Retail vs eCommerce: The Match-up of the Century

av Eddie Payton

In the red corner, the reigning champion in nearly every market and veteran fighter with over one hundred years under his belt: Retail stores! And in the black corner, an up-and-coming fighter with only a decade of experience and nothing to lose: Online shops!

At the turn of the century came in a huge competitor to all brick-and-mortar stores out there: Web shops. As a customer, you can find competing prices within seconds, avoid lines, and have your purchases delivered to your door.

Shopping centers are hurting

Big “anchor” stores used to define a mall in the US and now they are closing locations in response to online shopping being the latest trend. Malls used to be the place to hang out and shop with friends, but young people don’t need to shop in stores, preferring to shop online thanks to the convenience and savings they can find there.

Britain suffers even more because of the development of online shopping. In 2017, 18% of the retail sales in the UK were done online with nearly 30% of that on Amazon. There are a few suggested reasons behind the drastic changes to the way people shop. Some blame the fall of the “community” aspect of shopping streets, others look at the effect Brexit has had on the pound, and many point to the tax differences between brick-and-mortar stores and online shops. Since businesses are taxed heavier on their rental value than on profits, online retailers can boast lower prices.

In Norway, shopping malls are still being built and growing larger, but they may have a reason to worry. Online prices are competitive and traveling to other countries to shop continues to be popular. For the time being, malls aren’t yet on the way out here in the north.

Not all retail is taking a hit

Just because the big malls are going down doesn’t mean physical locations are completely on the way out. For one, niche stores can offer both the product and expertise that customers are looking for to get advice on which product works best for them. Looking for a new hockey stick? A large retailer may have a few for sale, but the best selection will come from a hockey-specific store with employees who have personal experience with the sport and maybe even the sticks you’re interested in.

At the same time, large, stand-alone stores that have huge selections will probably stay afloat. Getting all your shopping done at the same time is convenient and appealing. Stores like Target and Walmart in the United States as well as Coop Obs in Norway have everything from clothing and furniture to grocery and kitchen supplies.

Malls that aren’t failing have one main thing in common: They focus on luxury. Wealthier areas of the US don’t need to search online to find the best deals and would rather go to the physical location to buy the latest designer fashion or high-end electronics. You’ll find successful malls in the Silicon Valley host these kinds of stores or have tried another strategy: Creating a community feel. Santana Row in San Jose created a feeling of a small downtown but with high-end restaurants, popular fashion stores, and pedestrian-focused roads.

Will this trend of dying retailers reach Norway?

Most likely. Unless regulations and laws are written to prevent the growth of ecommerce, it is inevitable. As Amazon grows across Europe, we can expect it will find a place in Norway. At the moment, high shipping and tariff costs on the small selection of items available to be shipped to Norway are preventing sales.

In the meantime, successful Norwegian online retailers are attempting to fill the need that Amazon has in the States. Internet electronic shops like Elkjøp and Komplett have taken advantage of their existing customer base and infrastructure to sell other retailers’ products in a similar fashion to how Amazon operates. CDON has a similar operation but with a larger and broader selection of products. In addition, has pushed out a shopping department as a separate department from their classifieds listings. All of these sell their own products as well as act as the middleman between suppliers and customers. They all benefit from the middleman having a large audience. A problem for these sites (other than, however, are the shipping prices in Norway that often make shopping in-store a cheaper alternative for customers.

It is fairly common for trends to take hold in Norway some years behind the United States. While the mall culture has begun to fade in the States, Norway might not follow suit in the same fashion or magnitude. The downfall of malls may not be just due to the growing online markets. Some have pointed to the increasing wealth inequality in the US and the effects of the 2008 stock market crash as at fault for the reducing interest in shopping in shopping malls. These are two factors that aren’t matched in Scandinavia and could mean that malls are less likely to die off in Norway or at least to a lesser extent.

As long as Norwegian malls and brick-and-mortar stores continue to develop their online presence, the risk of fading away will go down as well. Increasing engagement on social media will keep people interested in shopping in-store. It's important to keep people thinking about your business and updates from the stores and events help. If your shop sells products, Instagram can be a great way to show featured products, sales, and news. Just the same, creating a basic online store or even just a "click and pick up" option can be enough to increase purchases because when it boils down, you're looking for customers. So maybe, just maybe, there's no need for this match-up...

Need help engaging your customers or reaching new leads? Just contact Racer's team of digital marketers and we can help you out!