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Ecommerce has shifted retail from a store-first model toward omnichannel competition: customers can discover products online, compare prices across sellers and choose delivery, pickup or an in-store visit. That has expanded retailers’ potential reach and convenience, but it has also increased pressure on prices, fulfillment, inventory management and digital investment. Physical stores still matter for local availability, advice, service, product experience, returns and pickup. The central change is not simply that online shopping replaced stores; it is that retailers increasingly have to connect digital and physical channels to compete.
How has ecommerce affected traditional retail?
Ecommerce changed where customers find products, how quickly they can compare offers and what they expect after placing an order. A neighborhood store once competed mainly with nearby shops; it may now be compared with sellers across a country or, through a marketplace, across borders. That wider competition can bring new customers, while making visibility, price and delivery promises more consequential.
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The shift is durable, not just a temporary change in shopping habits. The OECD reports that the share of EU retail firms receiving online orders rose from 23% in 2013 to 43% in 2023. In 2023, 67% had a website and 66% used social media. These figures describe EU firms, generally those with at least 10 employees; they should not be read as a census of every sole proprietor or as evidence that every firm sells directly through its own website. The OECD describes the trend as follows: “Digitalisation has accelerated within the retail SME sector, particularly in e-commerce.”
The U.S. market illustrates the scale of the channel. U.S. Census Bureau data put ecommerce sales at $1,182,881,858 thousand in 2024, compared with $784,621,978 thousand in 2020. In the Census Bureau’s Q2 2026 estimate, ecommerce represented 16.4% of total U.S. retail sales. Census counts an order as ecommerce when it is placed through the internet, mobile networks, an extranet, EDI, email or a comparable online system; the customer does not have to pay online. These measures describe sales and orders, not the share of retail businesses that operate online.
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What is different about ecommerce and store-based retail?
The channels have different strengths and costs. The relevant comparison for a retailer is often not “online or in a store,” but which tasks each channel performs well and how they can work together.
| Retail factor | Ecommerce | Physical retail |
|---|---|---|
| Reach and discovery | Search, social media and marketplaces can put products in front of customers beyond a local catchment area. | Visibility is more closely tied to the store’s location, local reputation and passing traffic. |
| Assortment and comparison | A seller can present a broad catalog, while customers can compare prices, product details and reviews across sellers quickly. | Customers can browse the stock on hand and get help choosing, but space limits the assortment displayed. |
| Convenience and fulfillment | Ordering can happen remotely, but delivery introduces fulfillment costs and a wait. Pickup can connect an online order to a nearby store. | Customers can take available goods home immediately. Travel and store opening hours shape convenience. |
| Experience and service | Product pages, reviews and online support can help with decisions, but they cannot provide the same physical examination or face-to-face assistance. | Customers can see or try products and speak with staff. The usefulness of that experience depends on the category and service provided. |
| Returns | Online purchases may require a shipment or store visit to return; reverse logistics add handling and transport. | A staffed location can accept a return in person, although the retailer still has to inspect, restock or otherwise process the item. |
| Operating economics | Can reduce reliance on customer-facing floor space, but requires technology, marketing, payment processing, warehousing, delivery and returns capabilities. | Requires premises and in-store staffing, while also potentially serving as a showroom, service point, pickup location or local fulfillment node. |
Neither column automatically means lower cost. A retailer’s result depends on factors such as product category, order size, customer and delivery density, returns, service expectations and whether existing stores can support online orders. Ecommerce shifts costs as well as sales: a business may spend less on a particular store footprint but more on digital systems, customer acquisition, packing, shipping and reverse logistics.
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1Repair Windows errors before they cause bigger problems2Scan for outdated or missing drivers - takes under a minute3Clear out junk files and repair common Windows errorsWhy did ecommerce grow, and what did the pandemic change?
Online retail gained ground before COVID-19, and the pandemic accelerated the shift rather than starting it. The OECD handbook’s illustrative U.S. series shows ecommerce rising from less than 1% of retail in 1999 to 15.6% in 2019, then 20.7% in 2020 and over 21% in 2021. Those figures come from that handbook’s series and should not be substituted for the Census Bureau’s separate Q2 2026 estimate; the periods and statistical presentations differ.
