E-Commerce is the Future of Retail, Or Is It?

Many believe that the world of brick-and-mortar is coming to an end. That the future is e-commerce, and e-commerce alone. Many feel the number of retail bankruptcies, store closings and liquidations support this argument, along with the rise of e-commerce giant Amazon. However, there are signs that stores, not e-commerce, are actually the future of retail.

Consider the following fivesigns physical stores are here to stay:

  1. The rise of e-commerce is a mix of – often misunderstood – factors

It’s true that giants like Amazon and eBay have transformed the way consumers shop. E-commerce has had a huge impact on traditional retail: from the increase in purchases online to pick up in-store perks. Despite the changes in shopping trends, consumers aren’t giving up on brick-and-mortar just yet.

Yes, there have been many store closings and retail bankruptcies, but consumers have also changed the way they shop in general. Many purchase fewer tangible things post Great Recession, and are placing more importance on experiences. It’s also important to note that, save for Amazon and eBay, few other e-commerce only retailers have gained huge influence.

  1. The top retailers in the U.S. are physical chains

According to the Top 100 Retailers list from STORES Magazine, a National Retail Federation publication, besides Amazon, the top U.S. retailers are brick-and-mortar stores. The top ten on this list include: Wal-Mart Stores, Kroger Co., Costco, The Home Depot, CVS, Walgreens, Amazon.com, Target, Lowe’s and Albertson’s. Another fact in support of physical chains, 55-year-old Wal-Mart grew 8 percent in 2016.

  1. Physical stores are more profitable than e-commerce

Yes, most of the top ten retailers also have e-commerce. However, the physical stores are where the real profits lie. Why? Unlike an in-store purchase, an e-commerce order involves factors like shipping and handling charges and the costs of returns, whichquickly chip away at margins.

  1. Millennials and Gen Z prefer physical stores

You would think that the generations that enjoyed the rise of Amazon, Facebook and Instagram (Millennials and Generation Z) would prefer shopping online. While they do spend a lot of their free time online, most actually prefer to in-store shopping to digital. According to CBRE, 70 percent of global millennials prefer brick-and-mortar retail stores. According to Accenture Research, in the U.S., over 77 percent of Gen Z (born after mid-1990s through the early 2000s) shared that brick-and-mortar was their first choice as well.

  1. The increase in the number of consumer financing programs

In recent years, the number of consumer financing programs has increased considerably. For brick-and-mortar businesses, the ability to offer a financing program, which guarantees most customers will be eligible and easily qualify for, is incredibly valuable. First American Merchant’s furniture consumer financing program, for example, gives furniture merchants the power to offer a complete payment solution to customers.

As a high-risk specialist, the “high risk” categorization of this industry is not a problem.FAM also understands the value of being able to offer financing to both good credit borrowers and borrowers with a subprime credit score. All in all, FAM’sfurniture consumer financing program ensures consumers have an affordable way to pay when they are unable to afford the full cost (costs are broken down into affordable monthly payments).

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