E-commerce Evolution: The Rise of Physical Stores

This assignment examines the evolving landscape of e-commerce, focusing on the trend of online retailers establishing physical stores. It analyzes Amazon's acquisition of Whole Foods and other Australian retailers venturing into brick-and-mortar spaces. The paper discusses expert opinions on the impact of this shift, exploring both the advantages and potential challenges for companies operating in both online and physical markets.

THE FUTURE OF E-COMMERCE- AMAZON AUSTRALIA RETAIL STORE CASE STUDY 1
DYNAMICS IN E-COMMERCE- THE NEED FOR PHYSICAL SPACE
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THE FUTURE OF E-COMMERCE- AMAZON AUSTRALIA RETAIL STORE CASE STUDY 2
For years, businesses have always tried to keep an appealing online presence, but now the
contrary is happening. Amazon, the giant online book retailer, raised eyebrows when it opened
the first physical outlet in Seattle, US last year in November (Walsh 2016, p.35). Similarly, the
looming news that Amazon has as well acquired an Australian whole foods supermarket for
close to $ 18 billion has prompted experts to rethink about the whole issue of electronic
commerce (Koehn 2017, p.46). Before this paper goes further to explain too much on why
Australians should expect more physical establishments of their favorite online retailers, it would
be vital first to note that e-commerce distributors who have been majorly operating online (which
also happens that they were purely specialized in a kind of merchandise). These stores are likely
to venture into broader kind of wares when they set up brick and mortar establishments.
As much as the trend of e-traders seeking physical space does not imply that they down
their tools on the online platform, it denotes that they might be as well multitasking the two
market spaces conveniently. Gary Mortimer, a retail expert, and don at the Queensland
University of Technology, however, is undisturbed by this move by claiming that it has little or
no impact on the existing chain stores that have since then operated in physical establishments
(Smart Company, 2015). By taking a keener look at Kogan, the reputable and homegrown
television seller venturing into foodstuff retailing and thus extending its services from purely
online to physical outlets (which $300 million according to smart Company), we can tell that the
online space might not be as lucrative as a physical presence.
Along the same line of thought, other online retail giants like Harvey Norman, JB HiFi,
and Super Retail Group have expressed their interests in playing both online and physical
marketspace (Taylor 2017, p.31). While it was earlier perceived that e-commerce was an ideal
mode of operation due to low running costs and convenience in supply, Brian Walker, a

THE FUTURE OF E-COMMERCE- AMAZON AUSTRALIA RETAIL STORE CASE STUDY 3
consultancy from Retail Doctor Group, in an attempt to justify the reverse trend, describes the
Australian e-commerce as a “weakened consumer” (Taylor, 2015). He adds that this might be
due to several reasons, including what he highlights as a tradition of people shopping in
departmental stores and supermarkets. As well, impulsive buying in chain stores in unavoidable.
However, he maintains that as much as the trend is likely to keep happening, e-commerce
remains profitable in Australian markets and that the move by some of the biggest retailers is
unlikely to change the status quo. However, embracing both the physical stores and online
retailing will come with a lot benefits for the companies in the retail industry. This is because,
the online platform will be able to serve customers over the long distances whereas the physical
stores will serve the nearby customers (Koehn 2017, p.46). The appreciation of the two platforms
will give the company a chance to serve a wider market than relying on a single platform.

THE FUTURE OF E-COMMERCE- AMAZON AUSTRALIA RETAIL STORE CASE STUDY 4
References
Koehn, E. June 2017. “Amazon could buy up an Australian supermarket chain following Whole
Foods deal, says expert.” Smart Company, Vol. 21. No. 7. Pp.45-49. Available from: Smart
Company Online [21st September 2017].
Smart Company. March 2015. “Australia’s top 20 online retailers: 2015.” Available from
https://www.smartcompany.com.au/marketing/online-sales/australia-s-top-20-online-retailers-
for-2015/ [21 September 2017].
Taylor, D. 2017. “Retail therapy is changing, as e-commerce businesses like Amazon threaten
the future of department stores.” ABC News, vol. 32, No.12. pp. 28-33. Available from: ABC
News Online. [21 September 2017].
Walsh, M. January 2016. “The future of e-commerce: bricks and mortar.” The Guardian, vol. 27,
no. 13. Pp. 34-36. Print.