Retailers slow to adopt online shopping risk becoming obsolete
If you were to gather 10, 20, or even 50 people into a room and ask those who have ever shopped online to raise their hand, it wouldn't be surprising if everyone lifted an arm. Certainly the majority of hands would go up in most cases. Even so, it's still relatively early in the e-commerce game -- according to a new report by a Kantar Worldpanel, online sales of fast-moving consumer goods (FMCG) will reach $53 billion by 2016.
That represents a hefty jump of $17 billion (or 47 percent) on the current $36 billion being spent online, the firm says. Kantar came to its conclusion after an in-depth analysis of the purchasing habits of 100,000 shoppers in ten of the biggest FMCG markets.
Kantar believes Asia will be the next major growth market, noting that South Korea will continue to lead the way. At present, 55 percent of shoppers in Korea buy online, a figure that's not matched by any other country in the world.
"Although online only makes up a small share of FMCG sales at the moment, all countries are witnessing considerable growth. The future belongs to retailers and brands that see the bigger picture and leverage the opportunities provided to broaden their target markets. Being a slow adopter has the potential to significantly damage sales and erode market share," said Stéphanie Roger, Global Shopper and Retail Director at Kantar Worldpanel.
Kantar's report suggests that barriers preventing retailers and brands from making a bigger push to online channels are mostly perceived rather than based on how consumer actually behave. One of the biggest perceived barriers is that having an online presence will cannibalize in-store sales and lead to less brand loyalty. Kantar's research shows the opposite is true for both cases.