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Which stores will e-commerce hit the hardest?

An extreme close-up of a keyboard, focused on the shift key which now says “add to cart” and has a red icon of a shopping cart. ***note to the reviewer: The  icon is my 100% original vector.

Which stores will e-commerce hit the hardest?

Research by UBS shows that online purchases in the US will grow to around 20 per cent of all purchases by 2022. This upward trend should also occur in Australia. But the pain won’t be equally felt by all brick & mortar stores. Some might be hit particularly hard.

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Roger is the Founder and Chief Investment Officer of Montgomery Investment Management. Roger brings more than two decades of investment and financial market experience, knowledge and relationships to bear in his role as Chief Investment Officer. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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6 Comments

  1. Hello roger Our great e-commerce drivers seem to be lapped up by our tech savvy younger generation. Our tech savvy generation seem to be oblivious or couldn”t care less at the disappearing bricks and mortar (many family owned) stores and relevant employment losses!
    Am i missing the point!

  2. One of the key drivers of ecommerce is the supporting logistics of delivery. Adoption of ecom will continue at a growing rate as that infrastructure improves, to the point of inflection where it is not just cheaper but also faster and easier than buying in a bricks and mortar store. Australia faces the tyranny of distance and limited population density to support some of these logistics but Amazon will find a way. 1 hour to same day delivery is becoming the norm in the UK and US. Order something with 1 click from the couch on Saturday night and it can arrive before you wake up on Sunday.

  3. I have to admit that with the exception of grocery purchases, nearly all my purchases were online. A lot of my purchases were for goods that even a bricks-and-mortar store could not offer. I could use research tools such as google and even ‘ebay’ (yes ‘ebay’) as a research tool. For example I needed spare parts for my laptop. There is no way that I could travel in my car and locally find spare parts for a specific late model.

    When using online research tools, I could research hifi components and then find which places offered the particular component at a particular price including delivery. I applied this technique when searching for a multifunction printer of a particular brand and particular model and delivery fee. The same technique when searching for printer inks. This is something you cannot do when visiting a bricks-and-mortar store especially in a shopping mall.

    Speaking of shopping malls, that has been discussed earlier on the rogermontgomery.com site. Suffice to say, the factors affecting the life of a business in a shopping mall are: (a) the nature of the anchor tenants – can they be everything to everyone like the old days of Grace Brothers/Myer (b) the lack or absence of service in anchor tenants and/or training of staff for service in anchor tenants and finally (c) the shopping mall landlord not providing space for concerts, fashion parades and resulting in not attracting customers (as is happening in the US), like the ‘old days’ when shopping malls had open spaces.

    Anthony P of Belfield

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