The buzz around online shopping is not a buzz anymore.
It’s the sound of sirens in a traffic jam. Or an ultra-loud concert. Or your voice when stubbing your toe. Yep, it’s extremely loud. But is it merited?
Is e-commerce overtaking brick-and-mortar retail that quickly? Or was it just a minor window fueled by the unfortunate events of the pandemic?
Let’s dive into the data.
Online sales are eating the overall commerce share
The current market is still offline-centric. No doubt about it
You’ve probably gone out and bought something in the past few days, haven’t you?
But the reality is that the digital transformation is creeping in on our consumer behavior as well. And over time, e-commerce might slowly take away the offline shopping experience.
At which rate? Here’s how it looks like:
In 2022, e-commerce accounted for 15% of all US retail sales. This year, it’s already at 18% and is expected to go north of 20% by the end of 2026.
So online shopping will eat into the overall market share. But it will hardly overtake it. At least in the near future.
The situation is similar across the globe:
The value of total ecommerce sales is expected to jump from $5.8T in 2022 to $9.4T in 2026 worldwide. Physical retail sales will also grow, but at a slightly slower pace.
However, somewhere between 2022 and 2024, forecasts say that brick and mortar sales will stagnate, amounting to just 0.44% growth between this year and the last.
At the same time, e-commerce doesn’t show any signs of slowing.
In terms of sales value, at least…
📈 Are ecommerce sales growing at the rate you read online? Turns out, it might not. But that’s a topic for a different Data Story—that we covered earlier.
Who wants to leave the house?
The rate at which online shopping trumps offline differs from generation to generation.
Who do you think wants to stay at home the most? Let’s check:
Apparently, it’s millennials. With 45% of respondents preferring to shop online. And only 24% prefer to stretch their legs.
That’s even more than Zoomers—who also prefer to shop online, but not at that rate. Only 36% love online shopping, while 29% would rather go to stores.
As we move to a more elder demographic, the situation changes.
Gen X still prefers to shop offline, albeit slightly (32% vs 30%). However, baby boomers definitely prefer to do their shopping offline—with 41% preferring in-store, and only 20% prioritizing online buys.
If your target demographics are baby boomers, you might want to go the extra mile to make your ads hyper-targeted and shopping experience as seamless as possible.
👴🧒 Different generations, different expectations. No matter whether you sell online, or offline. We’ve covered a few in our previous stories, so check it out:
Now let’s see how the offline vs online shopping conundrum looks in different markets:
Reports say that the US was a bit further ahead when it comes to online shopping compared to the United Kingdom and Australia last year.
But overall, if you target any of these markets, you might find success with online sales.
Also, going by the other data, we can assume that there might be even more weekly e-commerce shoppers today in all three markets..
Given that the rate and frequency of online shopping is rising, the competition to stand out and sell in the e-commerce market is probably going to get tougher.
So while there might be more e–commerce shoppers, there will also be more stores, more competitors, and more online advertising money poured in.
Something to think about…
Why do people choose to shop online?
Yes, it’s convenient and time-saving. That’s obvious.
But is there something in the data that might be interesting—and not so obvious?
Apparently, the fact you can shop whenever, even in the middle of the night—is a big factor. In fact, it’s (48%) almost as equally important as saving time (51%)
Another determining factor besides saving time is… saving money (46%). Obviously.
Not only saving on commute costs, for example. But having discounts and special offers clearly displayed on the website makes a big difference. As are two magical words: “free shipping.”
Besides that, this chart tells us a lot about what you can do to improve your shopping experience.
Here are a few suggestions:
Suggestion #1:
The data: 31% say the internet helps them source hard-to-find products.
The tip: Brand visibility—and discoverability—should be your priority. Especially on search engines. It’s where customers will try to source.
Suggestion #2:
The data: 30% prefer online shopping because they can use their phone.
The tip: Optimize your online store for smartphones and other smart devices.
Suggestion #3:
The data: 22% say reviews help them make better decisions.
The tip: Make customer reviews visible in your store so your customers feel more comfortable. Incentivize happy customers to leave reviews by offering gifts or other incentives.
When does offline shopping beat online shopping?
As we’ve seen earlier, shoppers still enjoy the good walk to their favorite stores.
And for good reasons, usually:
Of course, 52% of shoppers prefer brick-and-mortar stores when they need something immediately. For essentials however, you already have instant delivery services so that factor might also diminish over time.
But check the next three on the list—all issues are related to the physical aspect of the product.
You can’t replace it like-for-like online. But you can get close.
What can you do: If your store has high-quality product shots, detailed product descriptions, honest reviews—and even some upscale tech like augmented reality try-ons—there’s a chance customers might feel as if they’re in the store.
Furthermore, some of the reasons listed here can also help your online business thrive even among the “agoraphilic” crowd.
- 37% want to avoid paying shipping fees, while 20% want to avoid shipping back products, or paying return fees (14%). The solution here? Free shipping and returns. If you can handle it.
- 21% want to get a better sense of products the website is lacking. Which you may fix with descriptive listings and better inventory management.
- 16% want face-to-face assistance. Something you can at least try to replace by exceptional customer support.
And that’s just a few tips.
↩️ Free returns are convenient. But they are also costly. A $743B in 2023, in fact. Read more in one of our earlier Data Stories.
Why not both?
E-commerce is gaining ground on offline shopping.
But physical stores aren’t fading anytime soon. Brick–and–mortar still reigns supreme from immediate needs, and more importantly—tactile experiences.
On the other hand, online shopping wins for convenience, and often saving as well.
The future? A balance of both, probably. Especially as consumer habits evolve.
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