When you think e-commerce, you probably think of Amazon. And when you think of Big Box stores, you’ve got Best Buy, Walmart and the like, right? Well, as we explored earlier, it’s no longer about a brick or click dichotomy, but the battle is really just beginning. Amazon had a head start – e-commerce was in its DNA – but the big box shops are finally showing up and showing the world (wide web) what they’re made of.
Take Best Buy, for example. Their online revenue has doubled in just six years, and now accounts for 15% of their annual sales. On top of that, it’s growing five times faster than in previous years. You can’t argue with those numbers – or their approach. With a combination of eating shipping costs, a sophisticated digital strategy and personalized shopping content, they’ve been able to start taking back market share from Amazon.
Let’s pause for a minute. Online vs. at the shelf isn’t the only easy trap to fall into. Let’s remind ourselves of one fact that deserves repeating: e-commerce sales aren’t necessarily as large as you think they may be. In Q1 of 2018, e-comm accounted for 9.3% of all retail sales. Hard to believe when you look at our Amazon wish lists, but it’s true. E-commerce should be seen as a way to augment your business, not entirely change it.
While that stat may surprise, there’s one that’s sure to scare. Only 28% of small businesses are using e-commerce to sell their products. When you look at that stat beside the amount of sales coming from e-comm you can’t help but think of two things: customers are still going into stores (remember, it’s brick and click), and that 9.3% is going to grow – a lot – when all these small retailers get their ducks in a row and get online.
But getting your e-comm game strong isn’t easy. Look at Walmart. The fight between Walmart and Amazon is one of epic proportions, and for a long time it looked like Amazon was sure to win. But recent sales reports show otherwise: Walmart’s Q2 online sales skyrocketed up 40%. Just think about that: a 40% increase.
That didn’t just happen overnight. They created an office in Silicon Valley (dubbed “Walmart Labs”), poached top tier talent and set their sights on revolutionizing their business through digital. From nailing the fundamentals of digital user experience, to the implementation of “automated pick up towers” that provide curbside grocery pick up and even experimenting with self-driving cars for delivery, Walmart is pushing the boundaries of what’s possible to succeed at the impossible: beating Amazon at their own game.
While not everyone can be Amazon, Walmart or even an online retailer, what’s clear is this: retail is alive and well, but to succeed in it you need to be ready to evolve with the industry. With more options than ever – both online and off – customers have access to everything they want, and usually the luxury of choosing who to buy it from. Who will they pick? Only time will tell, but we’re confident the right product combined with exceptional service will always win – online and offline.