There is an important story unfolding that will have a dramatic impact on consumers over the next decade if bricks-and-mortar retailers don’t adapt — and soon.
To add some further perspective on the magnitude of this shift, according to a recent study by Euler Hermes e-commerce has been growing at a 10.5 per cent annual pace and showing no signs of slowing down. This comes even though new e-commerce entrants are posting ultra-low profit margins with many struggling to be cash-flow positive.
While the change is being driven by younger generations such as Gen-X and millennials, we believe the baby boomers will soon begin to mirror their shopping habits, and that as a result we are only in the early stages of this paradigm shift. Retailers wanting to not only survive but prosper in this new environment are going to have to adapt their business models quickly by either moving their services online and/or turning their stores into experiences that offer an extreme level of convenience and personal service.