Powered by Amazon: E-Commerce will make up 17% of all US retail sales by 2022

According to Forrester’s new Online Retail Forecast, online sales will get 17 per cent of all US retail sales by 2022, up from a projected 12.7 per cent in 2017. There is no surprise that Amazon is the main candidate to become a biggest retail driver.

As cited by Digital Commerce 360, in 2016 more than 83 per cent of US online adults bought something on Amazon, and 55 per cent of them used Amazon as a research tool before making a purchase. Recently was estimated that US online sales probably will grow 13 per cent YoY in 2017. This is five times faster than projected offline sales growth.

According to Business Insider, it means that Amazon actively teaches people to purchase online in general. It is good not only for company itself but to all e-commerce retail industry. As Amazon fleshes out its product discovery offerings with features like Spark, it could further strengthen its power over more e-commerce sales. This is frightening for competitors already struggling to survive against the e-commerce titan.

Recently, brick-and-mortar retailers are facing hard, with many stuck in a dangerous cycle of falling foot traffic, declining comparable-store sales, and increasing store closures. According to Slice Intelligence, over 8,600 retail stores could close this year in the US — more than the previous two years combined, brokerage firm Credit Suisse said in a recent report. Meanwhile, e-commerce is raising unstoppably — only Amazon, which accounted for 53 per cent of online sales growth in the US last year.

But brick-and-mortar retailers have a “plan B”. Many of them started to use omni-channel methods that leverage their store locations and in-store inventory in order to better compete in e-commerce. These omni-channel services, including click-and-collect and ship-from-store, can help retailers manage the transition to digital by:

  • Limiting the growth of shipping costs as online sales volumes increase by leveraging store networks for delivery.
  • Increasing online sales by offering cheaper, more convenient delivery options for online shoppers.
  • Keeping stores relevant by turning them into fulfilment centres that pull customers in to pick up online orders.

According to research analyst for Business Insider’s Intelligence, Jonathan Camhi, premium research service, retailers must care about an omni-channel fulfilment model. This omni-channel fulfilment report also detail the benefits and difficulties involved with specific omni-channel fulfilment services like click-and-collect, ship-to-store, and ship-from-store, providing examples of retailers that have experienced success and struggles with these methods. Lastly, it walks through the steps retailers need to take to optimize omni-channel fulfilment for lower costs and faster delivery times.

Here are some of the key takeaways from the report:

  • Brick-and-mortar retailers must cut delivery times and costs to meet online shoppers’ expectations of free and fast shipping.
  • Omni-channel fulfilment services can help retailers achieve that goal while also keeping their stores relevant.
  • However, few retailers have mastered these services, which have led to increasing shipping costs eating into their profit margins.
  • In order to optimize costs and realize the full benefits of these omnichannel services, retailers must undertake costly and time-consuming transformations of their logistics, inventory, and store systems and operations.
  • Provides examples of the successes and struggles various retailers have experienced with omnichannel delivery.
  • Details the benefits of omnichannel services like click-and-collect and ship-from-store, including lowering delivery times and costs, and driving in-store traffic and sales.
  • Lays out what steps retailers need to take to optimize costs for their omnichannel operations by placing inventory where it best meets customer demand.
  • Explains why retailers are having trouble managing costs with their omni-channel fulfilment efforts, which are eating into their profits.

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