E-Commerce: The New Backbone Of Brick-And-Mortar

October 2012 Integrated Solutions For Retailers

By Bob Johns, associate editor

E-commerce has become an integral part of the new omni-channel world of retail.

The retail industry has been forever changed by one thing above all else, the emergence of e-commerce. E-commerce has affected every aspect of the retail business model, from supply chain and fulfillment to security and loss prevention. Along the way one thing has become clear, though — brick-and-mortar retailers are embracing e-commerce as a valuable, and profitable, channel for growth. In the 2nd quarter of 2012, the U.S. Department of Commerce reported that U.S. e-commerce sales reached $51 billion, and for the first time accounted for more than 5% of seasonally adjusted retail sales. This is a year-over-year growth of 15.1% and shows no signs of slowing. Any retailer that does not embrace this channel risks losing both sales and customer loyalty.

RSR Research notes that consumers no longer see “channels” within the retail industry. They only see “solutions” that enable them to make the purchase they desire. This has led to retailers needing to brand themselves across all channels in order to succeed, creating an omnichannel experience for the customer. In June 2012, RSR released its Omni-Channel 2012 report, where the growth of e-commerce and other channels is detailed from 2010 to 2012 (see Figure 1). For the first time, there was a drop in the percentage of retailers that operate physical stores, down 5%. But, as retailers focus on creating an omnichannel experience for the customer across channels, the total percentage of retailers operating online continues to increase, up 4%. “There’s really no such thing as a customer walking into a store as a ‘blank page’ off the street anymore saying, ‘show me what you’ve got for digital cameras, I don’t know anything about them’ — and this changes the very fundamentals of what it means to sell products in stores,” says Steve Rowen, managing partner at RSR. “Whatever means the consumer has chosen to learn about the product in their myriad paths to purchase, there’s a strong chance they know as much about it — if not more — than ill-equipped store associates currently do. It’s one of the key reasons store-based retail is significantly challenged to remain relevant.”