Abigail Schmidtke
Thanks to the development of online shopping, the most basic of economic transactions— the buying and selling of goods—continues to undergo many positive and negative changes that have a profound impact on the way businesses reach their consumers. Online shopping has greatly affected brick and mortar stores in not only their sales but also even down to their employment.
First, we need to look at trends in online retail sales over the past few years. As you can see in the chart below, online sales have grown steadily and strongly, with their place in total retail sales increasing from 2.5% in the mid-90s to around 5% in the mid-2000s, then doubling again to exceed 10% today.
What we should look at next is employment trends for physical store retailers and nonstore retailers. Since total retail employment includes job placements for gas stations, car dealers, and other establishments that are less vulnerable to the e-commerce wave, the focus should be on department store. This category includes employees that are incredibly susceptible to the competition from the online stores. These department stores have also seen greater job losses than other types of retailers in recent years and seem to be among the most vulnerable to the rise of online retail. As the chart below explains, employment at both physical stores and online retailers have fluctuated up and down along with the economy until 2012. But at that point,, there was an intense shift. The two retailers began moving in opposite directions in that year. Department stores ended up firing over 200,000 people on physical jobs jobs, while online retail employment rose by a small fraction of that figure. Since early 2013, department stores have eliminated roughly 80,000 jobs, on average, while nonstore retailers have added roughly 100,000 jobs, and these trends seem to show no sign of stopping.
But why has online shopping become so lucrative and making such a HUGE impact? It is insanely convenient. Rather than taking time out of your busy day to drive on over to your local Target to pick up some socks and using gas to transport yourself to said local Target, you can keep your butt on the couch and order some off Amazon or even off Target’s own website. Although physical stores have a leg up over online retail due to the instant gratification of being able to hold your purchase in your hands the minute you pay for it, online shipping has improved so much that 2 day shipping is becoming very common. Fast online shopping has eroded the attraction of shopping offline, and it is one reason why more and more people are choosing to shop online. Along with speed and convenience, the prices are normally low and the selection is normally wider which adds more competition to the market which benefits the consumer even more!
The shift from brick and mortar stores to online sales doesn’t show any sort of signs of stopping and the economy will be impacted by the subsequent sales. Online shopping boosts the overall US economy by increasing competition, and lowering prices. As E Commerce continues to grow, economic benefits are sure to follow.
Works Cited
Has Online Shopping Made Life Easier?, www.atechnologysociety.co.uk/has-online-shopping-made-life-easier.html.
“Economic & Environmental Benefits of Selling Online.” Miva Blog, 10 May 2019, www.miva.com/blog/economic-environmental-benefits-of-selling-online/.
“How Is Online Shopping Affecting Retail Employment?” Liberty Street Economics, libertystreeteconomics.newyorkfed.org/2017/10/how-is-online-shopping-affecting-retail-employment.html.
“Three Key Advantages of Online Shopping.” Rakuten SL, www.rakutensl.com/post/three-key-advantages-of-online-shopping.
This blog is very interesting in that it shows both the pros and the cons to online shopping, or rather, who it affects and who it does not. I would be interested to know if the decrease in department stores affected the other branches that you mentioned were NOT affected, in a sort of chain of events manner. It would be interesting to find out how the ripples of this event are impacting all the other types of sellers. Overall, very intriguing.
ReplyDeleteI agree with this post. Loom more into retail store and online banking. Retail stores use a sort or stock market method while online banking and shopping use more of a trade and go method. I do agree that economic befits will follow as the flow continues whether it is online or in real life retail.
ReplyDeleteThis post is a very interesting and different one. I wouldn’t expect online shopping to be so involved in the economy. I learned a lot from reading this, like how unemployment rates are growing because of the online shopping. I always thought that there was always a real store related to any online stores because it makes sense, because some people want to go in and try stuff on. I am a huge online shopper and I didn’t realize how much I did it, until after reading this and realizing I don’t know the last time I went to an actual store. I can see how this would affect the income coming into the stores and explain why stores like Kmart and Boston Store have gone out of business. This was very interesting to read and learn about.
