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#Amazonomnichannelretail means that today’s retailers are selling through all possible channels.
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Amazon omni-channel retail has completely upended the bricks-and-mortar retail industry. The downfall of Sports Authority and the bankruptcy of Toys Us are commonly attributed to the broad choices, lower prices, and almost-instant gratification offered by the Seattle-based online behemoth. And many more Mom-and-Pop stores that don’t have national name recognition but were still important to their communities have shut down as well. • But the story isn’t as simple as saying that online has triumphed. If anyone tells you that brick-and-mortar stores are dead, you might point out that 94% of all retail sales in the United States still take place in physical stores. With $3.9 trillion in annual sales, the 1.1 million brick-and-mortar retail storefronts in this country are here to stay. • That isn’t to say that online sales aren’t thriving. Online retailers rang up more than $294 billion in sales in 2017—a figure that is predicted to rise to $414 billion by the end of 2018. As a percentage of global retail sales, in 2017, online sales accounted for 10.2% of all retail sales worldwide. This is expected to reach 17.5% by 2021, but that still leaves a lot of demand for physical stores to snap up most consumers’ dollars.
So what’s really going on? The move to Amazon omni-channel retail • It’s a clunky mouthful, but Amazon omni-channel retail has arrived with a vengeance. Amazon omni-channel retail means that today’s retailers are selling through all possible channels: online, brick-and-mortar, and creative combinations of the two. • And omnichannel retailing pays off. Businesses that adopt omnichannel strategies achieve 91% greater year-over-year customer retention rates compared to businesses that don’t. • A case in point: Beauty chain Ulta found that its omnichannel shoppers—those customers who shop at both its online and brick-and-mortar stores—spend nearly three times as much as customers who only shop at its physical locations.
Trading places • In the new omnichannel world, everyone is jumping in with both feet. We’re seeing brick-and-mortar retailers innovate online, and online retailers venture into the physical world. • Ulta Beauty was already one of the largest U.S. brick-and-mortar retailers and is currently the fastest growing specialty online retailer after making a big digital splash in 2016. By 2017, Ulta’s digital sales had increased a staggering 71% in the first quarter alone, contributing to a 14.3% increase in overall sales for the brand. • Then you’ve got Amazon omni-channel retail moving in the other direction. Despite being responsible for 44% of all digital sales worldwide, Amazon has recently made several moves toward selling via physical stores. It bought Whole Foods, and inked a deal with Kohl’s so that Kohl’s stores will accept Amazon returns.
And recently—and, many feel, rather ironically—Amazon opened a chain of its own branded bookstores. Amazon Books are currently in 13 locations across the country, with more outlets planned. • In its 2017 annual report, Amazon reported $1.3 billion in physical store sales, breaking out brick-and-mortar business revenues for the first time.
