Happy Holidays (and Shopping)
By Tyler Kiser
As November has just began, it has officially kicked off the official holiday shopping season in the United States. Companies are already preparing for Thanksgiving and Christmas by setting up their very own decorations and receiving large bulks of stock in preparation for the large boost in demand for various products. Although the companies may believe they can prepare for the holidays just by insuring they have a large supply of the most popular in-store products they are completely mistaken. These stores and retailers are missing the largest area of projected sales for the 2016 holiday season: e-commerce. Now some of you may ask, “What is e-commerce?”, well it is quite simple. E-commerce is the term which refers to any type of business transaction made on the internet, or basically people purchasing products on store websites. Despite the rise in electronic transactions, I still believe in the traditional shopping methods, but living in this day and age the advancement in technology will continue to lead the charge in the increase of e-commerce throughout the current and future holiday seasons.
For the past six years now, since 2010, the sales made online has shot up dramatically. 2010 was the largest increase in sales during the holiday season, 19.4%, because this was the year new, advanced technology made a big push into everyday lives. Since the first large spike increases in the e-commerce sales from November to December have still shown double digit annual growth. This year is projected to have an increase of 17.2% of e-commerce sales, although it is lower than 2010 it is still an extremely large increase. Another key factor in the rise of the electronic sales is due to the fact that the large population of working adults in america have become busier and busier. Not having lots of free time brings people to shop virtually from their home or time most convenient because it has the smallest opportunity cost. Not having to waste time travelling to the stores entices people to just quickly pull up their phone, make a purchase, then go back to their busy schedules rather than needing to drive to the store. Less time spent on shopping, especially during some of the busiest times of year, is very attractive to the average working class. Another positive of e-commerce shopping is it allows the customers to flip through endless pages of store websites allowing them to see all possible substitutes for a product they are considering buying as well as compare the marginal benefit per dollar for one product to another. Being able to quickly determine which brand and which product will benefit them the most for the amount paid is another great attribute to the e-commerce style of shopping. On the other hand the retail sales, in-store sales, have steadily been declining. From 2010 to the projected sales of 2016 sales, they have decreased from a 7.3% increase to a 3.3% increase in retail sales. Again this correlates with the lower opportunity cost of shopping online and not being able to compare hundreds of products at a time.
Ultimately there are number of factors and benefits leading to the rise of the e-commerce industry, specifically during the holiday season. Even though the new e-commerce shopping was inevitable due to the changes in technology and the economy, people will still always enjoy the common experience of shopping in real life. Being able to touch and feel items before spending their income on it will still always cause the need and demand for products sold in person. Overall this holiday season will lead to yet another spike in e-commerce sales but no matter how high, the conventional person will still enjoy shopping in the actual store.
Works Cited
Babb, Lisa. “2016 Holiday Sales to Top Last Year’s.” Kiplinger, Kiplinger Inc., 14 Oct. 2016,
http://www.kiplinger.com/article/business/T019-C000-S010-retail-sales-consumer-spending-forecast.html
As an employee of Walmart, I find that the reason most customers choose to shop in a retail store instead of shopping online is because of the immediacy of the product they buy. For example, the main drawback of purchasing an item on Amazon is the excruciating period of time between when one pays for their product and when one receives that product. To counteract this, Amazon is pioneering a sort of drone program where futuristic robots deliver packages in record time. This might seem scary to some, but I believe that in highly populated areas this system of delivery will become the norm within the next few decade, thereby almost entirely eliminating a drawback of Amazon and enthusiastically building on the strengths that online shopping possesses, as you talked about. When this happens, I think traditional retail shopping will finally receive its death blow and begin to fade away so fast it might as well be Blockbuster.
ReplyDeleteI think that part of the reason that people shy away from online shopping is trust. If a person is ordering online, they have to trust that their package will be handled correctly by the store they are buying from and the deliverers. Also, they must rely on the product showing up on their doorstep on time. This has created sort of an oligopoly in the online shopping world because there are few "big box" companies that people trust to go with. While there are few official barriers of entry into the online shopping industry, one massive barrier is trust, which is something many smaller online shopping outlets struggle with.
ReplyDeleteReading this I realized that shopping online is actually becoming a lot more popular than I expected. While all the benefit of online shopping adds up and probably outweighs the pro's of going to the store, I would still choose to go to the store and try clothes on before I purchase them. I've bought stuff from online websites before, and when I got them, they either didn't fit, or wasn't what I expected it to be. Another con about online shopping is if you want to return an item, you have to mail it back and wait for your money back if they have a return policy. Overall, I still prefer to go to the store and try on things or see them in person before I buy them.
ReplyDeleteOnline shopping definitely has its benefits as well as its challenges. Many times the items you buy end up not being what you thought they would be, depends on how dependable the company is. But i do agree with you on the advantage of being able to compare hundreds of items instantly. Also shopping online is sometimes cheaper because they don't have to pay for the extra expenses of labor and having a physical store to sell there products out of. With all of the online stores and apps popping up i'm sure the percent of people shopping online will increase especially over this next holiday season. However physical shopping still has its benefits as well. Being able to try on clothes for the right fit, as well as having employees there to assist you if you are unsure of what to get. A Lot of people are also afraid of online shopping, because cards numbers are often stolen online as well as there being shipping problems.
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