Report: COVID-19 has forced brick-and-mortar brands to find their futures on the web
Months after the COVID-19 virus hit and the retail world was floored, Best Buy achieved an 81% sales retention though most of its doors were closed. Its evidence such as this that makes big retail chains close stores and ramp up their e-commerce operations.
Online shopping had been around for a few decades without surpassing 10% of total retail sales. But COVID-19 inspired top retail brands to shift gears, floor their e-com accelerators, and seek out growth on the web instead of the mall floor, according to Coresight Research.
In a new study titled “More Retailers Shift to E-Commerce at the Expense of Stores,” Coresight notes that e-commerce will account for 25% of all nonfood sales this year, a five-point leap up from 2019. Big retail brands, the company predicts, will close more stores than they planned to close before to the epidemic and turn others into fulfillment centers for online orders.
Best Buy is one of those. On its Q2 earnings call, CEO Corie Barry said the company was convinced that consumer preferences have permanently been changed during the pandemic. As a result, Best Buy will outfit a quarter of its stores to handle higher package volumes.
Estée Lauder is a prime example of a retailer doing an about-face with its omnichannel presence, Coresight said. It will close 15% of its 1,600 shops and department-store counters and use the resulting savings of $400 million to improve digital methods for increasing sales among customers new and old.
Both companies currently far exceed the average online sales percentages. Estée Lauder’s e-com tally is 40%; Best Buy’s is 53%.
As for malls, this viral megatrend could serve as a gateway that will, the report said, “further drive the longer-term shift of malls away from being pure retail spaces—adding to the repurposing of retail space for residential, leisure, and business purposes.”