As a consumer in the 21st century, you’ve probably bought just about anything online at least once before.
Whether it’s groceries, paper products, pet food, personal care items, furniture, or fashion, Americans are buying more goods online than ever. The trend shows few signs of reversing course.
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This is partly thanks to the changing shopping behavior that began during the pandemic. When brick-and-mortar stores were forced to shutter indefinitely, online retailers ramped up production. And if a store didn’t have robust online operations, they had to either quickly scale up online fulfillment efforts or get left behind.
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Of course, many smaller retailers were quickly eaten up by larger corporations who could simply afford to be more nimble during unforeseen circumstances.
Walmart (WMT) , for one, quickly began using many of its stores as online fulfillment centers where it could get orders out to their end destinations much faster due to the ubiquity of store locations: more than 90% of people in the U.S. live within 10 miles of a Walmart.
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Amazon AMZN now outpaces any other retailer in terms of online purchases. Its e-commerce business has grown by approximately $109 billion since 2020 and accounts for well over one-third of all purchases made online in the United States.
The interior of a Best Buy.
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Online shopping still has a runway
Believe it or not, though, online shopping and e-commerce retailers still have room to grow.
Though they’ve had quite the run in the past five years, retailers like Amazon can still scale up further. Grocery is a great example here; most people are still pretty reluctant to buy their food online. Delivery can be pricey, end results and customer satisfaction are mixed, and most foods are still perishable, which means timing is of utmost importance. Unlike a bar of soap or a book, a gallon of milk can’t sit at your front door for hours in the sun.
Electronics are also tricky. It’s estimated that about 30-40% of electronics are purchased online, primarily through Amazon or a handful of other direct-to-consumer giants.
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But Amazon doesn’t have the market captured entirely. While many people might buy headphones or a smart TV on the site, they aren’t seeking out Amazon for all of their purchases. Consider how helpful it is to go in person and test the quality of a television or the audio quality of a pricey new pair of headphones.
There’s still a place for brick and mortar here.
Best Buy launches genius new marketplace
Of course, Best Buy (BBY) is the primary leader in the brick-and-mortar electronic store space. It’s enjoyed relative dominance in the market for years, but as interest in brick-and-mortar wanes, so too does its market share.
So Best Buy announced it will launch a third-party marketplace in 2025 to sell electronics — and potentially expand into other goods.
“We have an established, growing third-party online marketplace in Canada, and we are planning to launch one in the U.S. targeting mid next year,” Best Buy CEO Corie Barry told analysts in a recent earnings call.
“We believe that as the trusted leader in [consumer electronics] we have an opportunity to leverage our positioning and assets to build a differentiated digital marketplace platform, thereby bringing our customers access to a much more expansive assortment and new categories. In addition, sellers and advertisers will have an additional avenue to increase their reach and build their brands leveraging our qualified traffic.”
Best Buy attempted to launch a similar product in 2011, but ultimately shuttered it five years later in 2016 as Amazon gained market share. This service plans to offer more products and services to customers, such as tech add-ons like phone cases or wellness accessories.
But the deeper it delves into what it does best (consumer electronics and their associated accessories), the more it stands to gain, say some analysts.
“I think that Best Buy is going to add a lot of unique millennial eyeballs that are already shopping there; these are really affluent customers, much more affluent than Target and Walmart, even Amazon,” said Megan Potts, founder of Triforce Digital Partners.
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