The Profitero Blog

Retail Intelligence: Why the growth of eCommerce doesn’t sound the death knell for physical retail

Written by Profitero | May 6, 2014 1:00:00 AM

In her latest blog, Forrester analyst Sucharita Mulpuru seeks to dispel the myth that the growth of eCommerce is fuelling the demise of the physical store. With $300 billion more to be spent offline between now and 2018 – compared with $150 billion more that will be spent online over the same period – Forrester predicts that physical retail will continue to be a significant channel.

Research firm Forrester has just released its latest five year online retail forecast, predicting $294 billion in eCommerce sales in 2014, 9% of all total US retail sales. This is projected to increase to $414 billion by 2018, or 11% of total US retail sales.

The ubiquity of mobile and tablet devices is driving this growth, according to Forrester, which estimates that $87 billion in sales will take place on mobiles and tablets this year.

Analyst Mulpuru comments that the web keeps doing what it has always done well: huge assortments of products, at often lower prices than physical stores.

However, she is quick to point out that the growth in eCommerce doesn’t sound the death knell forphysical stores. Whilst Forrester expects $150 billion more to be spent online between now and 2018, they are predicting that $300 billion more will be spent offline over the same period.

Mulpuru concludes by stating that retail is a $3 trillion dollar market in the US. Whilst eCommerce continues to grow, the opportunity for physical retail is significant as omnichannel retailers look to drive online shoppers to stores with offerings such as in-store pickup.

Added to this, Forrester has predicted that web-influenced retail sales will reach $1.8 trillion by 2017 – further proof that the online and offline channel need to work hand-in-hand. Ignore either at your peril.

To help retailers better understand how they can compete and win in today’s fast-moving world of omnichannel retail and dynamic pricing, don’t miss Profitero’s essential webinar featuring Forrester analyst Sucharita Mulpuru on May 28th.

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