ReplyDeleteI personally enjoy shopping by going to the store and finding clothes that way. I think when you online shop it takes the purpose away of actually getting out of the house and go to the store. Also the sizes are not always true to fit online and it makes it very difficult if you want to return something that you got. Not only does online shopping takes away the point but it also creates less jobs like you said. Not to mention how retailers had fired over 200,000 people in person and then online employment started to rise. I do however agree how online shopping is very convenient, because when you don’t feel like going out you can just order what you need online with having the benefit of not needing to waste gas.
ReplyDeleteI also enjoy shopping at the physical store rather than online because of those same reasons. Online shopping can also be very deceiving with how up to date the website is, a lot of the time before I go to the store I check online to see if that store has what I'm looking for but when I go to the store they end up not having it. Online shopping only applies to the newest generations so the firing of so many employees could still hurt companies right now. Not to mention that some companies are only online, where older generations might not even know about them at all. Online shopping will continue be more and more convenient and popular but until that transformation, online shopping now is effecting some negatively more then positively.
DeleteThis post is interesting as it shows the relationship between the separate parties of physical and online. Personally, I think that the reason physical stores are starting to fail is because of the cost and different discounts. Online, we can find many different sites that offer digital coupons and allow the consumer to complete the purchasing process easily. Physically, keeping track of dozens of tiny coupons can become tedious and difficult.
ReplyDeleteI do see how convenient online shopping has become. I also see that there are couch potatoes and fuel savers when it comes to shopping online. Personally, I enjoy the use of digital orders to keep the huge impact on the rise. For example, Amazon is super easy and efficient. As the amazon community continues to grow, economic benefits are sure to grow as well.
ReplyDeleteI agree with what you have written. As society begins to develop more efficient ways to buy stuff the market it tends to shift over to that. Its like in eras past with industrialization, producing more markets because of the boost in manufacturing productiveness. We have to wonder though will the market ever change after everything goes online? Or, will there be something even more efficient and beneficial for the consumers? Its definitely something interesting to think about but time can only tell.
ReplyDeleteI think that your topic is extremely important today and is something that is making a huge impact on the economy. I personally online shop a lot. It is something I like to do when I am bored and it is a fun way to find clothes without doing anything really. The main reason that I find online shopping so great is because it is so convenient, which you mentioned in your article. I don't have to drive all the way out to a store and try clothes on and instead I can just sit on my couch and enjoy online shopping. Something really sad that I found in your article, is how many physical and in-store jobs have been taken away in only the past few years. I find this sad because we are turning into a world that is so focused on technology and not real life experiences and interaction. Face to face interaction is a very important part of life and is can bring us joy and relationships. Eventually, I feel like everything will just be done online and people won't be able to make those strong connections as well. Though online shopping is boosting the US economy, I think that this increase in online shopping and decrease in shopping in-store has more of a negative affect than a positive affect because of the loss of thousands of job positions and the lack of interaction that continues to increase with people today.
ReplyDeleteI was shocked to hear how many jobs online retail provided. The aspects of the affect on job market were interesting to learn about and made me more aware to its impact on the economy. I think part of the reason people are shopping online more is because of the fast pace society we live in. It makes sense that online shopping has started to dominate the market. However, I still think there will be a need for in store retail because some people like to try on clothes before they actually make the purchase.
ReplyDeleteIn my experience, I think online shopping is far more efficient than going to an actual store because your goods get delivered right to your door without having to leave the comfort of your home. The first thing I thought of when reading your post is Black Friday Shopping and the popularity of that has even moved to online access. Now, instead of rushing Thanksgiving dinners and camping outside for the newest TV's. I just click a button on my cellular device and watch as the prizes decrease as more people are buying. Therefore, it doesn't surprise me that the department stores are low in staff due to the excessive online shopping. There are even exclusive items only sold online so there is no need to wait in lines when you can do the same task in your living room. However, I think this makes it much easier to spend more money than you plan to. Although, it is easy to walk around the mall and just swipe a card, you will eventually get tired of carrying the bags of all the stores you had gone to as a reminder of how much money you spent. Online shopping doesn't give you those little reminders because you are just pushing a button.
