Are chains cannibalizing their own in-store sales with e-commerce?

Worried about the cannibalization of e-commerce to your business model? Think again.

E-commerce doesn't take away from your operations; it adds to them. Retail chains need to think beyond whether they lose sales from their brick-and-mortar stores to their own e-commerce and more towards what happens when they don't offer the convenience of online shopping to their customers.

Failing to Compete

When you don't offer online shopping, you are failing to give your customers the convenient shopping channel they crave. According to Statista, e-commerce sales were $322.17 billion in 2015 and estimated to grow to $485.27 billion before 2021 - and that's just e-commerce sales in the United States. Without providing an online shopping experience for your customers, you risk them going to your competitors who do offer e-commerce buying options and possibly abandoning all of your shopping channels - even your physical stores.

Online Research

And, that's not the half of it. Companies need to look beyond shifting their operations to digital and more towards looking at e-commerce because it is a way to build loyalty. E-commerce actually influences purchasing decisions. Over 80 percent of all people start their shopping online before buying anything, online or otherwise. They do so because they are conducting research. They want to look at the products retailers have to offer, read reviews, and compare prices. On average, they look at three different retailers before making a buying decision. To compete, you need to have a website that is convenient and searchable. If you don't offer e-commerce, you are missing out on these shoppers.

Social Media

E-commerce also provides important links with social media. Remember, people don't only look at retailer websites when they are researching what to buy and where. They also go through social media. They are looking for peer reviews and visuals. According to Crowdfire, around 71 percent of today's online shoppers look at social media for clues on what to buy, and more than one-third will connect with the brands they are considering while debating a purchase.

Expanding Your Brand

Having an online presence that has e-commerce options available can help you connect with people who may not be in your geographical area. In this way, e-commerce can help you broaden your brand's reach. Offering online shopping can also expand what you have room to carry in your stores. Stocking a wide variety of products often isn't a possibility if you are limited in your floor space. E-commerce solves this issue and can help you see whether you are offering the products (and product variations) your customers want most.

"An analysis last year by HRC Advisory found that e-commerce gains had been “chipping away” at sales at physical stores across a number of soft goods channels since 2011. Said Antony Karabus, HRC’s CEO, at the time, “Most retailers haven’t yet figured out how to grow and maintain brick and mortar profitability while trying to keep up with the likes of Amazon in today’s increasingly digital environment.”

Read the complete article on RetailWire.