There’s nothing quite like the adrenaline rush of a shopping spree.
But for many of us, that no longer means walking around shopping malls.
It means shopping online.
That’s one reason why experts are saying we’re in the beginning stages of a retail apocalypse.
But are we?
You’ve probably heard about the challenges brick and mortar stores are facing
like Toys R Us, which is closing about 900 of its stores in the U.S. and U.K.
And there’s American retail icon Sears.
It pioneered ordering by catalogue and was seen as the Amazon of its time.
Sears had survived for 132 years before it filed for bankruptcy in 2018, closing more than 100 stores.
It’s not just a few big retailers.
In just three years we’ve seen a wave of retailers go bankrupt.
And in 2017, retail store closures in the United States hit a record high.
But it’s not just the United States.
Some places like Hong Kong, Singapore and Britain have also been hit by slow retail sales.
Almost 6,000 stores closed in Britain last year - that’s 16 stores a day.
Those figures may sound like doomsday for retailers, but don’t write them off yet.
There’s a silver lining - people love online shopping.
This year, Cyber Monday became the largest online shopping day in U.S history,
with online sales reaching $7.9 billion in one day, while shoppers spent $6.2 billion on Black Friday.
Still, those figures were eclipsed by those of a one-day shopping event in China.
Alibaba’s Singles Day, which falls on November 11, is China’s biggest shopping event.
This year, it made a staggering $30.8 billion in 24 hours.
China is the largest e-commerce market in the world.
The U.S. comes in at number two and the rest of the world makes up about a third of global online sales.
But how large is the e-commerce market exactly?
Well, for all of 2017, American consumers spent a whopping $453 billion online.
That sounds like a lot, but Chinese consumers spent more than twice of that, totalling more than $1 trillion.
The spectacular e-commerce figures are the reason why many think physical retail is dying out.
But let’s take a closer look at the story behind the numbers.
Online retail sales have been growing as a proportion of total sales in China, as well as in the United States.
Globally, there’s a huge appetite for shopping with the click of your mouse.
Online sales in Europe are growing 10 times faster than brick and mortar retail,
while Southeast Asia’s e-commerce growth is skyrocketing, doubling from 2017 to 2018.
But here’s cause for pause.
The explosive growth of online sales is moderating in China, while it’s keeping steady in the United States.
So we may hear about big household names closing a large number of stores,
but overall, retail sales in the United States and China continue to grow steadily.
Here’s another interesting trend.
Online retailers are going from clicks to bricks.
Amazon, for instance, has opened about 20 bookstores,
at least six Amazon Go convenience stores, as well as its 4-star store.
You guessed it - it’s a store that only stocks products rated four stars and above on the Amazon website.
Alibaba is China’s answer to Amazon, and it owns Taobao, China’s largest shopping website.
I’m here at Alibaba’s first Taobao store in Singapore.
Taobao is known for its enormous catalog, selling pretty much anything you could possibly imagine.
But its store in Singapore carries only a selection of some of its coolest items.
Would you like a chicken wing pillow?
Well you can’t quite bring it home, but you can scan the QR code and order it online.
At least you know exactly what you’re getting.
Alibaba is keen on integrating online and offline retail.
To drive up hype for Singles Day, it got 200,000 stores across China to participate.
Shoppers could try on make-up testing mirrors and get freebies through their mobile phones.
Its biggest bet on physical at the moment?
That would be its Hema supermarkets, of which there are about 60 in China.
Shoppers can go to Hema to get seafood served by robots,
or they can order at Hema online and get groceries delivered in 30 minutes.
Online retailers seem to be absolutely pummelling the competition.
So why are Alibaba and Amazon bothering to open physical stores?
First of all, while sales from their brick and mortar stores may not quite be as mind-boggling as their online
figures, there is evidence that shoppers who buy in-store end up purchasing more from their online stores.
And here’s what’s even more valuable - the data.
Opening physical stores provides tech giants with even more data about shopping behavior, likely
helping Alibaba and Amazon get even better at making irresistible offers to both online and offline shoppers.
Mall operators and more traditional retailers also want to get in on the action.
Asian real estate company Capitaland brought in Taobao for its mall in Singapore,
and it will also open the country’s first online-and-offline mall,
which will include robots, automation and facial recognition technology.
Despite their love for online shopping, many customers still want to try on products in store.
More importantly, they want to buy.
So it’s up to retailers if they want to bring on the retail revolution, or face the apocalypse.
Hi everyone, it’s Xin En!
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