Conventional Retailers Take Over eCommerce Market

When most people think of eCommerce, they think of huge sites like Amazon. After all, with a value of over $130 billion, they control almost a quarter of all online retail. This behemoth of a company seems to be on the verge of global domination at the rate they’re growing.

But when you examine the numbers, you may see a glaring issue: that $130 billion includes very little profit. They have much lower operating costs than brick-and-mortar retailers like Walmart, so expanding without taking much off the top has been a fantastic venture. But doing so has built a mansion near enemy territory. Traditional retailers are starting to grow their own eCommerce sales rapidly, and a digital war is on the horizon.

The Impending Battle

It is no secret that Amazon has nearly perfected the art of eCommerce, leaving big box stores in their wake. But the brick-and-mortar stores are taking a stand and reclaiming their customers. In fact, the first quarter of 2014 saw great progress from traditional stores: Costco’s eCommerce sales rose by 48 percent, Home Depot grew 54 percent and Walmart grew 30 percent. In that same time frame, Amazon also saw growth, but it was stunted at just 20 percent.

Even with so much expansion into eCommerce, online shopping only accounts for less than 7 percent of the market. But, with that equaling about $80 billion in recent years, it was time to take the plunge and invest. And with advantages like site-to-store pickup and other conveniences that Amazon simply can’t offer, it seems like the tide is (slowly) turning away from the digital giant.

What Happens Next?

Big-box retailers are catching on to Amazon’s techniques and using them to their own advantage.

For instance, traditional retailers are quickly becoming more sophisticated in order to keep up with Amazon’s topnotch research and development. By partnering with third-parties and shipping from their warehouses directly to online consumers, retailers are able to compete.

What’s more, online titan Google has taken sides against Amazon. By partnering with local businesses to offer same-day delivery via Google Express, they have severely weakened Amazon’s attractiveness. Now it’s simply a matter of time to see who will cover more area faster, as both same-day service deliveries are still in their adolescence. Local businesses still have a long way to go when it comes to eCommerce, but helping hands have made their job much easier.

At the end of the day, it is the retailer who offers it all that will capture the market. Masters of the omnichannel will offer fantastic customer service and product selection in-store, as well as options like one-day shipping and site-to-store pick up. And since Amazon seems to be staying away from such services, their grip on eCommerce customers seems to be loosening.

Thrive Commerce has created a dynamic and intuitive platform you can use for your own brick-and-mortar store to reach customers across town and across the globe. To learn more about our eCommerce solutions, be sure to visit our home page.

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