ReplyDeleteI agree with what this post is saying. Online shopping is becoming more convenient. Black Friday shopping isn't as popular as it used to be, but instead Cyber Monday is becoming what most are truly excited about. People are saying that they just find it easier to sit at home or even work and buy what they need right there. They don't have to take time out of their day to go to the store and rush to what they need/want. Something I haven't really noticed though is less people working in retail or department stores. Yes, department stores have failed to make their business successful but that is not from online shopping. If people are online shopping at these certain stores such as Sears they would still be in business. The jobs that are less available from department stores, I believe are just from them becoming bankrupt. It was very interesting to see what statistics there are about something as simple as online shopping.
ReplyDeleteAs a person who shops a lot online and in stores, this has surprised me since I really didn't know that online shopping has basically taken off shopping in stores. It's a bit sad to think that most stores are going out of business since everyone is buying online instead. The plus with online shopping is that it is at least boosting the overall US economy!
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteAs a person who thoroughly enjoys shopping, especially from the comfort of my own home, it was really surprising to see just how much online retail has affected physical stores. I was aware that a lot of the large department stores are already going business as a result of the increasing popularity of online shopping, but I'd be curious to see how this trend might continue in the future. Will department stores and other in-store retail locations be completed phased out or stabilize? In addition, do you think it's possible for department stores to be able to regain their popularity through new marketing strategies? The same goes for online retail employment--will that continue to increase, as well?
ReplyDeleteI was always aware of the fact that online shopping is going to take over one day, but never did I look at it from an economic standpoint. I totally agree with you and your blog post about how online shopping has become so easy. In your post you are talking about the decrease in jobs because of online shopping, I know you mentioned this in your post and I agree in the aspect that retail store employments are going down and evidence 100% backs you up, however Amazon requires many people to drive the delivery trucks, load them, and even help run the website. So as retail jobs are being lost more jobs are opening as well, maintaining that unemployed balance.
ReplyDeleteI think the reason why online stores are growing so fast as well is because of that last point of how much more variety you get by shopping online. Especially with websites like amazon, you can be looking at 10 times more the number of retailers than you would in a physical store. However, what I really found interesting is the number of new jobs being created by online stores. That is going to further propel online shopping as one of the biggest arguments against online shopping sites was the job losses. By the article, its incredibly clear how online shopping is positively impacting the economy.
ReplyDeleteI always figured that online shopping was on the rise. Although, I never would have thought about it from an economic standpoint. I also feel that the growth and involvement of technology in growing generations has also been a key factor in the growth of online shopping. In your essay you mentioned that online shopping has allowed people to stay at home and not waste gas. However, I feel like there is still a major environmental impact that these companies have. These companies are not including the cost of manufacturing pollution, trash left over from packaging, and constant air pollution that is harming our public and environmental health.
ReplyDeleteI knew that online shopping was becoming more common in these days, especially because it's so convenient, but I never imagined just how many jobs are lost because of it. However, the most interesting part of this article is the number of jobs being created. I never think about the people who run online servers, package products, produce products, and how they are employed BECAUSE of the boost in online sales. I wonder if the future is completely online or will retail stores gain traction with new marketing and products? Also, in a world that's slowly becoming more environmentally concious, will online retailers lose business because of their lack of sustainable packaging? Could they find more sustainable, safe packaging?
ReplyDeleteI also found this blog post quite interesting because it talks about something that the majority of people do monthly, sometimes even weekly. Online shopping is something people do constantly but never really think of the effects that it may have on others. The blog really highlights how something so convenient can impact our community which I thought was intriguing. When I go to shop at places in the mall, I can definitely see a decrease in employees and I didn't really think much of it but after reading this post I understand the probable reasoning behind that. Additionally, I agree that online shopping will continue to increase based on the positive outcome for costumers. There are many shopping sites where they connect to customers only through online shopping which is unfortunate because sometimes it's nice to actually go into a physical store and many times the store can go unnoticed because there isn't a physical store that people can go into. However, I would be interested to see how the increase of online shopping effects online customer service reps that you may talk to when you are having trouble purchasing something.
