On June 25, Bloomberg's Matt Townsend told the tale of CJ Chu, a 24-year-old associate for a private-equity firm, whom he called "a retailer's nightmare"
Why? Chu says he does 99% of his shopping online. He even buys his toothpaste online.
Traditional retailers will generate half their sales growth online in 2014.Source: Stifel Financial Corp.
"Chu is an extreme case," Townsend writes. "Yet millions of Americans like him are abandoning stores faster than executives predicted, pushing the industry to a precipice. Traditional retailers, for the first time ever in 2014, will generate half their sales growth on the Web, according to Stifel Financial Corp. That means about $18 billion in new revenue generated this year will come from online purchases, an analysis of U.S. Census data shows."
Some highlights from Townsend's article:
- Online shopping will likely accelerate as 80 million U.S. millenials start families, buy homes and accumulate stuff.
Nobody is meshing physical and online retail well. There isn't a best-in-class (model) yet.Anne Zybowski, Kantar Retail
- Anne Zybowski, vice president for retail insights at Boston's Kantar Retail says although it's widely accepted retailers must mesh physical and online retail, "nobody is doing it well.. There isn't a best-in-class (model) yet."
- E-commerce has been doubling in size every five years. Currently the web only accounts for 10% of total U.S. retail sales. But for some categories (e.g. computers), online accounts for a third of sales.
- According to DDB Worldwide, 40% of men and 33% of women in their 20s and 30s say buying everything online would be ideal.
40% of millenial men and 33% of millenial women say buying everything online would be ideal.Source: DDB Worldwide
- “(Retail) used to be a high-touch, personalized thing, one person to another,” Peter Nordstrom, the chain’s merchandising chief, told students in April at the Fashion Institute of Technology in New York. “Now customers value speed and convenience. That never used to be part of the equation. It was a giant wakeup call for us. That if we didn’t make that part of our core competency, we were doomed.”
- “Retail will change more in the next five years than it has in the last 50,” said Chris Donnelly, who runs Accenture’s global retail practice in London.