Are any retailers safe from Ecommerce?
The short answer is yes: at least for now. Despite the overwhelming progress made by online retailers, some sectors remain largely offline propositions. This includes a number of operators in the luxury world, which is still fighting perceptions that online availability damages brand exclusivity, and a few other areas – home improvements, food shopping, and shoes. What is becoming more and more obvious, however, is that these sectors are outliers: most retail is moving online with incredible speed, and it’s likely these slow-adopters will one day follow the pack.
One way to understand the shift towards Ecommerce is to look at the change in employment numbers over the last decade. In the graphic above (which only deals with U.S. data), it is clear that more people are working in online retail than ever before, while staff in traditional brick-and-mortar shopping environments have declined. This trend still has a huge area in which to grow: despite the uptick in online retailers, total employment in the sector remains measurable in the hundreds of thousands – offline retail employs many, many, millions of people.
The picture that this data paints has two obvious takeaways: the first is that it demonstrates which retailers are at the most immediate threat from Ecommerce disruption. Department stores, for example, have lost 295,000 jobs in the U.S. over the past 13 years. The second is that it demonstrates the extent of online retail’s dominance in the market, and indicates that it still has significant room for further growth.
Dominion holds a number of online retailers across its Global Trends Range of Funds.
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