With online retailers such as Amazon continuing to grow exponentially, to many people the age of e-commerce is finally here. It’s been over two decades since most people were introduced to eBay, Amazon, and online shopping, but the real growth has occurred in just the past few years. In just the past five years e-commerce has doubled in size, with over 11% of all retail sales now made online, or over $500 billion per year. If anything, that amount of e-commerce will only continue to increase.
You might think that 11% is peanuts, until you remember that over 50% of retail sales are made at gas stations, grocery stores, and car dealerships. Those are all difficult areas for e-commerce to break into. What that means, however, is that about 25% of all other retail sales are made online. Certainly in many urban areas of the country the preponderance of Amazon delivery vehicles and the large number of packages sitting outside people’s front doors every day make it seem like 11% is dramatically understating the popularity of e-commerce.
Recent polls have indicated that 64% of consumers start their search for new products by browsing to Amazon. And 74% will go to Amazon first when they’re ready to buy a specific product. Amazon is the 800-pound gorilla that is dominating e-commerce. And it isn’t just online merchants who are taking a beating from Amazon, it’s brick-and-mortar retailers too.
After all, why fight heavy traffic and busy parking lots on a weekend just to spend several hours looking at overpriced clothing and goods at a mall when you can find exactly what you want for less money in less time online? With mall anchor retailers such as Sears, JCPenney, Kmart, and others facing imminent ruin because their business models can’t compete against the likes of Amazon, malls around the country continue to decline.
After a half century of dominating the American retail experience, malls may finally go the way of the dodo. Only in urbanized areas will malls or similar shopping districts likely maintain a presence, as long as they remain in high-density population areas or in close proximity to public transportation. As for malls in more suburban areas and in smaller cities, they may very well turn into warehouses or distribution centers for online retailers such as Amazon, bringing the e-commerce revolution full circle.