How Online Shopping Is Saving the Bricks-and-Mortar Store
Store owners once viewed e-commerce as a mounting threat to their survival. Now, more bricks-and-mortar stores are thriving after integrating their properties with the online shopping experience.
Shoppers browse in person to see, touch or try on items before ordering them online. They are picking up or returning purchases in stores. And retailers are increasingly relying on their shops as fulfillment hubs, shipping items ordered online from store stockrooms in addition to warehouses.
Overall, nearly 42% of e-commerce orders last year involved stores, up from about 27% in 2015, according to research firm GlobalData.
How Online Shopping Is Saving the Bricks-and-Mortar Store © Provided by The Wall Street Journal
“There was a narrative that as online grew, stores would become less relevant. But it hasn’t worked out that way,” said Neil Saunders, managing director at GlobalData. “In many ways, the store is still the heart or hub of retail.”
It is another example of how online-only retail has its limits, and why physical stores are making a comeback. After years of overbuilding that lead to a sharp contraction, retailers are on track to open more stores than they close in 2024 for the third consecutive year, according to advisory and research firm Coresight Research.
Many retailers have found that it is too expensive and difficult to attract and retain customers without physical stores. And using stores as pickup and drop-off points helps lower the labor, packaging and shipping costs involved in online orders.
Big-box retailers started building up their store-fulfillment operations and infrastructure for in-store pick ups and returns before the pandemic after realizing that returns were higher for items bought online and that digital sales were less profitable.
