We’ve provided merchant accounts for online businesses since the dawn of online shopping, so we’re always interested at how retail is faring against e-commerce. The demand for internet merchant accounts remains consistently high based on the number of leads we generate. It is no secret that consumers are still increasingly shopping online while the retail sector has had to adjust its model to (attempt to) remain relevant with online shopping.
E-Commerce transactions happened at six times the pace of brick and mortar transactions in the holiday season of 2017, says a study by First Data. Cyber Monday sales reached a new high again, more than $6.5 billion in the U.S.
Brick and mortars will never go away, but retail merchants need to continue to be creative and relevant. So what can we expect to see from them in the coming years?
Brick and mortars using sub-merchants
This is a trend that is growing increasingly popular: An online merchant, such as Etsy, hosting sub-merchants (those who use the Etsy platform to sell products), an ingenious model. We’ve already seen the physical models with Uber or Lyft as the merchant, and its drivers as sub-merchants. We believe many more retail service businesses will create and follow this model.
Major retailers will sub-lease space
Can a superstore like Walmart get any bigger? It just might. In the not-so-distant future, we can see superstores such as Walmart or Target (perhaps even Amazon?) begin housing smaller name-brand boutique stores, perhaps an apparel brand such as Nike or New Balance; or a home goods store like Pier 21 Imports or Stonewall Kitchen. As the shopping mall model has been on the decline for years, this concept could post an additional hurdle.
E-commerce giants scooping up retailers
Think about Amazon’s purchase of Whole Foods last summer. We think Amazon was sending a message: That the survival and coexistence of retail and e-commerce is extremely valuable (which plays well into our next point).
Retail shopping will always survive
We recently saw the results of a survey conducted by CBRE on how millennials prefer to shop. An overwhelming 70 percent of the 13,000 surveyed in 12 countries indicated they prefer the in-store experience. Another study from Accenture found that 77 percent of generation Z (post millennial) consumers prefer the retail experience.
Having provided merchant accounts for online businesses since 2001, obviously we’re huge fans of online shopping. But based on what we’ve read, we feel that retail shopping will never go away, simply because consumers enjoy the in-store experience, and everything that goes with it.
- Personal customer service
- Interaction with peers and merchants
- Browsing and seeing actual products and goods
And for whatever it is worth, consumers – especially here in our home office in Portsmouth, N.H., USA – have embraced and emphasized the importance of shopping local and helping keep local businesses alive and functioning. We see and hear of these kinds of movements in many cities and towns.
Not only merchant accounts for online businesses – retail too
Instabill has long been known as a provider of merchant accounts for online businesses and MOTO businesses, but we proudly serve the retail sector as well. We are partnered with domestic and international banks who provide cutting edge point-of-sale devices that are EMV ready.
For retailers who wish to launch an online presence, Instabill has your solution. Discuss the possibilities at 1-800-500-2444 with one of our merchant account experts today.