Online Retail Disruption: The Disruption Series

Online Retail Disruption: The Disruption Series

It wasn’t all that long ago that when you needed groceries, you went down to the nearest grocery store and did your shopping. If you needed clothes, you got yourself to your local department or discount store or even placed a mail or phone order with your preferred catalog company. Then you waited for your purchase to arrive, all the while wondering where it was and how long it would take. If you were in need of books for your college courses, you went down to your school’s bookstore or the local bookstore.


Today, online retail shopping has changed the face of how we get the items we need and want. From bread and makeup to home décor and birthday gifts, there aren’t many things that can’t be purchased online. But you knew that already, didn’t you?


Online Shopping by the Numbers

In fact, the analytics firm comScore recently reported that consumers are completing more purchases online than in brick and mortar stores. The survey, done in 2015, revealed that 51 percent of respondents do their shopping online. This number is up from 48 percent in 2015 and 47 percent in 2014.  


The Wall Street Journal reported that based on the numbers from Forrester Research, approximately 190 million consumers in the United States will shop online throughout the course of a year.


All of this online shopping has caused major retailers to take notice. Stores that have seen their sales margins shrink with the rise of online shopping include:

  • Macy’s
  • Nordstrom
  • JC Penney
  • Kohl’s
  • Walmart
  • Target


As of December 30, 2016, online behemoth, Amazon, had a market value of $355.9 billion, compared to a combined value of $297.8 billion for Walmart, Target, Best Buy, Macy’s, Kohl’s, Sears, Nordstrom, and JC Penney. All of these stores but Walmart have seen significant declines in their value, most between 30 percent and 64 percent. Walmart, who has recently expanded their online shopping services, has only seen a one percent decrease in its value. Keep reading for more disruption information.


The Amazon Dynasty

One of the biggest and most popular online retailers is Amazon. What started as an online bookstore has exploded into a major retailer and technology hub. According to the 2017 Walker Sands Future of Retail study, an astounding 84 percent of consumers in the United States have made an Amazon purchase in the last year. Furthermore, 55 percent of them were Prime subscribers.


Part of what is driving the success of Amazon and other online retailers is the Millennial generation. They are the first generation to be native to the digital world. Millennials are attracted to a consumer experience that easily fits with their lifestyle. Amazon is so attractive that 79 percent of this generation has made a purchase via the retailer in the past month and 55 percent of those have a Prime membership. These statistics represent more than any other generation.


“Remote shopping, while entirely feasible, will flop.” – Time Magazine, 1966


Along with convenience and price, another pillar in the Amazon dynasty is Amazon Prime Day. This special shopping day gives Prime members exclusive offers, early access, and promotional deals. Modern consumers are drawn to a loyalty status, especially one that comes with exclusive perks and benefits.


Another part of their success is that they never let themselves get too comfortable. Amazon is continually changing to meet the needs and wants of their customers and even meet needs customers didn’t know that they had in the first place.


In addition, Amazon is disrupting the supply chain industry with technology in operational efficiencies. They recently added an autonomous robot program in their operations department. Whereas some companies only provide digital technologies to some branches of their business, Amazon isn’t afraid to use a holistic digital approach throughout all facets of the company. Whether it is upstream or downstream, corporate culture, or customer service, Amazon is continually adding to its fleet of A.I. (artificial intelligence) machines.


Other Online Retailers

In response to Amazon’s popularity with American consumers, hundreds of brick and mortar stores have opened their own shopping websites in an attempt to keep or win back customers. Thanks to this steep competition, you can purchase almost anything you want on the internet today.


E-commerce grows nearly 25 percent each and every year. However, only some 46 percent of small businesses in America have a website. By 2026, it is predicted that both Millennials and Generation Z will desire the kind of instant access and fast turnaround that can only be experienced with online shopping. With 96 percent of Americans having made an online purchase at some point in their lives, online shopping is sure to spread like a wildfire in the near future.


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