The Shift in Retail

Brick and Mortar stores have been North America’s main source of retail shopping for centuries. With the advancements of technology in the past decade, there has been a massive rise in the use of online retail shopping, especially in the younger generations. With the increase of online shopping comes the common debate on whether e-commerce is a serious threat to the livelihood of traditional brick and mortar retail stores, or if it is merely an additional retail avenue for consumers.

In the wake of COVID-19, new measures aimed at slowing the spread of the virus greatly impacted how consumers made purchases. As the world began to shut down in March 2020, in-store retail shopping was no longer available. Both younger and older generations turned to e-commerce to continue their shopping.

The Statistics

Many companies rely on popular retail holidays like Black Friday or Boxing Day to collect statistics to support or deny the claims that online shopping is wiping out in-store sales. The statistics are hard to analyze because many of the reports are American based and are not accurate stats on the patterns of Canadian consumers. However, across the globe, it is clear that online sales are rising rapidly, especially on retail holidays. Adobe analytics data disclosed that over $6.22 billion in purchases were made in the U.S. by the end of Black Friday in 2018, increasing the sales by 23.6% compared to 2017.

With the shutdown of brick-and-mortar stores, retail sales across Canada fell by 18% between February and March of 2020. In April alone, retail sales plummeted to $33.9 billion, a significant drop from both February 2020 and the previous year (April 2019).

It’s no doubt that retail closures commenced the staggering rise of e-commerce sales across Canada. According to Stats Canada, retail e-commerce sales reached a record of $3.9 billion, that’s a 63.8% increase in the first month of retail shut downs. It’s important to note that once COVID-19 measures began to loosen, retail sales rose back up in May 2020, and slowly continues to rise.

Although online sales are increasing rapidly, in-store sales have only been decreasing minimally on an annual basis. There is no conclusive statistic for Canadian stores, however, across the board it is estimated that sales declined between 1-7% per year. Nothing close to as alarming as the increase in online sales. Another factor in brick and mortar store revenue is the ability to offer e-commerce in addition to in-store sales. Retailer such as Target, Walmart, and Hudson’s Bay offer all of their products online as well as in-store. This gives shoppers the option to buy from whichever avenue suits their schedule and lifestyle best.

Another reason the statistics cannot be unquestionably accurate is because the data varies largely based on generational factors. Younger consumers feel more comfortable purchasing clothing, technology and health products online, while the older generations would rather go to a physical store to purchase these products.

How Brick-and-Mortor is Changing

To counteract these increasing online sales we have seen a rise in brick and mortar stores integrating shopper interaction and retail technologies to attract consumers in a unique way. Creating a customer experience that one cannot receive online is a strategy that retailers are incorporating to encourage in-store purchasing. Companies such as Golf Town and Sports Chek have virtual reality simulators that allow you to test the merchandise before purchase. Retailers such as Best Buy and Apple also offer the option to use devices in store to ensure you are happy with how the product functions prior to buying it. Online retailers cannot offer any competing service to their consumers.

As more people become familiar with e-commerce, it’s more important than ever that retail stores begin implementing a heightened in-person experience more frequently. Retail businesses will need to move away from sales-oriented goals and focus solely on the customer experience. Not only will this begin to forge long-lasting relationships, it will begin to drive sales in the long-term while creating a trustworthy brand for the consumers.

It is without question e-commerce is rapidly exceeding sales from previous years, however, the decrease within in-store sales is not significant enough to suggest that the death of brick and mortar stores is on the horizon.