Embrace eCommerce to Avoid Becoming a Retail Casualty
Retailers that have not yet embraced eCommerce within a coherent omnichannel strategy cannot afford to wait any longer.
That’s because as more retail revenue shifts online, a strategy based predominantly on selling through brick-and-mortar stores becomes more difficult to justify, not least because online is where the growth lies.
Unlike almost every other fashion retail chain, Primark has long held out against eCommerce, preferring to invest in a bigger store network. It plans to open 14 new stores this year, which seems a brave move at a time when many retailers are downsizing their store network.
Pace of closures quickens
In the US, the rate of store closures is accelerating markedly, with almost 6,000 store closings announced so far in 2019 – more than the figure for the whole of 2019.
Meanwhile, eCommerce giant Amazon added $35bn in retail sales in 2018 – the equivalent of roughly 7,700 stores.
Investment bank UBS predicts 75,000 stores will close in the US by 2026. The closures will affect all sectors, including 21,000 apparel stores, 10,000 consumer electronics retailers and 8,000 home furnishing stores.
Though the US retail sector has also suffered from problems of its own making, such as overbuilding in the pre-crisis years and taking on too much debt, US retailers have been hardest hit by the competition from eCommerce. The average US household spent $5,200 online last year, up nearly 50% from five years earlier.
Online boom continues
According to USB, online shopping is expected to make up 25% of retail sales by 2026 compared to the current penetration rate of 16%.
As the eCommerce boom continues, the question is whether physical stores will one day become irrelevant, particularly for younger consumers, who are much more accustomed to shopping online.
We at Openbravo don’t think so. Stores remain incredibly important. The lion’s share of retail spending is still done in stores, and consumers still enjoy visiting them. But clearly, today’s consumers also expect that your business offers a seamless shopping experience across all channels, digital or physical.
Many companies with brick-and-mortar stores and an online shop keep the two separated, and that is a mistake given the nature of the always connected customer in today’s retail. There are big benefits to integrating your retail POS solution with an eCommerce platform such as Magento into an omnichannel experience.
Take inventory management, for example. When your retail POS is separate from eCommerce, you have to manually adjust inventory to reflect your sales and purchases. This can lead to poor inventory visibility and ultimately mistakes. For instance, you may have to cancel or delay an online order because you don’t have the produce in your store. With Openbravo Commerce Cloud, you have real-time inventory visibility across all channels.
To see how easy it is to integrate offline and online retail, watch our on-demand webinar, “Hands-on Demo: How eCommerce Integration Transforms in-Store Retailing”.