The Depth of the E-Commerce Effect

Updated: Apr 15


According to a recent report from the Commerce Department, fourth quarter e-commerce sales rose by 12.1% year-over-year to a new record of $132.8 billion (seasonally adjusted). This ties-up total sales for 2018 at a record $513.6 billion, a year-over-year increase of 14.2%. At this point, e-commerce sales have effectively doubled over the past five years, and brick-and-mortar retail is clearly feeling the impact. The devil, however, is buried in the details. In an attempt to minimize the e-commerce effect, there is an ongoing argument that e-commerce represents less than 12% of total retail sales. This is true when accounting for the 52% of brick-and-mortar retail that includes gas stations, auto dealerships, and food and beverage retailers. These categories have so far proven to be more resilient to the e-commerce effect. What about the other 48%? The categories, particularly those that correlate with the increased number of bankruptcies and liquidations over the last five years, is where the slaughter has no end in sight:

  • Department Stores

  • Toys

  • Apparel and Shoes

  • Sporting Goods

  • Jewelry and Accessories

  • Electronics

  • Music and Video 

  • Hardware and Hobby

The e-commerce evolution has been occurring for nearly two decades with many more years to come, and there is no clear picture of what it will ultimately look like. However, one thing is for certain - those that want to survive have invested heavily in online and omnichannel operations, efficient fulfillment and timely delivery options. Amazon is an easy target to blame for effectuating the change, and clearly is leading the charge, but many more are and will continue to succeed in adapting.

ATLANTA

10945 State Bridge Road

Suite 401-213
Alpharetta, GA 30022

Phone: 770.744.0753

Email: Info@FortisBA.com

  • LinkedIn
  • Twitter

© 2020 Fortis Business Advisors. All Rights Reserved