Several linked changes made online ordering more useful to customers and retailers:
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- Discovery moved beyond the store: Search, social posts, reviews and marketplace listings can introduce a retailer to people who would not pass its storefront.
- Comparison became faster: Customers can review prices, product ranges, delivery promises and other customers’ ratings without visiting several stores.
- Ordering became less tied to location: A retailer can take orders from outside its immediate neighborhood, subject to its ability to serve those customers.
- Customer interactions became more measurable: Digital activity can help retailers understand what customers view and buy, though using that information effectively requires appropriate systems and analysis.
- Expectations broadened: Customers may want to check availability online, buy through one channel and receive service or collect an order through another.
The result is a more connected retail journey. A customer might discover a product online, check local stock, inspect it in a store, then order delivery—or reverse the sequence by ordering online and collecting it locally.
Does ecommerce help or hurt small retailers?
It can do both. A digital storefront or marketplace can give a small retailer access to customers beyond its town without requiring a network of physical branches. But digital reach does not guarantee profitable sales: the retailer still has to attract attention, fulfill orders, handle service and retain enough margin after channel costs.
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OECD figures show both the opportunity and the pressure in EU retail. SMEs’ share of retail turnover fell from 57% in 2013 to 50% in 2023, while online sales’ share of retail turnover rose from 10% in 2017 to 19% in 2023. These are different measures over different periods; they do not show that ecommerce alone caused the change in SMEs’ turnover share. The figures do show that online sales grew as the smaller-firm share of turnover declined.
Where marketplaces help
- They can expose a small business’s products to shoppers who might not know its name or location.
- They can provide an established place to list and sell products rather than requiring a retailer to build every part of an online sales operation itself.
- They may make cross-regional or cross-border selling more attainable than opening additional stores.
Where marketplace dependence creates risk
- Visibility is not guaranteed: Marketplace ranking and advertising can influence whether customers see a listing.
- Price competition can compress margins: Customers can compare similar products quickly, while platform and fulfillment expenses also affect what the seller keeps.
- The customer relationship may be less direct: A seller that depends heavily on a platform has less control over the environment in which customers discover and buy its products.
- More orders create operational demands: Inventory accuracy, packing, delivery, returns and customer support must keep pace with sales.
A small retailer can make a more grounded channel decision by checking its actual economics and capabilities: which products can be shipped reliably, what customers value about buying locally, how much margin remains after the full cost of each order, and whether an online channel complements or distracts from its existing customer relationships. The OECD also reports an association between digitalisation and productivity, but association alone does not prove that ecommerce caused higher productivity.
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How can traditional retailers compete in an omnichannel market?
Retailers do not need to reproduce every feature of a large online platform. They need to make the parts of their offer customers value easy to discover and buy, while deciding where a store adds something a remote transaction cannot. A workable omnichannel approach connects customer-facing options with the inventory and order processes behind them.
- Choose the customer problem to solve. Decide whether the immediate need is online discovery, a wider assortment, local stock information, delivery, pickup, returns or advice. A channel investment should connect to a specific customer need and an operating capability.
- Make availability dependable. Customers need a clear picture of whether a product is in stock and where. If a website and store use separate or inaccurate inventory records, online promises can lead to cancellations, wasted trips or disappointed customers.
- Connect orders to fulfillment. Establish how an online order will be picked, packed and delivered or made available for pickup. A store can act as a local fulfillment node, but doing so changes staff tasks and requires coordination with in-store stock and customers.
- Use the store for more than transactions. Advice, product demonstrations, fitting, repair, service and local availability can give a physical location a role that is not merely duplicating an online listing. Which services matter depends on the merchandise and customer.
- Track costs by channel and order type. Include marketing, technology, payment, packing, delivery, returns and platform fees—not only the purchase price of the goods. Compare like with like: a shipped order and an in-store sale can have different service and fulfillment costs.
- Build customer relationships across touchpoints. Consistent product information and service make it easier for customers to move between browsing online, speaking to staff and completing a purchase. Any customer-data practices should also meet applicable privacy requirements.
- Expand in stages and learn from results. Begin with a defined assortment, service or location, then review whether customers use it, whether orders are fulfilled reliably and whether the channel is economically sustainable before widening the offer.
