Take one look at Best Buy scrambling to hang on to market share and it’s easy to see how eCommerce has been crushing brick-and-mortar retail’s business for a while now, especially in developed markets.
According to a new report from Morgan Stanley’s internet and retail team:
“Fulfillment execution is key to realising eCommerce’s disruptive potential. By 2016, our AlphaWise survey and global eCommerce model suggest a nearly 50% increase in penetration of retail sales, to 9.3% (from 6.5% today), surpassing $1 trillion.”
And the market is far from saturated.
Photo: Morgan Stanley
Fulfillment execution will remain the key factor driving growth, said the report, followed by price, selection, convenience, distribution and cost structure.
More specific to the U.S. market, the extent to which eCommerce will give brick-and-mortar a run for its money will depend on:
1. How well eRetailers innovate when it comes to fulfillment
2. Investments that will give eRetailers the ability to lower their price points, which will lead to higher sales but at lower margins