Journalists love to decry the end of brick-and-mortar retail, but statistics seem to show that they’re right

Reporters and news sites love to make grand proclamations about the world based on one set of data or an isolated incident. And if the latest headlines are to be believed, the brick-and-mortar retail industry in the United States is dying (albeit slowly).

Recently, a slew of brick-and-mortar retail chains in the US reported dismal sales figures, severely driving down share prices and the stock market as a whole. Some of the more famous brick-and-mortar retail chains reporting losses or weaker than expected earnings were Target, Staples, JC Penny, Urban Outfitters, PetSmart, and the hilariously-named Dick’s Sporting Goods.

Obviously, by simply looking at these numbers alone, it would be easy to say that brick-and-mortar retail is on its way out, and online retail is the wave of the future. Every time a story like this hits the news, reporters announce the end of brick-and-mortar retail as we know it. However, there are still plenty of new shopping malls being built and new stores opening every day. Is brick-and-mortar retail really in as bad a shape as we have been led to believe?

Turns out, there may be a large element of truth to this idea that e-commerce is taking over, and traditional retailers are suffering because of it. Retailers keep complaining that their online competitors are driving them out of business while news of online retail explosions like Cyber Monday make is seem like everyone is shopping online now.

Recent data released by the United States Department of Commerce backs up these anecdotal claims with hard evidence that yes, online retail is increasingly cutting into brick-and-mortar retail sales.

The latest numbers from May, 2014 show that, when adjusted for seasonal variance, the percentage of all retail transactions which take place online has been steadily growing. In the first quarter of 2014, 6.2% of all retail sales were online sales.

At first, the number 6.2% doesn’t exactly seem like a game-changer to the retail industry as a whole. After all, that means that 93.8% of all retail sales are still made in brick-and-mortar stores. Surely, this wouldn’t cause the industry to be on the brink of collapse. And while it may not signal a complete collapse, it should be worrying to brick-and-mortar retail dinosaurs.

After all, that is almost one percentage point higher than in Q1 2013, which accounts for $10 billion in sales that moved from brick-and-mortar retail to online retail in just the space of a year. And since statistics started to be tracked in 2005, Online sales have risen more than 4%. That is a trend worth noting.

The lesson to be gleaned from all of this is that brick-and-mortar retail needs to work harder to adapt to an increasingly online world in order to avoid complete, if far-off, extinction. Adapt to the changing trends, or perish.

Likewise, online retailers, wholesalers, and entrepreneurs shouldn’t rest on their laurels. The big brick-and-mortar retail chains are going to move online soon, and in a big way. The current crop of online retailers may not survive this invasion unless they continue to find ways to innovate and stay ahead of the pack.

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