Why eCommerce is the future. And retail is not.

Retail as we knew it is dead. That does not mean physical shops will disappear. It means that pure bricks-and-mortar retail without digital integration can no longer survive economically. eCommerce has not just added to retail.

It has fundamentally shifted the balance of power between retailers and consumers. According to Statista, global eCommerce volume in 2024 was around 6.3 trillion US dollars. For 2027, the forecast is more than 7.9 trillion.

In Germany alone, online sales reached 91 billion euros in 2023, with steady growth that has outpaced high-street retail for years. In this article we look at the data behind the channel shift, the economics of BOPIS and showrooming, and why the last mile matters so much.

The numbers behind the channel shift

Online’s share of total retail has tripled over the last ten years. In Germany it was around 7 % in 2014 and had reached 16 % by 2023. In China the online share is over 50 %, in the UK 30 %. This is not a temporary pandemic effect. It is structural.

The drivers differ:

• Range: An online shop can list hundreds of thousands of SKUs without paying for floor space. A high-street retailer is limited by its sales floor.
• Price transparency: 85 % of consumers compare prices online before they buy, whether they end up buying online or in store. A shop that does not match prices loses out at every turn.
• Availability: An online shop is open 24 hours a day. A physical store is tied to opening hours, staff costs and location.
• Data: Online retailers have detailed customer profiles, purchase histories and behavioural data. Physical retailers without digital tills or loyalty apps are working in the dark.

The result is polarisation: growth happens either online or in hybrid models where digital is the leading channel. Pure physical retail without an online presence keeps shrinking. In the US, more than 50,000 stores closed between 2017 and 2023. In Germany, fashion retail has lost 2 to 4 % of its real sales floor space every year since 2020.

These figures show that even in Germany, a market traditionally dominated by physical retail, the online share keeps growing. The idea that it has reached saturation is a myth. As long as the online share is below 50 %, there is structural room for growth, and it comes at the expense of physical retail.

The fixed-cost trap of physical retail

Physical retail carries a structural cost burden that does not exist online. Rents on the main shopping streets of large German cities run from 150 to 400 euros per square metre per month.

On top of that come staff costs, which in Germany are among the highest in Europe because of the minimum wage and social security contributions, plus energy, cleaning and maintenance. These fixed costs are due whatever happens to sales, and in a crisis that becomes a threat to survival.

eCommerce, by contrast, scales with demand. Server capacity can be increased within minutes. Fulfilment centres can be adjusted by season. Marketing budgets can be moved around daily. An online shop having a bad month cuts its ad spend and lowers its variable costs. A physical store having a bad month still pays the rent.

This economic imbalance leads to natural selection. Small and mid-sized retailers without digital income cannot absorb fixed-cost shocks such as rising energy prices or rent increases. The result is concentration among large, well-funded players and digital D2C brands that use physical stores as a secondary channel.

Showrooming and webrooming: how customers behave now

Customers increasingly use physical stores as showrooms. According to Google, 82 % of smartphone users check their phone while in a store. They compare prices, read reviews and look at alternatives. This behaviour, known as showrooming, threatens retailers that offer no price match and no connected inventory.

The flip side is webrooming: customers research online but buy in store. According to an Ipsos study, 78 % of buyers use the internet to prepare a purchase in a physical store. What separates successful retailers from failing ones is whether they support this journey across channels or run each channel in isolation.

An example: a customer looks at a sofa online, checks the dimensions and reads reviews. Then they visit the store to try how it sits.

If the store cannot check in real time whether the model is cheaper online or available in that branch, it loses the customer. If it has a connected inventory, matches the online price and offers Click & Collect, it wins the customer, and often an extra sale too.

BOPIS: the bridge between both worlds

Buy Online, Pick Up In Store (BOPIS) is the fastest-growing fulfilment model in retail. According to Forrester, 70 % of customers who place an online order for collection in store buy additional items when they pick it up. The average extra spend is 15 to 25 euros per collection.

The economics are compelling:

• Lower costs: The last mile, delivery to the front door, disappears. That cuts shipping costs by 30 to 50 %.
• Better use of floor space: The store becomes a mini warehouse. Storage costs fall because existing space does double duty.
• Customer contact: Collection is a personal touchpoint. Well-trained staff can cross-sell and promote loyalty programmes.

Implementation, however, needs a connected inventory and order management system. If a customer orders a product online that is not physically in the store, trust suffers. According to McKinsey, an OMS (order management system) pays for itself within 12 to 18 months through lower returns and shipping costs.

The last mile: where eCommerce wins or loses

The last mile, the route from the regional hub to the customer, accounts for 50 % of total shipping costs. It is the most expensive and least efficient part of the supply chain.

It is also the deciding factor for customer satisfaction. According to a Capgemini study, 84 % of customers will not buy from the same retailer again after a bad delivery experience.

eCommerce retailers have a structural advantage here: they can choose logistics partners flexibly, set up regional micro depots and offer same-day delivery. Amazon set the standard with Prime: delivery within 24 to 48 hours is no longer a premium service but a basic expectation. According to Statista, 41 % of German online shoppers expect delivery within 24 hours at most.

Physical retailers without their own logistics are at a disadvantage. They depend on third parties or have to buy expensive express services. A pure retailer that does not invest in logistics loses the race for the last mile, and with it the customer.

Same-day delivery and quick commerce: the next escalation

Customer expectations keep speeding up. Next-day delivery is long established, and the same-day segment is growing fast. According to a McKinsey study, 25 % of German online shoppers expect same-day delivery if they order before 2 pm. Quick-commerce providers such as Flink, Gorillas and Getir, although struggling financially themselves, have anchored this expectation for the long term.

For physical retail this is a threat and an opportunity at once. The threat: customers with an immediate need will not drive to a store if they can have the goods delivered within two hours.

The opportunity: branches can act as regional micro depots. A retailer with 20 branches in one city has 20 warehouses that can serve same-day delivery, provided the inventory is connected and logistics are managed digitally.

The investment in such infrastructure is high, but not prohibitive. According to an analysis by OC&C Strategy Consultants, regional fulfilment models pay for themselves within 24 months once online sales exceed 20 %. Retailers below that threshold can use logistics partners such as DHL Same Day or Lieferando without building their own fleets.

Omnichannel: the only way to survive

The future does not belong to pure eCommerce, and certainly not to pure physical retail. It belongs to the omnichannel retailer that treats online and offline as one. According to a Harvard Business Review study, omnichannel customers spend on average 4 % more online and 13 % more in stores than customers who use only one channel.

Successful omnichannel strategies include:

• Connected inventory: Branch stock visible online in real time.
• Consistent prices: No channel discrimination that encourages showrooming.
• Click & Collect: A smooth handover from online order to in-store pickup.
• Single customer profiles: A customer who buys online should be recognised as such in store, and the other way round.
• Flexible returns: Items bought online can be returned in store. That cuts return costs by 20 % and ties the customer to the physical location.

Retailers who refuse this integration operate with a structural weakness. They have higher fixed costs, less scalability and less customer data than their digital competitors. Market share will keep shifting, not because online is cheaper, but because it is more efficient, richer in data and more focused on the customer.

Conclusion

eCommerce is the future because it has shifted power towards the customer. Price transparency, availability, range and data-driven personalisation are here to stay. Pure physical retail without digital integration will be pushed further to the margins over the next five years.

The survivors will be those who see their physical presence as part of an omnichannel ecosystem: not as an alternative to online retail, but as a complement. If you do not invest today in connected inventory, BOPIS and a seamless customer experience, you will not be part of the future of retail.