How Online Shopping Will Shape the Future of Retail

April 9, 2013

In a recent report by Forrester Research, U.S. online retail sales are projected to reach $262 billion this year. The staggering number may be good news for online-only stores, but some industry insiders think the figures may prove ominous for those in the business of building and investing in retail sites.

Others disagree and see the silver—or sheetrock-colored—lining. “People make big statements about online shopping wiping out physical retail, but in my opinion it’s like the movies of the future where there was only one car on the road. That didn’t happen and neither will this,” says Michael Ellis, a partner at the Hollywood, Calif. design studio, 5+ design.

In fact, the huge online shopping projection could mean exciting things ahead for developers and investors of retail real estate. As architects and builders are forced to “up their game,” Ellis says, consumers will notice a profound effect on the bricks-and-mortar environment of physical stores.

“The kind of character and design a retail store has will become much more important,” he says.

Ellis doesn’t buy into the notion that online sales will completely destroy the physical retail industry. Rather, he says online shopping augments the experience of being in a store. “The Internet has allowed stores to project their identity a lot more easily than they have in the past,” he says.

Ellis cites Apple, Inc. as an example of a brand that capitalizes on this symbiotic relationship. “Apple spends a tremendous amount of time and energy creating a specific retail environment and that goes hand-in-hand with a strong Internet presence,” he says.

This relationship is further highlighted by technological integration—such as smartphone apps to direct consumers to particular products—that make being in a store or browsing online similar events in a consumer’s mind.

“Stores won’t go away because people like differentiation and variety,” Ellis says. “I don’t think that’s ever going to change.”

By Melissa Kandel, REALTOR® Magazine

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