Retail Space Users – Should You Be Concerned about the Growth of Online Shopping?
Posted by Guest Author on February 6, 2012 in Business News [ 0 Comments ]
In a nutshell, no. You may have researched some of the online statistics that left you sweating. For example, Google has over 40 billion pages indexed, and the number of users online at any given point in a 24 hour period ranges from 500 million to one billion. In 2008 at the height of the economic recession, online retail sales from those users amounted to $178 billion dollars according to Geekprenuer.
Sounds like a lot, doesn’t it? One billion of anything sounds like a lot, but there are two sides to every statistic. Consider this side. If less than 200 billion dollars was spent online in 2008, then that ALSO means that less than one third of the world’s population spent even one dollar online in 2008. So what is the significance? Fewer people are buying online than you think.
The Truth about the Internet Retail Business
The truth is that while the Internet retail business may be doing well, it is not doing well for every business. In fact according to Geekprenuer, when compared to brick and mortar businesses the Internet sales only make up 6.5% of total retail sales. In other words, stores like Amazon that are selling everything from books to groceries are still missing 93.5% of the profit margin.
Why? They don’t have a way to compete for those customers directly.
Another reason why you shouldn’t worry about online marketers is simple logistics. A survey on Paypal users suggests that as many as 45% of online buyers don’t complete the check out process. They are in essence abandoning their purchase when it comes time to complete the check out process because of simple logistics. Shipping costs of $39.95 get tacked onto a $9.95 purchase and the buyer checks out, but not the way online retailers want them to.
This is not to say that online shopping isn’t growing, but it simply isn’t growing at the rate that online retailers hoping to make you nervous are suggesting. However, that doesn’t mean you should dismiss this growth either. When you are considering retailing in your community, you need to keep this growth in mind while at the same time building your business. The best way to go about this is by incorporating the advantages of online shopping growth into your offline business.
Top 3 Ways to Incorporate Online Shopping Into Your Offline Business
1. Provide the same instant gratification that online shopping can offer.
Shoppers in your store are there for the experience of shopping. The luxury of being served by an actual human being, and the instant gratification that comes with walking out of a retail space with a newly filled shopping bag. On your website, provide in-store coupons that give your customers both senses of this instant gratification—the online experience and the in-store experience.
2. Mimick the online experience of your customer in-store.
Retailers all over the world are doing this through touch screens in store, plasma screens showcasing their online catalogues and referring clients to in-store options, or incorporating the world of multi-media into your in-store displays. The list really is as endless as your imagination.
3. Offer a buy online, pickup offline option for customers.
This is great for customers who like the convenience of shopping online without the hassle of shipping fees. Here, they get the best of both worlds and the only work your human resources need to do is get the items ready for pickup.
The bottom line when it comes to considering retail space: Do not let the growth of online shopping intimidate you. Rather, work with it; not against it, and use those statistics to your advantage and not as your competition.
Photo Credit: entreprenuerbootcamp.blogspot.com
Nathan Smith is the owner of Austin Tenant Advisors, an Austin, TX commercial real estate company. He specializes in helping tenants find the best Office Space For Rent and Retail Space For Lease for their businesses, and helps negotiate their leases to ensure they save time and get the lowest lease rates and best terms possible.