ReplyDeleteAs others have said, while I have realized the growth in popularity of online shopping, I never truly thought about how this might be effecting our economy. Specifically, I was surprised to hear the statistics on the people out of a job as a result of this. The fact that 200,000 people have been unemployed and 80,000 jobs have been eliminated all together was a consequence of online shopping that I never even thought might result. Unfortunately, this article reminded me of many other similar circumstances. Occupations in maintenance, factory, and even health-related fields are becoming more and more commonly replaced by advanced technology. While the advancements in technology will most likely continue to eliminate some of the jobs currently available in our society, my hope would be that people will also continue to realize the advantages of services and products provided by physical, attainable people and places.
ReplyDeleteI personally prefer to shop at a physical location just because of sizing can be different with different brands. It is too much work to order something and not having it fit so you have you have to send it back then again wait for the right size to be delivered to you when you can just walk out of a store with the item in hand. But on the other hand online is very convenient when you don’t have much time to go to a physical location. This will benefit the consumer by saving gas and time but shopping online can sometimes be risky and irritating.
ReplyDeleteI personally will miss my late night Meijer runs with my mom one day. That being said, I wonder if this is eventually going to work like some massive merger. Amazon buying out common grocery stores and absorbing some of their employees to work for them and maintain relationships. It sounds almost fantasy, but it makes sense that companies as lucrative as Walmart and Target could be bought out by online companies. Those two already have quite the online presence with their websites, even allowing certain orders to be placed for delivery. Would these stores be more resistant to a buy-out, or would they act like another pawn to grow Amazon and others even more?
ReplyDeleteI personally always like to shop in store to try clothes on, however I have so many friends who prefer online shopping as it's much more convenient to them (and easy to do during class haha). I am definitely not surprised that having online shopping boosts the economy, because as I said, it is much more convenient for many people. Not to mention it's far less time consuming, and is much easier and holds less commitment. However what I have not thought about before is the loss of jobs due to online shopping. 80,000 jobs eliminated is a huge deal and can also greatly effect the economy with unemployment rates. I guess that's just the opportunity cost though, there has to be a give and take in every decision, and people would rather have online shopping than more jobs.
ReplyDeleteAs you stated in the paper, the e-commerce industry helps the economy because it creates more competition and lower prices. But it also can help the environment because it eliminates some paper usage because the businesses don’t have to pay for magazines and articles trying to get you to buy the products. While the online shopping industry has caused some people to lose their jobs, it also has created jobs because when the websites crash, there needs to be people to help bring the website back up. So, there are both pros and cons to online shopping and how it impacts the economy. However, I think the online shopping industry has helped the economy more than it has hurt it.
ReplyDeleteI agree with the statements made in this post. Online shopping is growing and will continue to grow. The data shows that it is advantageous for companies to have a larger online presence. However, while I am convinced that convenience plays a large role in the growth of online shopping, I believe that price and features are huge factors as well. In a store you are unable to instantly compare prices from multiple different stores at the same time, you can online. In a store you cannot look at thousands of customer reviews. Also, while you mention that online stores will have a positive economic impact, you do not explain why that is.
ReplyDeleteThis topic is very relevant to today's way of transactions. With online shopping becoming more and more prevalent, it's obvious that there would be some changes within retail jobs and more. Many points--both positive and negative--were made and are absolutely true. Personally, I would prefer going to the store because the item/s are easily accessible already and I don't don't have to wait for shipping. However, it is true that the selection on online shopping platforms are vast and show more items that aren't in the store. With this in mind, online shopping will probably become used more often by the majority of people.
ReplyDeletePlease continue this great work and I forward to more of your awesome blog posts.
ReplyDeleteonline shopping is hectic now a days, its all about the trust on website from you are ordering your product. On other hand there is another problem for the online seller that their delivery process is unmanageable. There are some companies which control their delivery process so that they can focus more on sales and their business.ecommerce shop