Digitalization has been influencing our actions in various ways for quite some time now. Online retail is becoming increasingly popular, offering consumers a convenient alternative to shopping in high streets, but also posing serious competition for retailers.
There is a lot of talk these days about the impending demise of brick-and-mortar retail due to online shopping. With all the discontent and dire predictions, it can be challenging to form your own opinion. If you believe the media, online shops are seen as strong competition, even a threat to retail. In fact, however, a third of all Germans are fundamentally opposed to shopping on online platforms. Even among the under-50s, around 23% rely exclusively on brick-and-mortar stores. This is not surprising, because online retail is not nearly as dangerous as it is portrayed when you look at the facts: Back in 1997, mail order companies achieved sales of EUR 21.0 billion (converted from DM to EUR). In 2017, statistics show e-commerce sales of EUR 58.5 billion. Compared to the estimated total retail sales of EUR 523 billion, online retail therefore accounts for only 11.19% of the market.
According to the study "Einkaufswelten 2017" (Shopping Worlds 2017) by Teambank, the purchasing behavior of 1,004 people between the ages of 18 and 79 was surveyed. The evaluation of this study showed that customers who have already had contact with online retail are more critical of brick-and-mortar stores, as they can directly compare product availability, product information, and clarity on the web. However, the results also clearly showed that expensive and complex products are purchased more often in stores than online. Particularly when it comes to furniture, clothing, and shoes, people value being able to get a real impression. Similarly, when it comes to household appliances and consumer electronics, people want to be advised by a salesperson and supported in their purchasing decision. This is where retailers have a major advantage that online retailers cannot offer: friendly and authentic advice from a trained salesperson is still what customers value most, as this study shows.
Nevertheless, digitalization is having a strong impact on retailers. Young consumers in particular no longer differentiate between the two. They have the same expectations both online and offline. In contrast to the large selection of goods, detailed product information, and various payment options offered by online shops, many retailers and chain stores continue to rely on cheap labor, stick to the same sales concepts, and trust in their loyal customer base. For them, it is usually a challenge to adapt to the changing needs of consumer society and step out of their comfort zone.
The trend is toward creative and trained salespeople who act empathetically and arouse emotions in buyers by also impressing them with their expertise. Customers expect a genuine shopping experience and no longer limit themselves to mere consumption. Successful retailers must be able to offer entertainment. This is the only way they will be able to continue to compete with online retailers and prevail.
