Gap between online and offline retail is shrinking

Internet Retailing

12th Oct 2016

A new eMarketer report, US Holiday Ecommerce Preview 2016: Mobile to Fuel Explosive Ecommerce Growth (paywall), says the gap between e-commerce and physical retail is shrinking, thanks to the rise of mobile, better fulfillment options and location-based mobile advertising.

According to the report, mobile is increasingly bridging the divide between physical and digital commerce, with more and more consumers using their mobile devices instore to compare products and look up information. A 2015 Facebook IQ study of US internet users found that around 45 per cent of shopping trips included some mobile shopping. eMarketer expects this trend to accelerate during the holiday season.

Improved inventory systems and fulfilment options are also fueling the online-offline integration. Most large retailers now offer click and collect, according to eMarketer, although a 2016 survey from Boston Retail Partners found only 42 per cent of retailers overall supporting the service. Meanwhile, some retailers are able to ship items from store, between stores or directly from the manufacturer, thanks to better integration between back-end systems.

The upshot of all this is that e-commerce is now a viable shopping option right up until Christmas or Hanukkah. The majority of US retailers reported a cutoff date of December 21 or later for online orders ahead of Christmas 2015, according to Multichannel Merchant. With only a month between the US’s major shopping day, Black Friday, and Christmas, eMarketer suggests a surge in last-minute shopping this year. This presents a significant opportunity for retailers, especially as foot traffic continues to fall.

Location-based mobile advertising is also shrinking the gap between retailers’ online and offline channels. With people increasingly shifting their browsing to mobile devices, retailers have seized on the ability to target ads to customers based on their location. According to BIA/Kelsey, spending on mobile local ads will reach US$12.8 billion in 2016, with much of it spent during the holiday season.