Why Traditional Retailers are Moving to the World of Ecommerce

The rise of the smartphone and the ubiquity of home computers made a rough go for traditional brick-and-mortar shops as consumers shift their focus to online purchases. What have retailers done as a result?

Looking to avoid the mistakes of these brands while taking advantage of the growth opportunities in the e-commerce space, retailers staked out digital territory and set up shop online.

This shift is nothing new — the big department store displaced the corner mom-and-pop shops, and before that the introduction of catalog shopping disrupted the flow of in-store traffic. Retailers are adaptive and innovative, and they can see the promise e-commerce brings.

The Profitable Allure of Ecommerce

The convenience of sites like Amazon coupled with a growing shopper preference for experiences over tangible products has caused a steady decline in foot traffic and same-store sales for retailers. Department stores ranked last in terms of sales growth - 197 out of 197 - according to the Investor's Business Daily industry tracker.

To capture a greater market share, brands that previously only had a physical shop have migrated to the ecommerce space. Websites and mobile apps have leveled the playing field between the corner shop and the big-box retailer, making the digital migration even more attractive. However, it's important that these companies realize the same processes and workflows that worked for a traditional brick-and-mortar shop will not translate to the digital market space. Implementing the same inventory management or customer order management techniques can leave the ecommerce site understocked or sluggishly fulfilling customers' orders - all of which will have a major detrimental affect on margins.

Maintaining a Physical Presence in a Digital World

Although ecommerce software provides many different options for consumers to research, compare prices and purchase items, a physical store still offers many benefits for retailers. For now, online sales only account for roughly 8 percent of total retail sales, Strategy& reported.

For instance, many customers prefer to browse for items in traditional shops so they can get a better sense of what they're buying. After seeing, feeling and perhaps even trying out the item in the physical store, shoppers will then go home or just pull out their smartphone and make the purchase online. This process, known as "showrooming," requires a retailer have an omnichannel strategy that includes both a brick-and-mortar shop and a robust ecommerce site.

Retailers with both an online and offline presence need to ensure they have a cloud commerce platform with omnichannel capabilities. It's important that these companies have a streamlined customer experience throughout both the in-store and online journey. A streamlined order life cycle allows retailers to effectively and optimally manage inventory fulfillment, customer orders and many other aspects of the ecommerce site without sacrificing their processes already in place for their brick-and-mortar locations.