E-Commerce Bolsters Brick-and-Mortar Business

New York, NY, May 8, 2024-"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,” reports the Wall Street Journal.

“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.

“‘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.

“Kohl’s now fulfills more than a third of its online orders in stores, Walmart more than half, and Target nearly all its sales from its network of roughly 2,000 locations, according to the companies.

“The pandemic sped up the integration of online and in-store shopping, as mandated closures and infection concerns forced retailers to offer curbside and pickup services, Saunders said. Now, many customers expect these options, which often allow them to avoid shipping fees and get their sunblock and dish soap sooner than waiting for delivery.”