THE RACE IS ON. If you are won- dering where to, you should head over to the intersection of E-commerce Avenue and Brick-and-Mortar Road. Retail
giant Walmart acquired Jet.com earlier
this year in order to accelerate its digital
capabilities. Meanwhile, e-commerce
elites like Amazon have crossed over
to the other side, laying bricks down to
build physical stores.
It seems like the rush to capture the
omni-channel consumer is turning the
market inside out—and that may be a
good thing. As per usual, when it comes
to expansion, the consumer always
wins. As a customer, if you regularly
shopped at Walmart
but hated the traffic
and crowds, you can
now log on to Walmart.
com—and with the
inclusion of Jet.com,
your online experience
can only get better.
It is obvious how
the consumer benefits
from these initiatives,
but what do retailers
stand to gain as they
enter this new territory? Are the benefits as obvious and
simple as “more sales?” Could there be
pitfalls to this kind of expansion?
The evolution of e-commerce to
brick-and-mortar is fairly straight-
forward in this respect. The physical
presence of a store helps an e-com-
merce site feel more “real,” drawing in
customers through experiences they
can feel and touch rather than just see.
The same cannot be said for bricks
and mortar retailers heading to the
e-commerce side of things. Sure, any
retailer can sell products, but good
retailers are great at making sure shoppers spend a lot more money when
in-store. The average shopper spends
about $55 per trip when they enter a
Walmart store. At Target, they spend
$62, and at Costco, that number jumps
So why does a shopper who enters
the store to buy milk and diapers end
up with a total purchase of $55? Simply
put, Walmart—and its competitors—is
good at getting shoppers to buy more
than planned by leveraging how they
place their products. It is no coincidence that when a shopper goes to
buy diapers, they have to walk past
formula, bottles, bibs, wipes and all
manner of creams first. It is an easy yet
effective reminder that while they are
in store, they should pick up everything
else they might need—and a couple of
things they do not. As a retailer, you are
happy when you are able to increase
your shopping basket. A larger basket means a consumer is buying more
things per trip, which increases revenue, volume, and the movement of
products in and out of your store.
As brick-and-mortar retailers hur-
tle toward digital competitiveness,
they are only just beginning to fig-
ure certain things out. For instance,
while they are giving the consumer an
overall greater experience by offering
online shopping, they are actually put-
ting themselves at a bit of a disadvan-
tage. Research shows that the average
online shopper buys only half of what
they would in-store. After speaking to
several families that tried buying online
rather than heading to the store, their
experiences mirrored this research.
“Great shopping experience online,
and I saved a ton of money because I
only bought what I needed,” was a very
After digging a little deeper, we also
found that they were not heading to the
store more often to offset their online
shopping either. The digital shopping
experience was far less distracting,
resulting in very little unnecessary pur-
chases, which meant less time spent
online, and less money spent overall.
While these are not definitive
results, they are troubling nonetheless.
As brick-and-mortar retailers continue
to test the e-commerce waters, they
will have to figure out the best way to
merchandise online, making their dig-
ital shop a place where the consumer
will purchase more than just the basics.
If they do not, they are going to have to
watch as their shopping basket shrinks
to disappointing levels.
Phil Chang monitors the retail
space for Hubba. He can be
reached at firstname.lastname@example.org.
Research shows that the
average online shopper
buys only half of what
they would in-store.
A DIGITAL DILEMMA
Retailers need an online presence, but it may be costing them sales.
By Phil Chang