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Good Question: How Much Of Our Shopping Is Online?

MINNEAPOLIS (WCCO) -- With all the hype about a record Cyber Monday and online holiday sales, some might wonder just how much longer will brick and mortar stores be around. Over the past decade, online sales have grown every year, but they still have a ways until they catch up before they reach store sales.

So, how much of our shopping is online? Good Question.

"It sort of depends how you slice and dice the data," says Ravi Bapna, a professor of business analytics and information systems at the Carlson School of Management.

According to the U.S. Census Bureau, about 8 percent of retail dollars were spent online in 2014, up from less than 3 percent in 2006. But, in the five days between Thanksgiving and Cyber Monday, more than one-third of purchases were made online.

"It's important to break it down by sector," says Gordon Burtch, a professor of information and decision sciences at the Carlson School of Management.

About 50 percent of retail purchases in the U.S. are cars, gas and groceries, which are goods people rarely buy online. But take out those sectors, and the numbers jump up significantly.

Bapna estimates people buy 50 percent of digital goods, like music, movies and books, online. When it comes to electronics, the online segment is closer to 25 percent and with toys, it drops to 20 percent. Bapna says Gap, whose online purchases make up 17 percent of revenue, can be used as a good representative of the clothing sector.

"A physical store can only store so many sizes," he says. "The idea is that you get exposure in the store, but then you go online, it works in both directions that way."

But, simply looking at online revenue isn't telling the whole story about how online shopping has influenced the retail market. Bapna estimates half of the goods people buy have been influenced by information they're received online.

"If you look at the influence of online, it's much larger – doing research, reading reviews or price comparisons, even in the store," he says.

He doesn't envision a time when brick and mortar stores will cease to exist, but he does anticipate more stores will focus on mobile devices purchases, which made up one-third of Cyber Monday sales. He also sees more stores trying to become more Omnichannel, which means making the transition from store to online seamless.


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