With the advent of the internet, retailers have had to shift/adapt to the new and prevailing era of e-commerce. Either they did this or risked becoming obsolete in their respective markets. Consequently, the rise of e-commerce and the resulting changes in consumer behavior have reshaped the traditional models of retailing.
In this article, we will be conducting an analysis of the global shift from brick-and-mortar stores to e-commerce. This analysis delves into different angles of this shift and the underlying factors driving it.
What is the Difference between E-Commerce and Brick-And-Mortar Retail?
E-commerce operates on the internet via digital platforms, allowing consumers to shop and make transactions online from anywhere at any time.
In contrast, brick-and-mortar retail involves physical store locations where customers must visit in person to purchase items.
Demographics of Online Shoppers.
The transition from physical storefronts to online shops opened up a world of possibilities for businesses. They could now reach a wider audience and operate 24/7. Below, we analyze the demographics of this wider audience of online shoppers, generation by generation.
Each generation displays unique behaviors when it comes to shopping online. The youngest generation of adults popularly known as “Gen Z” are the leading demographic that engage in e-commerce. This is propelled by their digital nativity and preference for convenience. Statistics show that in the US, 29% of Gen Z shoppers use reviews when choosing products. They are also heavy users of social media for purchase decisions.
The next generation is known either as millennials or Gen Y. 67% of US millennials prefer online shopping, spending an average of 6 hours shopping online every day.
The generation after them, Gen X, also spends an equal average of hours shopping online daily. 56% of Gen X in the US prefer online shopping and, altogether, they have the highest average yearly expenditure of almost $70,000.
Baby boomers, the demographic in their 60s, accounted for 14.6% of American digital buyers in 2020. Although they don’t shop online as often as other generations, they have a higher spending power than most generations.
Lastly, senior citizens are the oldest demographic of online shoppers. 28% prefer online shopping, with a lower online shopping frequency compared to other generations. Nevertheless, increased digital literacy and targeted user-friendly interfaces employed by online stores have increased participation in e-commerce for older generations.
In terms of gender demographics, statistics show that 44% of female shoppers and 53% of males prefer to browse retail items online as opposed to in-store. Key indicators of a brick and mortar decline.
Access to Technology by Age Group.
Access to technology across different age groups has been key in enabling the shift towards e-commerce. According to Pew Research Center data, 96% of adults aged 18 to 29 own a smartphone. Meanwhile, only 61% of those aged 65 and older own one.
Younger individuals have more access to digital devices and high-speed internet. Thus, integrating online shopping into their daily routines is easy. However, the older the age group, the lower their access to these technologies.
In terms of internet usage, virtually all adults aged 18 to 29 (99%) and 30 to 49 (98%) use the internet. 96% of those aged 50 to 64 and 75% of those aged 65 and older report being internet users. However, there are still gaps in home broadband access, with only 64% of adults aged 65 and older having such connections. This is significantly lower compared to 86% of those aged 30 to 49 and 79% of those aged 50 to 64.
According to Pew Research Center data, 96% of adults aged 18 to 29 own a smartphone.
Worthy of note as well is the use of social media platforms like Facebook, Twitter, and Instagram. This is because social media platforms play a crucial role in shaping consumer preferences and behaviors. Social media usage is more prevalent among younger adults, with 84% of those aged 18 to 29 and 81% of those aged 30 to 49 using social media. This is as against 45% of adults aged 65 and older. However, the presence of older adults on social media has grown significantly in recent years, with a fourfold increase in usage among those aged 65 and older since 2010.
For older adults, the challenge lies in lower exposure to technology and hesitance towards new digital interfaces. Enhancing their accessibility and providing digital education can significantly encourage their participation in the shifting e-commerce boom.
The Impact of Supply Chain on E-Commerce.
Supply chain efficiency is critical to the success of e-commerce. Recent years have shown that disruptions in the supply chain, from production delays to logistic bottlenecks, can significantly impact the availability of goods and the overall consumer experience.
Online retailers are increasingly investing in their supply chain networks. From employing advanced predictive analytics to manage inventory better, to partnering with third-party logistics providers to optimize shipping. These are some of the strategies being used to minimize delivery times and reduce the impact of supply chain disruptions on consumer satisfaction.
Consumer Expectations in E-Commerce.
As e-commerce has evolved, so have consumer expectations. Today’s online shoppers expect a seamless shopping experience from retailers. This includes user-friendly website navigation, diverse payment options, and rapid delivery services.
Consumers also expect effective customer support systems capable of resolving issues promptly. To address these expectations, e-commerce retailers are continually adapting by implementing technological solutions such as AI chatbots, website optimization for mobile devices, personalized store feeds, and so on. These solutions enhance consumer shopping experiences and improve service efficiency.
The Difference between Marketing Online and in a Brick-And-Mortar Business.
Marketing online primarily leverages digital channels such as social media, email marketing, and search engines to target a broad, global audience. This is done with personalized ads, content marketing campaigns, and SEO strategies. These have proven to be more effective than traditional marketing strategies in the e-commerce landscape.
On the other hand, marketing for a brick-and-mortar business ordinarily focuses on local advertising, in-store offers, and physical signs to attract customers to the physical location. Emphasis is on regional reach and face-to-face promotion with minimal (but increasing) efforts toward digital marketing.
Conclusion.
The global shift from brick-and-mortar stores to e-commerce marks a significant transformation in consumer behavior and retail operations. As technology and supply chain advancements continue, the momentum of e-commerce is set to reach for the stars. Taking everything into account, success for any retailer in this new era depends on being able to adapt to these continuous changes.
