In the few short years that it has been around, online shopping has fundamentally changed consumer habits. While e-commerce only accounted for 11.7% of retail sales in the US last year, the signs are there that online shopping is poised to overtake retail almost completely in the not-so-distant future. Outlined below are a few of the reasons why digital marketplaces may very well be the malls of tomorrow.
Increasing Variety of Items Purchased Online
One common argument for the staying power of malls is that there will always be certain items that consumers will prefer to see in-person before they make a purchase. While this argument may be true, it’s looking less certain than it was a few years ago. Today, consumers can – and do – buy almost everything online, even items that would seem to almost certainly require physical inspection such as cars, shoes, and more.
As consumers grow comfortable purchasing more and more products without seeing them in-person first, the idea that the need to physically inspect certain items will keep malls around is looking questionable.
Brick and Mortar Stores Move to Online Sales
Brick and mortar giants such as Walmart, Target, and most others that have survived thus far are making moves to drastically increase their share of the e-commerce pie. These moves include putting large portions of their advertising and R&D budgets into driving customers to their websites rather than their stores.
When some of the largest, most successful brick and mortar stores begin to take the approach of “if you can’t beat them, join them” it’s a pretty good indication of where the market is heading.
Increased Competition Drives Success
Brick and mortar giants aren’t the only ones opening online stores. Rather, more business owners and entrepreneurs than ever before are now opening up their own online stores. While Amazon – the figurehead of online shopping – still sees the largest portion of online sales, the competition they face from huge rivals such as jet.com and Walmart.com, as well as the competition they face from the slew of smaller digital marketplaces, is becoming fierce. In the end, this increased competition is likely to make online shopping all the more prevalent.
Since the barrier to entry for opening an online store is so much lower than it is for opening a brick-and-mortar store, one can expect the level of competition and available options to only increase in the coming years. If the market has taught us one thing, it’s that competition drives success. As consumers are given an increasingly large number of options to choose from, their willingness to abandon the malls for digital marketplaces increases as well.
Payment Gateways Make Online Shopping More Convenient and Secure
For some, the security of online shopping has always been a hangup. However, due in part to consumers growing comfortable with entering their payment information online and due also in part to the payment gateways that make doing so more secure, this is becoming less of a concern.
As advances in payment gateways continue to make online payments more secure and convenient, most consumers are actually starting to prefer paying for goods online. This marks the elimination of a concern that has long plagued online shopping and points to a future where digital marketplaces are the ones that offer the preferred shopping experience.
Are Malls Destined to Disappear?
So are malls going to vanish entirely in the next few years? Probably not, but that doesn’t mean that digital marketplaces aren’t set to continue taking away increasingly large portions of their business.
What the future is likely to give us is a market where smaller retail stores operate almost entirely online while larger chains that are in a position to survive will work to further integrate the online and brick-and-mortar shopping experience through things such as apps, Internet of Things devices, augmented reality, and more.
For retail entrepreneurs, though, now is a better time than ever to open a digital marketplace. Advances in online shopping and the technology that makes it possible now allow most anyone to create an online store that is fully able to compete with the largest stores in the industry, and with online shopping almost guaranteed to grow, the prospects of digital marketplaces becoming the malls of the future now look more promising than ever.