FOMO. If you haven’t seen the acronym before, it stands for “fear of missing out.” And when it comes to e-commerce, every brick and mortar store should have FOMO.
That’s because, as the latest statistics show, e-commerce accounts for approximately 18% of all retail sales worldwide. In other words, if you operate a brick and mortar store and don’t have an online shop, you ARE in fact missing out… big time!
However, that’s not to say that you should shut down your physical location(s) for good and switch to a fully digital business model. All that we’re saying is that—assuming your brick and mortar store(s) are profitable—you should also have an online store that functions as an additional source of revenue. Make sense?
Of course, it’s hard to talk about the retail industry without addressing the COVID-19 pandemic and how it’s influenced consumer behavior. In the next section, we’ll analyze the current state of brick and mortar retail as it relates to e-commerce.
What the Data Shows about Brick & Mortar Retail
The good news is: the current state of brick and mortar retail isn’t nearly as dire as some make it out to be.
According to Raydiant’s 2021 Consumer Behavior Report, 46% of consumers still prefer to shop in person. And there are plenty of valid reasons for that.
“In-store shopping experiences—feeling and trying on items, experiencing the sights and sounds of a store, even carrying a bag of newly-purchased items to the car—are simply too valuable to dismiss,” writes Bobby Marhamat, CEO of Raydiant.
But the same report also showed that consumers are willing to adapt if needed, as evidenced by a 27% spike in mobile phone app downloads for brick and mortar stores between Q1 and Q3 of 2020.
Of course, it’s difficult to tell whether the shift to online shopping is here to stay or whether it’s a temporary change brought on by the COVID-19 pandemic. What we can tell you though, is that 50% of survey respondents said that they’d be shopping more often at brick-and-mortar stores once they’ve been vaccinated.
Now let’s take a look at the current state of e-commerce, for comparison’s sake.
What History Tells Us About E-commerce
It feels a bit strange to use the word “history” and “e-commerce” in the same sentence, given that the latter hasn’t been around that long. However, there’s still plenty of insights we can glean from the data that’s been gathered thus far.
For example, in 2001, e-commerce sales in the U.S. totaled approximately $32.6 billion. Compare that to 2019, where e-commerce sales totaled $576.5 billion. And now compare that to 2020, where e-commerce sales reached an all-time high of $759.4 billion. What that tells us is that the online retail sector is growing, and it’s growing fast!
Historical data also shows that Amazon owns the majority of the e-commerce market share—by a landslide! According to eMarketer, these are the top 10 e-commerce retailers in the U.S., broken down by the market share percentage they own:
Impressive, right? But do all good things eventually come to an end, as the old proverb goes? That’s what we’ll be discussing in the next section.
The Future of E-commerce
While nobody can say for certain what’s going to happen in the future, analysts can map out the overall trajectory of e-commerce based on existing data. And so far, those projections are looking pretty darn good! See for yourself:
What we see here is that while the overall percentage change is expected to decrease year-after-year, the percentage of total retail sales will continue to climb. In other words, the longer you go without an online shop, the more money you stand to lose!
At the end of the day, remember this: we have nothing to gain by suggesting that you open an online shop. We’re not trying to sell you on any one particular product or service. We’re just a small business bookkeeping firm that genuinely wants to see other small business owners like you succeed.
Why? Because it’s our passion.
And because it’s our passion, we invite you to contact us should you have additional questions about running an online business. You can reach us at (858) 633-3573 or firstname.lastname@example.org.
Oh, and don’t forget to share this article with other small business owners!