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“E-tail” Likely to Overtake Traditional Retail

May 30, 2012

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The growing popularity of tablets and other electronics has not only improved information access for consumers (technology savvy or not!) but also widened selection, and made online shopping both natural and logical. These recent developments have strengthened the acceptance of the new online shopping trend we call “e-tailing,” as well as online advertising among investors, and the changed the way the supply chain works.

For example, as those weeks before Mother’s Day turned into hours, retailers’ messages, like a ticking clock, got louder each day. Consumers heard the noise loud and clear. The National Retail Federation estimated Mother’s Day spending to reach $18.6 billion this year, up 14 percent from 2011.  In fact, Mother’s Day is now officially the biggest shopping period behind Christmas, and a major sales opportunity for businesses nationwide.

Online commerce, a dominant trend changing the way we shop, has a lot to do with those numbers.  “E-tailing” is thriving globally at three to four times the rate of traditional retail buying.  For Mother’s Day alone, the NRF reported that online shopping jumped to nearly 26 percent of all purchases, up from just over 21 percent last year. 

We expect that within 10-15 years, e-tail will reach well over 50 percent (possibly closer to 70-80 percent) of all retail activity that doesn’t require you to physically be in a location.  Even for those activities where your physical presence is required, like dining out or getting your hair cut, the e-channel will help drive traffic.  

The trend is good news in a number of ways:

• For customers able to scour websites for deals, online shopping can be cheaper, quicker and more convenient.

• It’s forcing retail establishments to rethink business to leverage the advantages of e-tail.  While it may mean fewer jobs in brick and mortar stores, retailers are growing their product and web design sectors due to the new method of operation. 

• For companies like FedEx, the trend increases our deliveries, especially during peak season, improving our bottom line—whether a product is purchased or returned.

Just like your mother’s well-meaning worry, e-commerce is not only here to stay, it will grow over time.  If you’re not buying her gifts online now, you likely will be soon.

Comments

    MayLyn says:

    Thank you so much Gene Huang for sharing your wonderful information about E tail and how it will improve the way FedEx does business! I love being a FedEx volunteer and comming here to read the blogs is another thing that I enjoy too!

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