One of the narratives of the past two decades is how online shopping has transformed the American shopper, freeing consumers from the need to drive to a store to pick up the latest book or music release.
But it turns out that the rumors of bricks-and-mortar shopping's demise have been greatly exaggerated.
While online retailing is certainly growing quickly, another retail category has had a much bigger impact on the way Americans shop. That's warehouse clubs and superstores, according to a new working paper published by the National Bureau of Economic Research from University of Chicago researchers Ali Hortaçsu and Chad Syverson.
That's why despite predictions that e-commerce would eviscerate retailers, that scenario hasn't played out -- except for the notable exceptions of the music and video industries, which have largely shifted to digital formats, the authors noted.
Americans still appear to prefer shopping in person, but where they want to spend time browsing the racks has changed considerably. While department stores and mom-and-pop retailers were once dominant, warehouse clubs like Costco (COST) and supercenters operated by the likes of Walmart (WMT) have gained market share.
That's left some retailers, such as Sears (SHLD) and Radio Shack, "struggling to adjust," the authors noted.
The four largest companies in the big-box segment accounted for 8 percent of total retail sales in 2012, or about 50 percent more than all e-commerce sales that year, the researchers found. Sales at warehouse and big-box stores jumped more than tenfold from 1992 to 2013, rising to $420 billion. Amazon (AMZN), the biggest online retailer, saw its sales rise by about $38 billion from 2000 to 2013, while Costco, the largest warehouse chain, saw its U.S. sales jump by $50 billion during the same period, the researchers noted.
"The current scale and influence of this single sector of physical retail relative to all of e-commerce suggests that while physical retail is likely to continue evolving in the coming years, it is unlikely to meet its demise soon," they noted.
Yet the rise of the warehouse store is leaving victims in its wake, given that counties where new warehouse stores opened saw a decline in the number of department stores. It's as if the warehouse stores are taking a page from "Field of Dreams": "If you build it, they will come."
But why are Americans shifting their preferences? While the paper didn't delve into the psychology of the modern shopper, it's clear that warehouse stores appeal to harried Americans, given that they offer a one-stop location for groceries, clothes, household goods and more. More than three-quarters of shoppers are now buying their groceries from a nongrocer.
With families increasingly strapped for time, it may simply make more sense to visit Costco rather than visit the supermarket, a department store and an electronics retailer separately.
As for e-commerce, the sector's best days have yet to come.
"Although online retail will surely continue to be a force shaping the sector going forward and may yet emerge as the dominant mode of commerce in the retail sector," the researchers noted, "its time for supremacy has not yet arrived."