Online retail sales will account for 13% of global retail by 2020, or $3.8 trillion out of a global retail market of nearly $30 trillion, according to a new study by England-based digital commerce and fintech consulting firm Juniper Research.
The report, "Mobile & Online Remote Payments for Digital & Physical Goods: Opportunities & Forecasts 2018-2022," notes that many retailers, like Sears, are shuttering stores, but "most are now using apps and online channels to augment offline spend."
The top three retailers among 18 leaders in e-commerce identified by Juniper are: The Home Depot and U.K. department stores John Lewis and Sainsbury’s.
It’s clear from Juniper’s research that many of the leaders in e-commerce are actually brick-and-mortar stalwarts.
"Some retailers, particularly those with a strong dependency on grocery, believe that moving spend to online was counterproductive, given the high levels of marginal costs and the perception of reduced customer loyalty," report author Windsor Holden said in a statement. "However, development of a successful, integrated omnichannel offering can ultimately enhance loyalty levels and increase consumer-spend levels."
In addition to the top three flagged in the report, the authors note that Walmart "has demonstrated its commitment to facilitating an integrated experience."
Although Walmart’s annual sales of roughly $480 billion come from all channels, they derive by and large from brick and mortar. But these days physical strength depends on a strong e-commerce presence. Walmart has also in recent years experimented with a series of digital efforts, including its purchase of new e-commerce brands as well as its Store No 8 innovation hub, which focuses on technologies like robots, VR/AR and AI.
But retail analyst Brendan Witcher urges companies not to get distracted by flashy technology like VR. "[Retailers] fail to understand that consumers are not that complex — they have basic needs," he said. "Target came out with this announcement last year, that they would stop working on robots and return to their core. That was the smartest thing they did. Retailers have to remember that at the core they still have to be good retailers."
Data outdoes flashy tech, Witcher insists, at least when it's used to meet customers' needs. Retailers tend to fundamentally misunderstand Amazon's key differentiator, he said, which is creating an ecosystem designed to work for its customers.