Feature
The demise of brick-and-mortar retail
has been greatly exaggerated
By Ifti Ifhar, CEO, ComQi
There’s been no end of
stories lately about retail
store closures, layoffs
and bankruptcies, but
the real story isn’t about
physical retail dying. It’s
about evolution — and that
outlook is very positive.
E-commerce is indeed growing quickly, and
changing the retail landscape, but a deeper look
at data shows bricks and mortar retail is also
growing — and having an immensely higher
impact on the business.
ComQi, which develops solutions to drive in-store
customer experience and engagement, is talking
constantly to retailers about what’s happening in
their stores, and what they hear mostly about is
unprecedented growth.
Backed up by Accenture Strategy, the global
consulting firm, which has looked at the state
of retail, has concluded: “… Despite continued
growth in digital commerce, the physical store
will continue to be the largest revenue-producing
channel until at least 2026. But, it is already
evolving from a distribution channel to a
customer experience platform …” Both in-store and online should be part of a
retailer’s comprehensive plan to maximize sales,
and both should be applied with equal attention
and importance.
Furthermore, this occurrence is also supported
by May 2017 data published from the U.S.
Census Bureau/ U.S. Department of Commerce
that include empirical data regarding retail sales
growth through Q1 2017. The total number of stores and the overall brick-
and-mortar footprint may indeed reduce over time
in the U.S. Some of that will owe to over-supply,
but it’s also because in-store retail is evolving
from distribution channel to customer experience
platform. Much more advanced technology —
well beyond transaction processing — is being
invested into them to fuel more sales.
Data shows:
• Total annual retail sales growth was 5 %, from
$1,189B in Q1 2016 to $1,250B in Q1 2017;
• E-commerce sales grew by 14.7%, from
$92.2B to $105.7B, up $13.5B in a year;
• The in-store sales grew up by 4.3 %from
$1,097B to $1,144B, up $47B in a year;
• Brick-and mortar sales is 91.5 %of market,
while e-commerce represents 8.5%.
The data is clearly indicating that while online
sales is seeing faster growth in sales than
physical retail, $47 billion of the $61 billion
in retail sales growth in the last 12 months of
available data was from stores with doors. That
doesn’t strike as cause for despair. The total
dollar growth of bricks and mortar is 3X that of
online, but online growth rates are going to be
faster because the base is far smaller.
American humorist Mark Twain famously reacted
to newspaper reports in 1897 of his demise
suggesting that “The report of my death was an
exaggeration.” He actually passed 13 years later.
The same might be suggested about in-store
retail. It’s far from dead or dying.
Ifti serves as Chief Executive Officer for ComQi, the global
provider of Digital Customer and Staff Engagement
solutions. He has an extensive management background
in global technology companies. He is on the 2016 list of
50 most promising IoT solution providers.
Retail Customer Experience, 7/11/2017
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