Have you heard? The Internet is winning.
Last year’s holiday shopping season was the first time more shoppers planned to go online than into a physical store. In 2017, 55 percent of respondents said they would be doing their shopping online, up from 45 percent in 2016, according to Deloitte.
CNBC has released a list of 19 major retailers that filed for bankruptcy last year- some of them more than once. Included are familiar names like Toys R US, The Limited, RadioShack, Rue21 and other. Likewise, in an article entitled “Retail Apocalypse,” Fox Business reports that 23 major retailers have plans to close additional stores this year. CNN Money calls 2017 the worst year in history for retail store closings.
Everywhere you turn, things are looking bad for brick and mortar retail. On the other hand, e-commerce is booming. Walmart’s online sales increased by 47 percent last year, while Amazon by itself made up 43 percent of all e-commerce sales. During the 2017 holiday season, e-commerce sales increased by over 10 percent while brick and mortar sales grew by a paltry four percent.
Internet of money
It seems to follow, that if the Internet is having such a massive influence on how we shop, how we are entertained and how we live our lives, that at some point the Internet is going to change how we interact with money as well. While credit cards have done a great job of bridging the gap between paper money and the Internet, something more is still needed. The Internet needs native currencies of its own.
Cutting out the middlemen almost always creates greater efficiency, speed and monetary savings. Using credit cards involves a half dozen or more different businesses working in tandem to make sure that your money eventually ends up in the hands of the retailer. This is fine for now, but a form of money that’s native to the Internet, that doesn’t have to go through the hands of numerous middlemen, that is the ultimate goal. In an era where cryptocurrency begins to take its rightful place as the money of the Internet, massive dumps of hacked credit cards will be a thing of the past.
Not dying, adapting
Brick and mortar stores still comprise 85 percent of retail sales, so there’s virtually no chance that you’ll see cities full of shuttered retail stores any time soon. However, Internet commerce is forcing brick and mortar companies to adapt to a changing landscape. They have to be more price competitive, sensitive to their customer’s needs and adaptable.
Cryptocurrencies aren’t going to destroy banks - not now, not ever. But they will eat into banks’ profits, and force bankers to change their ways. It’s amazing that in an era of instant global communication, near-instant peer-to-peer money transmission anywhere in the world, satellites and the Internet - traditional banks are still only open from 9 a.m. to 5 p.m. They’ve yet to adapt to people’s actual needs, seeing their customers as something to be exploited rather than cultivated.
As cryptocurrency continues to go mainstream, banks will have to find ways to actually accommodate their customers and provide good service, instead of just soaking them with fees. Banks will have to innovate, offer new products, be price-competitive and actually stay open during hours when their customers can come in.