According to MIT Technology Review while online retail purchases have grown significantly from a little over 1 percent in 2002 to 5 percent of total U.S. retail revenues in 2012. That is $190 billion via websites and $13 billion for mobile sales. In-store sales not influenced by the web, according to MIT Technology Review amounted to $1.7 trillion. Not surprising of those that go to stores 91% say shopping in person is easier. Of those that shop online 70% say it is easier. Smart retailers know that you have to let customers go with their preference and the “store” and products need to be accessible on the medium or location of the customer’s choice. While the thought was that the Internet would kill store shopping smartphones and mobile devices are actually not only garnering sales directly they are contributing to in-store shopping. 27 percent of smartphone owners do shopping research on their phone while in the store.
Based on MIT Tech Review’s sources on top of the $1.7 trillion mentioned physical stores generated another $1.1 trillion in sales influence by the Web. To paraphrase MIT Tech Review writer Rachel Metz online shopping hasn’t killed going to the mall because that experience is about more than the purchase of a product. It is a social activity and a form of entertainment.
And, according to Avi Goldfarb, professor of marketing at the University of Toronto, online buying generates what economists call “disutilities” that online retailers are still working through: difficulties physically inspecting products, product return processes, shipping time and expense. His research with colleagues looking at Amazon’s book sales in nearly 1,500 U.S. locations found that when a Wal-Mart or Barnes & Noble opened customers close to these locations bought many fewer best sellers from Amazon.
Shopping online, mobile and in-store complement each other and will continue to do so. The reality is physical location retailers need to understand, make available and leverage information on their stores and products online and online retailers need to understand the offline experience of shopping. For more see the following infographic from MIT Technology Review.
MIT Tech. Review SOURCES: Accenture, Forrester, NRF, shop.com
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