It’s a snowy Saturday in Chicago, but Amy, age 28, needs resort wear for a Caribbean vacation. Five-years ago, in the year 2011, she could have headed straight for the mall. Today she starts shopping from her couch by starting a videoconference with her personal concierge at Danella, the retailer where she purchased two outfits the previous month. The concierge recommends several items, superimposing photos of them onto Amy’s avatar. Amy rejects several items immediately, toggles to another browser tab to check out testimonials and costs, finds better deals on several items at another retailer, and orders them. She buys one item from Weekend store hours and then drives to the Danella store near her for the in-stock items she would like to try on.
As Amy enters Danella, a sales associate greets her by name and walks her to some dressing room stocked with her online selections-plus some matching shoes and a cocktail dress. She likes the shoes, so she scans the bar code into her smartphone and finds exactly the same pair for $30 less at another store. The sales associate quickly offers to match the cost, and encourages Amy to test on the dress. It is daring and dear, so Amy sends a relevant video to three stylish friends, requesting their opinion. The responses come quickly: three thumbs down. She collects the products she needs, scans a web site for coupons (saving an additional $73), and checks out with her smartphone.
As she heads for your door, a life-size screen recognizes her and shows a unique offer on Saturday opening hours. Amy checks her budget online, smiles, and uses her phone to scan the customized Quick Response code on the screen. The product will likely be shipped to her home overnight.
This scenario is fictional, but it’s neither as futuristic nor as fanciful as you might think. All of the technology Amy uses has already been available-and within five-years, much of it will be ubiquitous. But what seems like a goal become a reality for the shopper-an abundance of information, near-perfect price transparency, a parade of promotions-has already been feeling more like a nightmare for many retailers. Companies such as Tower Records, Circuit City, Linens ’n Things, and Borders are early victims-and you will see more.
Every fifty years roughly, retailing undergoes this kind of disruption. A century as well as a half ago, the expansion of big cities and also the rise of railroad networks made possible the modern department store. Mass-produced automobiles emerged 50 years later, and very soon shopping malls lined with specialty retailers were dotting the newly forming suburbs and challenging the metropolis-based shops. The 1960s and 1970s saw the spread of discount chains-Walmart, Kmart, and so forth-and, shortly after, big-box “category killers” like Circuit City and Home Depot, them all undermining or transforming the existing-style mall. Each wave of change doesn’t eliminate what came before it, however it reshapes the landscape and redefines consumer expectations, often beyond recognition. Retailers depending on earlier formats either adapt or die out as the brand new ones pull volume using their stores to make the rest of the volume less profitable.
Today, however, that economic the truth is well known. The study firm Forrester estimates that e-commerce is currently approaching $200 billion in revenue in america alone and accounts for 9% of total retail sales, up from 5% 5 years ago. The corresponding figure is approximately 10% in the United Kingdom, 3% in Asia-Pacific, and 2Per cent in Latin America. Globally, digital retailing is probably headed toward 15% to 20% of total sales, although the proportion can vary significantly wbwchq sector. Moreover, much digital retailing is now highly profitable. Amazon’s five-year average return on investment, for instance, is 17%, whereas traditional discount and department stores average 6.5%.
What we are seeing today is only the beginning. Soon it will likely be hard even going to define e-commerce, not to mention measure it. Is it an e-commerce sale if the customer goes to a store, finds that the product has run out of stock, and uses an in-store terminal to have another location ship it to her home? What happens if the client is shopping in just one store, uses his Holiday opening times to locate a lower price at another, and after that orders it electronically for in-store pickup? How about gifts which are ordered from the website but exchanged at a local store? Experts estimate that digital information already influences about 50% of store sales, and that number is increasing rapidly.