Diversifying from Brick-and-Mortar to eCommerce

The novel coronavirus has wreaked havoc both on our own physical health as well as business health. Most industries have suffered, but some industries, such as eCommerce, has fared better than most. The numbers have been staggering, to the tune of 210% sales increase, from February to April. More than likely, once a vaccine is developed, most everything we were doing prior to the pandemic will return to the way they were, with some minor adjustments. However, when it comes to retail there will be a huge shift in consumer behavior, more specifically, the way people shop. In the short-term, we believe Revenge Spending will occur once things return to pre-COVID "normal". Long-term, however, we believe growth in eCommerce shopping will increase dramatically due to patterns and habits being developed in our time of self-quarantine.

eCommerce sales in the United States has grown by an average of 16.67% YoY from 2010-2019. While its market share has grown 150% from 6.4% to 16% in that same time period.


The shift we're witnessing isn't just happening in the U.S., it’s worldwide. eCommerce sales represented 14% of the overall $3.5T in retail sales in 2019 and is expected to increase to 22% by 2023. This projection was pre-COVID. We believe that with the recent development in consumer behavior, it will speed up this growth projection timeline and will be about 25-30% by 2023, if not higher, given our "new norm".

One of the more interesting consumer behavior developments that has taken place during the pandemic is that consumers are getting used to purchasing groceries online and picking up at the store or curbside. Internationally, online grocery shopping is more common, approximately 15% in the UK and Korea shop for groceries online compared to just 3% in the U.S., pre-COVID. Some giants are taking notice and putting a plan in place to provide for their customers.

In the U.S., 3 companies have stood out above the rest. In a recent study, approximately 1 out of 3 people have bought groceries online in the past week, and of this group, 41% said it was their first time buying groceries online. Of the first-timers, over 3/4 said they shopped at either Walmart (58%), Amazon (14%), or Kroger (6%). This shift in behavior will not be short-lived. We will see more people start to purchase their groceries online. Walmart and Amazon know this is coming and they are putting an infrastructure in place to take advantage. Walmart now has 3,200 pickup locations and 1,600 delivery from stores nationwide. They also offer subscription-based, Delivery Unlimited, and planning to expand the benefits of the subscription plan in 2020. Amazon is doing something similar with AmazonFresh and Prime Now. Kroger, however, has not been able to keep up with either Walmart or Amazon.

What does this all mean for the average seller not named Walmart, Amazon, Kroger, or not at all in groceries? Well, new habits and skills are being formed by consumers. Online shopping is being forced on them. Stores and brands must take advantage of this. The shift and patterns we are seeing with consumer behavior will continue post-COVID.

Retail sales in general dropped 8.7% in March, this is the biggest drop since the federal government started tracking this metric nearly 30 years ago. A big part is forced-closures of stores, but the inability of some brick-and-mortar (B&M) only stores to jump online has been a big part of crucial shortages of some product categories. Shops that only have a physical location has to move online, not only to generate revenue and stay afloat in the short-term, but for long-term health of its business. Diversification is key in business and having an online presence will bring exposure to all kinds of consumers not just in the U.S., but also in different parts of the world. A game-changer that will help retail brands make the move to eCom is Google's free offering to Google Shopping. For the first time since 2012, Google is allowing retail brands to list their products free of charge. This is a great opportunity for brick-and-mortar only stores to diversify and get in the eCommerce game. For those already selling online, but not yet utilizing Google Shopping, Google is also working with Shopify to make selling on Google seamless. We are not suggesting this will solve issues for all sellers, but Google Shopping could be a lifeline for some brick-and-mortar only stores struggling to stay afloat in the interim, but could very well be a blessing in the long-term due to the diversification it presents.

Making the switch to online from strictly B&M is not easy and could be a struggle without the right help. Many companies just starting out make the mistake of simply listing online, advertising, then wishing their products sell well. They simply muddle their way to mediocrity. Though there is a small percentage, that do well, most do not. Most companies should hire a consultant. Consultants can help with:

1. Analyze your business and gauge how well it will do online

  • Growing an online business is tough. The best consultants will be honest and forthright on what they think your business will be able to accomplish online

2. Develop a custom tactic to help your business perform above an already crowded market

  • Online selling isn’t easy and it is a crowded market, especially Amazon and eBay. Developing custom tactics on operations and marketing is crucial to be successful and growing your online brand

3. Launch your site

  • Creating an account on Amazon and eBay is somewhat simple, but creating your own site/store on platforms like Shopify, Magento, or WooCommerce can be tricky

4. Save time and money

  • Consultants are professionals for a reason. They can help scale up quickly and navigate your way past competitors. Though they cost money you may not want to give up, they can be invaluable in your new venture. Most are flexible with terms and rates so if you just need them for a simple project, deals can be worked out

5. Optimize your business’s online presence

  • Consultants can help you optimize your online presence and help improve your marketing. Good consultants will help you with things like SEO, creating a social media presence, gain quality reviews from customers, analyze your business flow to determine any flaws, daily analysis and review with you

6. Grants you freedom

  • While there are many good consultants out there, the great ones provide full-cycle service. They will manage your entire eCommerce business for you, giving you the freedom to make your product, do more research to expand your portfolio, or help you take a much-deserved vacation to Belize and all you have to do is watch your sales grow on your software’s dashboard


Nobody truly knows what the new norm will be nor what the next 6-12 months will look like, but with available resources such as free Google Shopping and affordable consultants, it is critical for B&M stores to start selling online, now more than ever. Going online doesn't guarantee success, but it does give B&M-only businesses a shot in this quickly ever-changing landscape.

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