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Livelong Digital

6 Jackaroo Street, Melbourne, VIC 3754

0458 046 739

On The Future Of

Brick-And-Mortar

Shopping

Online shopping is experiencing a massive boom. One survey by UPS suggests that out of

more than 5,000 shoppers surveyed online, over half (51 percent) said that they made

their purchases online. It’s also worth noting that 44 percent of smartphone users bought

merchandise online according to data presented by the Wall Street Journal.

These numbers make people wonder whether online retail outlets will eventually replace

brick-and-mortar shops. Is this likely?

The Real Story

According to Forbes contributor Tim Worstall, there will not be a takeover. Worstall notes

how retail spending is improving (albeit bit-by-bit when compared to online shopping),

and how it’s driving online shopping as well.

Experts point out that online shopping only has a small impact on sales in physical

shopping outlets. Barely 10 percent of retail sales are online. In the United States (US),

about 80 percent of roughly 1,200 shopping centres report good business health. Vacancy

rates aren’t even in double digit percentages. There is, however, a significant decline

from 2006 when 96 percent of American malls were ‘healthy’, according to data from

property firm CoStar Group.

Pessimism Still Exists

Online shopping is easier. People no longer have to drive to the store, choose and pack

their purchases and transport them home. One of the countries with the highest rate of

online shopping is the United Kingdom (UK). Data from UK-based retailer Shop Direct

shows that over 4 out of 5 Brits (roughly 95%) buy their goods online. Revenue from

online sales hit numbers close to £100 billion in 2013 alone.

It’s these numbers that fuel scepticism about the health of the retail outlets amongst

some analysts. Forrester Research estimates that online shopping will continue to grow by

increments of 9.1 percent until 2019. As a result, more physical shops (mainly in

shopping centres) are likely to close. For example, although most shopping centres in the

US are healthy, there is still an undeniable decline. Retail analyst Jan Kniffen, speaking to

CNBC, predicts that one-third of shopping centres in the US will shut down. Such

predictions come in the wake of major closures, such as the outlets that have been shut

down by Macy’s.

There is no way to accurately predict the future of shopping centres. But the rate at which

online shopping is growing is fuelling negative speculation about the future of our shops.

Sources:

http://time.com/money/4327632/shopping-malls-closing/

http://www.inc.com/erik-sherman/e-commerce-a-complete-replacement-for-stores-not-

by-a-long-shot.html

http://www.dailymail.co.uk/news/article-2722631/Online-shopping-20-years-It-started-

secure-purchase-Sting-album-95-British-people-buy-goods-internet-retailers.html

http://www.business.com/retail-and-restaurant/why-shopping-centers-will-soon-be-

obsolete/

http://www.forbes.com/sites/timworstall/2015/01/04/the-shopping-malls-really-are-being-

killed-by-online-shopping/#3a800a40183e

http://www.wsj.com/articles/survey-shows-rapid-growth-in-online-shopping-1465358582

http://www.livelongdigital.com.au/services/seo/local/