ABI Research Forecasts E-commerce Share of Total Retail Sales to Reach 25% by 2025

Smart Retail has gone through revolutionary changes in the past 10 years and will exponentially continue to do so going forward.  Brick and mortar stores are no longer the only option for consumers across the globe to make their everyday purchases, due to significant advancements in technology, both in-store and online.  Key players include Senion, who implements some of the world’s largest Indoor Positioning System (IPS) solutions to enhance in-store experiences, and AisleLabs who provides shopper traffic behavior analytics to help retailers optimize store layouts.  Leading POS software vendors, Shopkeep and Square are allowing retailers to sell across multi-channels from a single platform. These and other key vendors are paving paths to making the offline and online worlds seamless experiences.

In-store technology needs to be widely implemented for those retailers who want to compete and succeed in the rapidly-growing mobile-shopping lifestyle.  Key technologies driving successful retailers include visual interactive displays that provide shoppers real-time product information and abilities to buy in-store or online.  Digital shelf monitoring is also allowing stores to streamline inventory auditing and ordering practices to provide more time spent with customers.  These types of technologies are what differentiate the online shopping experience where there is less human interaction and entertainment.

Various barriers will continue to exist in the online and offline worlds.  As last-mile delivery capabilities increase, there will be further encouragement to make purchases online, but as in-store experiences become more entertaining, experiential, and value-added, certain retailers who adopt these practices will thrive.  E-tailers who are opening brick and mortar stores understand the need to have both so that customers have both shopping options, if the two are seamless.  If one chooses to buy online, but wants to return a product that day, having a store nearby will ensure they stay within the retail brand and not shop elsewhere.  Examples of retailers who demonstrate these capacities include Warby Parker who started as an e-tailer and now has 61 physical stores to accommodate its customers.  Amazon, the largest online marketplace in the U.S. also knows connecting back to brick and mortar is vital.  They recently partnered with department store, Kohl’s to provide free Amazon drop off and shipping to capture the physical store shopper and to continue having them buy on their platform.

“ABI Research predicts that E-commerce will continue to take share from physical stores and occupy a market share of over 25% of total retail sales,” says Andy Sweis, Principal Analyst at ABI Research. “As various technologies allow for seamless shopping between physical stores to online, this will encourage purchases from both channels, rather than choosing one of the two.  Global retail revenues will continue to grow single digits between now and 2025, but E-commerce growth rates will continue in the teens and eventually in the 20%+ rates.  Regions such as Southeast Asia will have rapid growth in internet access and mobile device accessibility, encouraging E-Commerce purchases and accelerating growth rates.”   

These findings are from ABI Research’s Smart Retail – Technologies report. This report is part of the company’s Smart Retail research service, which includes research, data, and analyst insights.