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The Impact of E-Commerce

E-commerce is a major factor, but not the only factor, in the drop in numbers of shoppers actually going to brick-and-mortar retail stores. Retailers that sell clothing, electronic devices, groceries, and pharmaceuticals are all suffering a loss in the amount of foot traffic. According to market research firm Statista, Retail e-commerce accounted for 10 percent of total retail sales in the third quarter of 2017. Providers of non-Internet outlets including travel agencies, book stores, and many magazines and newspaper subscriptions have been losing business to e-commerce since the early 2000s.

In addition to its impact on retail sales, e-commerce has affected how people of all ages find dating partners through web sites such as Match.com and Tinder. Additional drivers of e-commerce are massively multiplayer online games, online gambling, and pornography.

Combining Online Services with On-Site Stores

Online services provide convenience. People can access them at any time of day and from anywhere they have a broadband wireless or wireline Internet connection. Web site owners can also enhance their sites with photographs, video, and links to other locations. However, there are advantages of having both online and physical stores.

Amazon is a high-profile example of a business that initially started as an online-only business that has morphed into a combination of online and on-site retail stores. They purchased Whole Foods in 2017 as one way to establish a foothold in brick-and-mortar retailing. One of the advantages of this combination is the availability of a place where customers can pick-up packages ordered online. The ability to pick up packages at brick-and-mortar stores avoids the problem of stolen packages. Families where both people work often don’t have anyone at home during daytime hours when merchandise is dropped off and left outside. This is an issue for people that live in apartment buildings as well.

Amazon is using its own retail outlets as well as its Whole Foods division, as drop-off points for deliveries. Customers are notified when a package is available at a Whole Foods location or an Amazon Go store near them for pick-up. An individual locker at stores avoids the issue of lost and stolen packages. As a rule these orders do not incur delivery fees.

Amazon, which until recently has had an online-only presence, is now opening Amazon Go brick-and-mortar convenience stores with automation that does away with the necessity of cashiers and checkout lines. Rather, people make purchases simply by taking merchandise off shelves after scanning their smartphones into a reader to enter the store. Facial recognition is used to match individual shoppers with their credit card data on their mobile phone. In contrast, Wal-Mart has closed stores, built up its e-commerce web site, and purchased Jet.com, presumably as a vehicle for distributing products ordered online in the United States. In 2018 they acquired Flipkart Pvt Ltd, the largest online commerce site in India and an Amazon competitor there.

Currently, the Amazon Go store is not available to people without a smartphone with a credit card associated with it. Roughly 67 percent of the population had smartphones by early of 2018 according to consulting firm Statista. But, per Statista only 23.16 percent of retail sales were paid for using mobile payments.

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