Online stores – are they replacing retail stores?

Many consumers assume that eCommerce will replace stationary trade. But is choosing a distribution channel always an either/or decision?

Does creating a domain inevitably result in the closing of a retail store? And what part do Amazon and eBay play in the multichannel strategy pursued by online stores today?

 

 

Among the world’s leading online stores, the distribution of roles is quite clear. Be it in Germany, the U.S. or the U.K. –  stationary trade is the most common complement to online sales and thereby overshadows other traditional channels such as mail or phone ordering. This partly rebuts the assumption that eCommerce is the final nail in the coffin of the traditional shopping experience. The challenge rather seems to lie in connecting on- and offline business in order to provide customers with the best possible shopping experience.

 

 

However, traditional sales channels are not the only challenge to be met. Within the last few years, something else has led to a change of strategies on the part of online store operators: marketplaces. Amazon and eBay are two of the companies offering this means of buying and selling products. However, the 10 online stores with the highest turnover in Germany, the U.S., and the UK respectively only take little advantage of the greater reach provided by Amazon. One reason for this might be the comparability of their business models because at first glance, domains like amazon.com or amazon.de look like online stores themselves. In view of decreasing reach, which is partly reflected in declining revenue, the importance of this additional sales channel is increasing across all countries. Among the top 500 stores in Germany 40% have their own profile. The share in the U.S. amounts to 31%, whereas in the UK, a quarter of stores place their trust in the reach of the American multi-billion company. In contrast to this, eBay seems to be a particularly attractive sales channel for online stores with the highest turnover, possibly because it has a different business model than traditional online stores.

 

 

40% of the German top 10 online stores can be found on the former C2C portal. Shares in the U.S. and the UK online stores, meanwhile, amount to 20%. Except for one outlier, the category of the UK top 100, the percentage of online stores owning an eBay account decreases with falling revenue.

 

 

 

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April 2019