Integration is not just a website project. Inventory management, order management, fulfillment, returns, customer data and analytics all influence whether the promise made online can be kept in the store or at the customer’s door. The appropriate level of investment depends on the retailer’s scale and model; the evidence does not establish a single system or rollout that works for all businesses.
Will physical stores disappear?
No evidence here supports a universal prediction that physical stores will disappear. Ecommerce can redirect sales and intensify competition, but stores continue to offer local availability, advice, product experience, services, pickup and returns. Their future depends in part on whether those functions matter in a category and whether a retailer can operate its locations effectively.
A store can also contribute to online sales instead of competing with them. It may let a customer verify a product before ordering, provide a convenient pickup point or help fulfill a nearby online order. Those roles may change the purpose and economics of a location, but they do not make every store valuable by default. Retailers still have to consider local demand, operating costs, the service customers need and how the location fits their wider channel mix.
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What is the impact of ecommerce on retail jobs and local shops?
Ecommerce changes the mix of retail work rather than supporting one simple conclusion about total employment. As more activity involves remote ordering and delivery, the work can shift among store sales, warehouse operations, packing, delivery, customer service, data and technology roles. The effect on a particular town or retailer depends on category, business model and local conditions.
Stores may take on tasks such as preparing online orders, handling pickups or processing returns, alongside serving walk-in customers. That changes workflows and the skills a business needs. The evidence summarized here does not establish a universal number for jobs created or lost, nor does it show that ecommerce by itself determines whether an individual local shop stays open. Claims about employment should specify the place, period, retail category and kinds of work being counted.
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Is ecommerce better for the environment than store shopping?
Not automatically. The environmental impact depends on how goods are moved, packed, returned and stored, as well as the energy used by stores and fulfillment facilities. Delivery consolidation, packaging, failed deliveries, returns and the customer’s journey to a physical store can all affect the comparison; channel labels alone do not determine emissions.
The OECD reports that EU retail CO2 emissions fell 36% and broader greenhouse-gas emissions fell 43% between 2008 and 2023. Those are sector-level changes, not a finding that ecommerce caused the reductions. The OECD also notes that progress varies and firm-size data are incomplete, so the figures do not establish the footprint of an individual retailer or a typical online order. A meaningful comparison needs to define the product, delivery and return patterns, time period and emissions boundary.
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How should a retailer decide which channels to use?
Start with the customer and the economics, not with a presumption that every retailer must sell everywhere. A channel can increase reach but still be a poor fit if orders are costly to fulfill, products are difficult to ship or the retailer cannot maintain accurate availability and service.
- Use online selling when: customers value remote browsing or ordering, products can be presented clearly, and the retailer can fulfill and support orders at sustainable cost.
- Emphasize stores when: immediate access, expert help, product examination, fitting, demonstration or local service are central to the purchase.
- Connect channels when: customers benefit from checking stock online, arranging pickup, ordering items not held locally or returning a purchase in person, and the retailer can coordinate inventory and orders.
- Be cautious about platform dependence when: sales rely on a marketplace but the seller cannot see a viable path to visibility, customer retention and acceptable margins.
The best channel mix may differ by product even within one business. A retailer can use stores for advice and immediate purchases, online listings for discovery and broader assortment, and pickup or local fulfillment where demand and operations justify it. The goal is a coherent service that customers can use and the business can sustain.
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What does the U.S. Census Bureau count as an ecommerce sale?
Its definition is based on how the order is placed, not whether payment is completed on a website. Orders placed through the internet, mobile, an extranet, EDI, email or a comparable online system can count.
Why do different reports give different percentages for ecommerce’s share of retail?
The figures can refer to different quarters, years, regions, definitions and statistical series. For example, an OECD handbook’s illustrative U.S. historical series and the Census Bureau’s quarterly estimate are not interchangeable measures.
Can a retailer sell online without opening its own online store?
A marketplace can provide a route to online customers without a retailer building every part of a direct ecommerce operation. The trade-off is that the seller may depend on the platform’s visibility rules and incur costs that affect margins.
Does a website mean a retailer is selling online?
No. A website can provide information or help customers find a store without accepting orders. The OECD’s figures for retail firms with websites and firms receiving online orders measure different things.
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