Let the E-Commerce Commence: How Online Shopping Has Contributed to the Collapse of Physical Stores

In the same eventuality of easy one-click ride-share apps resulting in a serious decreasing of taxi cab fares, the evolution of online shopping has kickstarted the Almighty Retail Apocalypse. After all, why would anyone bother going out of their way to find a store when whatever they’re looking to purchase can be found in just a few clicks? There’s virtually no waiting in these kinds of e-environments: No crowds to fight through, no distance to overcome. Whatever dress, whatever shoe, any color, any size—signed, sealed, delivered, it’s yours within seconds.

If there’s one thing that millennials universally experience, it’s a sense of urgency. Who among us hasn’t, in a moment of frantic impulse, ordered something off Amazon and immediately began tracking the package? “Soon” is never soon enough—that’s what gives online shopping the edge. Not only does an online presence appeal to a younger audience, but the so-called ‘Amazon effect’ has increased the weight of instant gratification for consumers across the board—and wreaked havoc on retail as we’ve come to know it, as a result.

Evidence of the increased pressure the ‘Amazon effect’ is placing on brick-and-mortar stores isn’t hard to find. Take Payless Shoe Source, for instance—a retailer that, by own chief revenue officer Stephen Marotta’s own admittance, “emerged from its prior reorganization ill-equipped to survive in today's retail environment.” Struggling to understand this changing consumer market subsequently led Payless to the decision to liquidate all 2,500 of its stores in 2019. 

Another example? Last year, Macy’s closed 130 of its 730 stores, cutting 3,900 jobs. Through careful selection of which locations are set to be closed, Macy’s retained 12 percent of sales because online orders can be picked up in-store, which, more often than not, resulted in customers buying additional items. Its partnership with Brookfield Asset Manager will also help redevelop as many as 50 locations. Other brands are also already making strides to retain their customer base. Pizza Hut, for example, redesigned its restaurants to include express stores that focus only on delivery and take-out. 

Brands that adjust to modern expectations will ultimately buy themselves a longer shelf life. Changes like these will continue well into 2020. Retail brands should try to retain their customer base with an online presence, or risk losing them to the ubiquity of Amazon.