The report demonstrates the pickle retailers are in as they attempt to take on challenges presented by e-commerce — and pricing appears to be a significant problem. Nearly three quarters (72%) of those that have closed stores and failed to recoup those sales online also slashed prices.
For the two decades of Amazon’s entry into retail, disruption from e-commerce has rested largely on consumers’ ability to easily compare prices, and that’s only been fueled by their ability to do so on their phones, including while they’re in stores. But the logistics of e-commerce are also more complex and expensive than traditional retail distribution, so the turn to online sales provides a double-whammy hit to margins.
