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Why Physical Retail Remains Relevant in the Age of Online Shopping

Physical retailers are still holding on to market share despite online growth.

Despite the growth in popularity of online shopping, the data shows that the majority of consumers still buy from physical retailers.

There is no disputing that online shopping will continue to increase due to a seemingly limitless inventory that is never out of your size, and the convenience of having your goods shipped directly to your doorstep. However, data provided by GlobalData shows that while online shopping is certainly growing with experts predicting about $1 out of every $10 will be spent online in 2017, signs still point to physical retail remaining king for the foreseeable future. In fact, data suggests that physical retail is likely to increase over the next five years, though not necessarily at the rate of other sectors.

2016 Sales Estimates

In 2016, retail stores earned:

-- $3.2 trillion from direct sales
-- $119.6 billion from online purchases after browsing in store
-- $81.7 billion from online purchases received in store
-- $10.2 billion from purchases on kiosks and apps while in store.

*Figures exclude food, gas, and automotive purchases. Duplication is also present due to overlapping factors (i.e., a consumer purchases a product online while in store to later pick up in store.).


Evidence shows that consumers use combinations of physical retail shopping and online shopping, which suggests that physical retailers drove more than the $3.2 trillion in direct purchases seen in 2016.

While the need for physical retailers certainly remains, the type of shops that consumers frequent are changing. Consumers have also identified businesses that offer poor customer service, lacking inventory, and boring, uninteresting shopping experiences as reasons for shopping online vs shopping in person.

Ultimately, to be successful as a physical retailer, it is important above all else to provide excellent products and superior customer service. The addition of imaginative sales approaches and an attractive presentation, coupled with digital purchase options, whether through kiosks, apps, or a website, will encourage profits and growth.

Are you ready to open your retail business and need help finding the perfect location for your shop? Contact the brokers of Palmetto Commercial Real Estate and we will work with you to find the right place for the right price to open your newest retail location.