E-commerce has had an outsize impact on brick-and-mortar — and it’s only expected to grow this year and continue to reshape how consumers buy and merchants sell.
In the third quarter, 9.1 cents of every dollar of retail sales was captured by e-commerce, according to seasonally adjusted figures from the Commerce Department. That’s a relatively small piece of the pie, but it’s growing fast, up from 8.9 cents in the second quarter, 8.5 percent in the first and 8.2 for the second half of last year.
It is impossible to tell just when the retail-e-commerce ecosystem will reach any kind of equilibrium, but clicks are expected to keep outpacing bricks for this year and beyond.
“We’re still in the middle of a transformational shift here,” said David Bassuk, managing director at AlixPartners. “We’re nowhere near close to the end, it’s not tapering off yet. Online has been increasing about 12 percent a year on average the past five years. The overall retail space is growing at about 3 percent, so it’s significantly taking share.”
And Bassuk expects the share gains of online sellers to keep their current pace or accelerate for at least the next couple years, bringing the e-commerce share of the market to about 12 percent.
“Those numbers might not sound dramatic, but they’re dramatic to retailers, that’s a big change,” Bassuk said. “That’s all pulling from stores. We don’t see this slowing down.”
Many of the e-commerce gains have gone to the sector-leader Amazon, which has a solid positioning on the commodity end of the fashion market, but is now seeking to spread out to looks with a higher style quotient and take more share from stores.
“As they keep expanding across product categories, retailers face a greater and greater burden of getting a customer to actually purchase in their stores,” Bassuk said.