It’s a snowy Saturday in Chicago, but Amy, age 28, needs resort wear for a Caribbean vacation. Five-years ago, in 2011, she would have headed straight for the mall. Today she starts shopping from her couch by launching a videoconference with her personal concierge at Danella, the retailer where she bought two outfits the previous month. The concierge recommends several items, superimposing photos of them onto Amy’s avatar. Amy rejects several items immediately, toggles to another browser tab to research testimonials and prices, finds better deals on several items at another retailer, and orders them. She buys one item from Mardi Gras Fat Tuesday open hours and then drives to the Danella store near her for the in-stock items she would like to try on.
As Amy enters Danella, a sales associate greets her by name and walks her to a dressing room stocked along with her online selections-plus some matching shoes as well as a cocktail dress. She likes the shoes, so she scans the bar code into her smartphone and finds the same pair for $30 less at another store. The sales associate quickly offers to match the cost, and encourages Amy to test on the dress. It really is daring and dear, so Amy sends a relevant video to three stylish friends, asking for their opinion. The responses come quickly: three thumbs down. She collects the things she would like, scans an online site for coupons (saving an extra $73), and checks out with her smartphone.
As she heads for that door, an existence-size screen recognizes her and shows a unique offer on Memorial Day store hours. Amy checks her budget online, smiles, and uses her phone to scan the customized Quick Response code on the screen. The item will likely be shipped to her home overnight.
This scenario is fictional, but it’s neither as futuristic nor as fanciful as you may think. All the technology Amy uses is definitely available-and within five-years, most of it will be ubiquitous. But what seems like a fantasy come true for that shopper-a great deal of information, near-perfect price transparency, a parade of special deals-is already feeling a lot more like a nightmare for a lot of retailers. Companies like Tower Records, Circuit City, Linens ’n Things, and Borders are early victims-and there will be more.
Every 50 years approximately, retailing undergoes this type of disruption. A century and a half ago, the expansion of big cities and also the rise of railroad networks made possible the current department store. Mass-produced automobiles emerged 50 years later, and very soon departmental stores lined with specialty retailers were dotting the newly forming suburbs and challenging the city-based department shops. The 1960s and 1970s saw the spread of discount chains-Walmart, Kmart, and so forth-and, right after, big-box “category killers” such as Circuit City and Home Depot, them all undermining or transforming the previous-style mall. Each wave of change doesn’t eliminate what came before it, however it reshapes the landscape and redefines consumer expectations, often beyond recognition. Retailers relying on earlier formats either adapt or die out as the new ones pull volume using their stores and make the rest of the volume less profitable.
Today, however, that economic reality is well known. The research firm Forrester estimates that e-commerce is now approaching $200 billion in revenue in the usa alone and makes up about 9% of total retail sales, up from 5% five-years ago. The corresponding figure is approximately 10% in britain, 3% in Asia-Pacific, and twoPer cent in Latin America. Globally, digital retailing is most likely headed toward 15% to 20% of total sales, even though the proportion can vary significantly wbwchq sector. Moreover, much digital retailing is currently highly profitable. Amazon’s five-year average return, for example, is 17%, whereas traditional discount and shops average 6.5%.
What we are seeing today is only the beginning. Soon it will probably be hard even going to define e-commerce, much less measure it. Will it be an e-commerce sale if the customer goes to a shop, finds the product has run out of stock, and uses an in-store terminal to possess another location ship it to her home? Imagine if the consumer is shopping in a single store, uses his What time does does stores close on sunday to find a lower price at another, and after that orders it electronically for in-store pickup? Think about gifts which can be ordered from the website but exchanged in a local store? Experts estimate that digital information already influences about 50% of store sales, which number is growing rapidly.