Why Online Retail Will Continue to Attract Investments

Online retail on a smartphone

The convenience of buying almost anything from online stores will mainly drive a continuous flow of investments in e-commerce in the next five years, mainly driven by the millennial population.

For example, brick-and-mortar stores in the U.S. have struggled since the prevalence of digital shopping among consumers. Share prices of real estate investment trusts such as Regency Centers and Kimco Realty further validate this, as their stocks have plummeted between 20% and 40% over the last year.

Safe Niches

While it is true that physical stores have recently suffered business losses, e-commerce will not displace all traditional retail shops anytime soon. Luxury malls, for instance, are expected to buck a downward trend. The reason behind this involves consumers that still choose to visit a store in person to buy designers bags or jewelry.

Other than that, most shoppers will likely choose to transact with online retailers. The experts at PriceManager explain that this trend emphasizes the need for e-commerce firms to implement competitive strategies, including a map pricing policy.

Cheaper Prices

As competition becomes tighter among online retailers, the importance of tracking your competitors’ prices becomes greater than ever. Physical retail chains are adapting to this trend as well. Costco Wholesale Corp. serves as an example. A study showed that prices on the retail giant’s website are 17% lower than listed prices on Amazon.com.

BMO Capital Markets based its analysis on 54 products found on Costco in-club, Costco online and Amazon. Still, Costco will need to use other pricing strategies even if has enough resources to compete with Amazon, as due to the former’s relatively weak e-commerce presence for now.

Conclusion

Online businesses need to stay competitive with the booming e-commerce industry, despite the growth forecast. Consumers may continue to patronize online shopping, yet this will not matter if they always seek the products or services of your competitors.