So, is it the end of offline retailing?

Igor Melo

Head of Onebeat Brazil


What is the future of physical retail stores? Does commerce on the streets and malls tend to end? Or be eclipsed by online sales? Personally, I don’t believe it. There are studies that support this thesis. Last year, Euromonitor released research that indicates that, at least until 2025, even with the growth trend in e-commerce, physical stores will continue to account for 82% of total sales. And it’s not just. Nothing indicates that this percentage will change quickly after that date. Another survey with American retailers – this one carried out by Wynshop companies, in partnership with Incisiv, specialized in digital transformation – reports that 86% of them are dissatisfied with the results (in other words, profitability) of the online arm of their business. It is certainly no different in the rest of the world. It is possible that, in some markets, this phenomenon may be even worse, due to logistics and infrastructure issues.

There is a charm in physical retail stores that is irreplaceable: the customer is attracted by the coordinated presentation in the store, being able to experience the experience idealized by the style, merchandising and product team, in addition to getting, on the spot, what he wants and leave the store carrying the product under your arm. Add to that your contact with the product, the touch, the experience of texture, aroma, weight, and fit. Enjoying this moment is especially comforting. As much as technology advances, and as delivery systems become effective and reduce delivery times, the pleasure of buying in person, of immediate consumption, will hardly be surpassed. At least, not so soon.

In the western world, shopping is an experience that is part of everyday life. Consuming is no longer a necessity, something mandatory and unavoidable, to supply a specific need. For millions of people, shopping goes much further. It is indeed a rewarding activity and, for many, it has become a leisure program.

Consolidated cultural systems do not tend to change so quickly. These rapid changes happen when a technological disruption occurs that adds unquestionable value to a product or service. You can’t compare streaming services like Netflix to old video stores. Likewise, Spotify cannot be equated with any music delivery system other than online. Or, still, the advantages of transport services by application in relation to the traditional taxi. The advance of these recent technologies in relation to those that preceded them is indisputable, and causes rapid change in customs. However, this is not the case with e-commerce, which adds a number of advantages to the sales process, but entails many other disadvantages.

Despite this, offline retail should be on the lookout. A priori, online commerce will continue to grow and companies in the sector will surely have to move towards the integration of offline and online. I also believe that any technology that can be added to improve the customer’s shopping experience should be evaluated and considered. Among them, technological systems that allow consumers to check different product options, combine pieces of clothing or other possibilities. After all, they can result in an increase in sales conversion, as well as facilitate and speed up the purchase and payment process. Here, the omnichannel concept gains relevance, in which the online versus offline duality ceases to exist and the platforms start to act in an integrated and complementary way. Surely, all of this is easier said than done. But technological changes gradually impose themselves and we have to deal with them.

My point is: to stay alive in increasingly competitive environments, retail must not neglect online, nor lose what characterizes its essence and profitability. I’m talking about ensuring coordination, attractiveness and availability of products, so that the consumer’s in-person shopping experience is not frustrated. Even because, if online still does not represent a real threat to the physical store, the competitor next door remains a risk. It has to be overcome. Thus, as long as physical retail is able to deliver a good shopping experience, it will hardly be surpassed – either online or by the competition. At least as long as the vast majority of humans choose to live in the real world and not in parallel digital worlds (metaverses).