Online shopping flows into offline retail space

Online shopping has become as pervasive as going to malls and stores to buy things was in the last decade. Technological advancements have made a wide variety of products available to a larger consumer base that no longer needs to put in any physical effort to shop. The last decade has been characterized by traditional stores moving their catalogs online to attract customers and make up for the loss in revenue from a substantial drop in footfalls in the stores.

However, trends in the US and China show a shift in the retail space. Amazon and Alibaba, two of the largest e-commerce platforms in the US and China, respectively, are investing heavily in the brick-and-mortar stores and storefronts.

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Amazon recently made a bid of $13.5 billion for grocery chain Whole Foods, signalling the American tech company’s move to expand its portfolio offline and on the shelves.

Alibaba too has been investing in offline stores since 2015, including the Chinese supermarket chain, Sanjiang. Amazon has taken its offline presence even further by opening a physical bookstore that sells the bestselling books on its platforms as well as other Amazon-branded products.

The shift towards offline retail signals the saturation of the online e-commerce market as well as the realization that a significant percentage of customers still rely on offline brick-and-mortar stores for their immediate needs, something online services cannot offer due to supply restrictions.

By establishing a physical store, e-commerce platforms like Amazon and Alibaba will have the unique advantage of possessing a vast supply base to augment their online presence.

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A strategy of this nature can pay dividends in countries like India where retail transactions are still predominantly carried out offline.

When online e-commerce platforms first emerged, most people termed the emergence as the death of brick-and-mortar stores. What nobody saw was that the e-commerce platforms would integrate with offline retail stores to remain relevant in the highly competitive retail space where the option to choose the best value rules the decision of consumers.

The future of retail is now moving towards an integrated marketplace where consumers can take advantage of the physical reassurance of brick-and-mortar stores and the low costs offered by online platforms. Future shoppers are sure to be spoilt for choice.

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