E-commerce vs. Brick & Mortar: The State of Retail in 2021

Kyna Ysabel
Thinking Pandas
Published in
5 min readFeb 22, 2021


When looking at Brick and Mortar vs. E-commerce, you must understand the difference in the shopping experience. E-commerce offers a different shopping experience than visiting a brick-and-mortar location, so we’ll go through some major differences between e-commerce and retail businesses.

Brick and Mortar: Can physically interact with a product

E-commerce: Rely on images and videos to learn about a product

Retailers know that change is the only constant. Brick-and-mortar retailing is in the midst of massive disruption and is closing hundreds of stores each year. The e-commerce business model, with its historically lower costs, is going through a transformative period. Traditional brick-and-mortar businesses are adapting and transforming their business models; some are even trying to integrate a mix of online and offline channels to serve customers better.

To help you better prepare for your business this year, we will explore the behaviors and strategies of shoppers and retailers including why online stores have higher profit margins than their offline counterparts and how consumers choose which brands to buy.

Behavior & Strategies of Shoppers

Source: https://www.bigcommerce.com/blog/wp-content/uploads/2017/09/How-we-buy.jpg?x41656

Shopping habits changed so rapidly in 2020 that thousands of businesses were caught unaware. Trends that were in their infancy and forecast to, in some cases, materialize over the course of the decade have been accelerated beyond all recognition. For example, There was a huge shift to online shopping since the start of the crisis, with 53% of consumers now buying more things online than normal, and many retailers found themselves unable to adapt to the new consumer demands without the correct infrastructure in place.

As a result, an overwhelming number of shoppers are being let down by online orders since the pandemic began, contributing to an e-commerce climate in which trust is now the primary motivator when selecting who to buy with as unreliable delivery has become all too common.

While the COVID-19 pandemic has skyrocketed the growth of online shopping, there is still a large segment of the population that wants to venture away from their computer screens and have in-store experiences. According to Raydiant’s second annual State of Consumer Behavior Report, 46% of respondents said that given the choice, they prefer to shop in person rather than online.

Source: https://retailleader.com/consumers-still-prefer-store-shopping

Key findings of the State of Consumer Behavior 2021 report include:

  • 33% of respondents prefer shopping at physical stores because they like to view, touch and interact with physical products, while 26% enjoy the overall shopping experience that a physical location provides and 13% like the immediacy that in-store shopping provides — as opposed to waiting for delivery.
  • 29.8% of respondents said in-location customer service has gotten better in the past year, while 17.4% said customer service has gotten worse. A memorable interaction with one or more employees could be enough to coax a customer back, while a poor interaction could drive them into the arms of (possibly digital) competitors.
  • 48% of respondents said they have replaced products they typically purchase at physical stores with competitors’ online alternatives. 25% said that they switch brands more often today than ever before.

How is 2021 shaping up?


Worldwide, e-commerce growth will decelerate substantially this year, despite consumers’ newfound enthusiasm for digital shopping solutions. We forecast that worldwide e-commerce growth will downshift to 14.3% in 2021, partially because of a brick-and-mortar rebound and partially because so much growth was pulled forward to 2020. We also forecast that overall worldwide retail will rebound to 5.1% growth in 2021.

China will continue to lead the world in digital buyers in 2021 with 792.5 million (33.3% of the global total); it will produce $2.779 trillion in e-commerce sales (56.8% of the global total), and it will become the first country in history to transact more than half of its retail sales digitally (52.1% of retail will be e-commerce).

Brick and Mortar Retailers

Following a dip in 2020, we forecast that total retail sales growth will begin to recover in 2021, rising 2.3% to $5.630 trillion. On the heels of outsized 32.4% growth in 2020, e-commerce sales growth will moderate to 6.1%. Brick-and-mortar retail sales will rebound from a 3.2% decline in 2020 to a 1.6% gain in 2021.

Brick-and-mortar retail will incorporate digitally-enabled technologies to make stores more experiential and frictionless. Click and collect, cashier-less checkout, contactless payment, and digital signage will streamline in-store transactions. Increased emphasis on atmosphere and community-driven experiences will make retail more inviting.

With the significant and sustained shifts in consumer behavior and market dynamics, 2021 is a year we will continue to see winners and losers emerge across segments. Large retailers who have already emerged as winners this year would continue to extend their lead whereas traditional and smaller retailers will be left challenged to act with urgency to expand into digital while facing continued financial and competitive pressures. Retailers in positively disrupted sectors like grocery, home improvement, and specialty need to focus on sustaining the customer gains they have made by continuing to expand and differentiate their digital footprint viz a viz the large retailers.