E-commerce is on the rise all around the globe and its advent has challenged the business of the conventional brick and mortar shops. An increasing focus of the business on e-commerce means that a higher percentage of sales will come from e-commerce and they’ll most likely exceed sales growth as compared to brick outlets.
The exponential e-commerce growth is driven by increasing mobile platforms for online shopping, and while the share of e-commerce will grow, sales productivity in physical retail outlets will decrease. Furthermore, as compared to e-commerce, brick and mortar shops will see reducing margins due to the fixed costs incurred by the physical outlet.
E-commerce will grow constantly, and with increasing growth, businesses won’t be able to use price as a competitive advantage as it’d be largely balanced out by the internet. In the future, businesses will need to turn their attention to e-commerce techniques which will immensely help in managing margins, sales and productivity.