Common misconceptions about the rise of e-commerce

There is no doubt that e-commerce is destined to continue growing in the foreseeable future, forcing many traditional retailers to adapt, embrace an omni-channel selling strategy or fail. There are, however, some misconceptions that e-commerce enthusiasts tend to hold:

• Brick-and-mortar retail is declining: e-commerce sales are growing faster than the rest of the industry. According to the National Retail Federation (NRF), in 2017 online shopping is expected to grow between 8 to 12 percent. Contrary to common belief, however, online shopping is not completely tampering with bricks-and-mortar sales which are also expected to grow by 2.8 percent. This is especially true in China, the country that best embodies the widespread adoption of online shopping. In fact, even though China alone accounted for 39.2% of all global e-commerce sales in 2016, giant e-commerce players, such as Alibaba, have been buying physical stores and invested heavily in bricks-and-mortar retailing. This is not a China-only trend as Amazon is also seeking growth offline after its acquisition of Whole Foods for $13.8 Billion.
• Bricks-and-mortar retail is becoming irrelevant: Will physical stores ever become obsolete and be completely replaced by e-commerce? Recent studies, including a Ksubaka Insight report, show that the great majority of online shoppers still consider physical stores an essential part of their shopping journey. Almost 80% of Chinese shoppers said that they purchase products online only after they touch and feel them in physical stores.
• E-commerce is only involving younger generations: Marketers tend to think that only millennials and younger generations shop online. According to Business Insider, in the US 23% of online shoppers are aged between 35 to 44 years old (which only account for 18% of the total population). Even more surprisingly, 24% of all online shoppers are aged 45-54, an age group that only accounts for 18% of the total population. The Ksubaka Insights report showed that 28.3% of people that shop online every day in China are 56 or older. Brands that are limiting their e-commerce to younger generations are missing out on very sizeable opportunities.
• Offline engagements are not measurable nor scalable: The rapid growth of social media and smartphones have cemented the idea that, in order to reach a large number of consumers in a measurable and scalable way, it is essential to focus on growing online channels that can also provide real-time data on engagement. It is possible to track offline transactions but it is notoriously difficult to track shoppers’ offline behaviors and influence them in a significant way when they are in-store, near the point of purchase. This is no longer true: the emergence of new platforms, such as Ksubaka, are enabling retailers to engage shoppers offline and use digital screens to collect real-time behavioral data and influence purchase decision through interactive digital content.