’t forget the wonderful option express shipping.
According to research by Goldman Sachs, millennials have been spending most of their clothing budget online. This isn’t surprising given how tech savvy our generation is and how we prize convenience and efficiency. We can browse hundreds of styles by simply scrolling, and even filter items by size or colour preferences. Being able to compare prices to find the lowest one and to easily buy multiple items with streamlined checkout processes, shopping online is easier than ever. Luxury goods have even moved online: according to Bain & Co.'s 2009 luxury-goods study, luxury sales online grew 20%. This shift to online shopping is evident from the rise of one of the world’s favourite new holidays: Cyber Monday. When Black Friday is no longer sufficient, we create another holiday to further encourage online shopping.
But what does all of this mean for brick and mortar retail? Macy’s has recently announced that it will be closing 63 stores, while Sears has released a list of 150 locations of stores that will be terminated. The stock prices of Macy’s, Kohl’s, Nordstrom and J.C. Penney have also plummeted. This isn’t totally surprising, given consumers new preferences for making purchases online.
It isn’t all bleak, however. While the death of physical retail has been prophesied by many, statistics do show hope. In 2014, online spending was $200 billion while in-store spending was $4050 billion. Thus we see that brick and mortar stores still account for 10 times the sales of online sales. In response to surveys, about 87% of consumers also said they still plan to shop in physical stores just as much as they did in 2014.
No matter the convince of online shopping, inherent appeal of physical stores remain. The ability to try on clothes, the instant gratification of bringing home your purchase, and the chance to feel the item cannot be replaced by online stores. There are merits and drawbacks to both online and in-store shopping, but the fashion industry will always have space for both.