In the digital age, traditional companies transitioning online is nothing new. What’s surprising is that retail industries rooted in customer choice and personal service have been disrupted by online e-tailers offering the same goods for much less. Online competition is threatening to upend these markets.
Online eyewear is now a $466 million dollar industry, siphoning business from optometrist office showrooms. Purchasing glasses online through companies like Warby Parker and EyeBuyDirect.com has changed not only the purchase experience, but also reportedly saves the consumer almost 90 percent over what they would pay in a traditional setting.
The online eyewear industry has grown 7.3 percent annually since 2011, but optometrists and opticians suggest that customers should be wary about buying glasses online. According to a 2012 study from the School of Optometry at the University of Montreal, nearly 82 percent of frames tested did not meet proper fit requirements. Online competitors have a response to this: new facial recognition software and live-chat features to assist customers in finding the best pair.
One of the biggest purchases a couple will make has quickly gained traction in the online world: E-sales now comprise a significant portion of the diamond market. Major online ring retailer Blue Nile reported sales of $480 million in 2015. Similar to other industries with surging online revenue, Millennials are behind the trend. According to the 2016 DeBeers Diamond Insight Report, 92 percent of Millennials browse engagement rings online before making their final purchase.
Chain retailers and boutique jewelers have criticized online retailers, citing that not being able to see the diamond in person means dissatisfied customers. Some online ring shoppers seem to think it’s worth the risk, given reports of savings of up to 50 percent.
Furniture retailers and interior designers are taking advantage of the internet’s global reach. Italian crowdsourcing platform CoContest is revolutionizing the way that customers connect with interior designers. By encouraging designers to provide “submissions” to compete for the customer’s business, the consumer has access to a worldwide network of professionals. The trend echoes the home furnishings’ transition to online sales. Furniture retailer Wayfair.com had a 66 percent increase in net sales for the 2015 fiscal year, bringing in more than $490 million in revenue.
The reason for this shift? Again, look at the Millennials. Data from 2015 suggests that Millennials were responsible for 37 percent of all furniture and bedding sales. Similar to the jewelry industry, nay-sayers think significant household purchases should be appraised in person. Without seeing and feeling the product, not to mention seeing how it fits in a space, a return is inevitable. Although many online retailers offer long trials and free returns that benefit the customer, it’s not always a win for the company. Just imagine the cost of return-shipping and refunding a three-month-old couch.
• Interview local brick-and-mortar businesses about how online competition is impacting their business. Ask what measures they have taken to try to combat the change in their sales.
• Look into what other local industries are impacted by increased online sales. You might also find a growing number of local online companies to report on.
• Talk to workers and managers in the shipping industry to see how increased online sales has impacted their business figures as well as their staffing. Local branches of global shipping companies may have interesting stories to tell.