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E-Commerce Challenges Traditional Stores

E-Commerce Challenges Traditional Storesi
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December 17, 2012 3:45 PM
U.S. shoppers are spending more than ever on e-commerce, a trend experts say is likely to spread to other nations. Online sales are now as much as one-tenth of U.S. retail sales, prompting traditional “bricks and mortar” stores to seek new ways to hang on to their customers. VOA’s Jim Randle spoke with experts, merchants -- and an avid shopper for this report.
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U.S. shoppers are spending more than ever on e-commerce, a trend experts say is likely to spread to other nations.  Online sales are now as much as one-tenth of U.S. retail sales, prompting traditional “bricks and mortar” stores to seek new ways to hang on to their customers. 

Lynne Shaner used the Internet to buy everything she needed for her wedding and holiday gifts for her husband and step daughter.

Other than food, 90 percent of her purchases are made on the computer in her Washington apartment.

"I find that, by being able to go online and choose the things that I need to choose, and have them delivered to me right at my doorstep, I eliminate all the driving, all the crowds, all the noise of that, and I usually get a better selection," Shaner explained.

Shaner has lots of company.  Analysts say U.S. online shopping has hit records in November and December.  Fifty-seven percent of Americans have made at least one online purchase.

Traditional merchants worry that growing e-commerce will shrink their share of the market.  

Cornell University Marketing Professor Ed McLaughlin says they have reason for concern.  He spoke via Skype. “Anything that can move online, will. It is just a matter of time,” he stated.

McLaughlin says traditional stores can keep their customers by offering goods like clothing, which customers may want to see and try on before purchasing  - as well as items that are difficult to ship.  He says some ”bricks and mortar” stores are also pleasing customers with services that set up or repair computers and electronics.  

Traditional stores also offer a social experience that some shoppers enjoy.

Bill Martin, the founder of ShopperTrak, spoke to VOA via Skype. "There is still a lot of emotion in the buying decision that takes place.  Oftentimes, you need that last sense of ‘this is exactly what I want’ before you part with money," he said. "And you can’t always get that on-line.  It’s a rather cold process."  

Traditional stores can also deliver goods more quickly than online retailers, Martin says.  And smart merchants are using stores to guide customers to websites and using their websites to encourage customers to visit their stores.

While e-commerce worries some merchants, it's a huge boost for delivery services like FedEx and UPS.

UPS Manager Dana Kline says e-commerce means her company is even busier than usual this time of year. “We are expecting 28 million pieces on their peak day, which is December 20, which is up about a million from last year," she noted.

UPS is so busy that it's hiring 55,000 temporary workers during the holiday season to deliver gifts.

Those packages are headed for homes, including Lynn Shaner’s. Experts say as more and more people have Internet access and smart phones, online commerce is likely to continue its growth here in the United States and in other countries.

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