CJ Chu is a retailer’s nightmare.
The 24-year-old associate for a private-equity firm does “99 percent” of his shopping online — even toothpaste. He’d rather buy groceries on the Web than walk to the supermarket.
“Convenience and free time is something I value,” said Chu, who works for Bridge Growth Partners LLC in New York. “Ordering online just makes more sense.”
Chu is an extreme case. Yet millions of Americans like him are abandoning stores faster than executives predicted, pushing the industry to a precipice. Traditional retailers, for the first time ever in 2014, will generate half their sales growth on the Web, according to Stifel Financial Corp. That means about $18 billion in new revenue generated this year will come from online purchases, an analysis of U.S. Census data shows.
The stampede online will only accelerate as 80 million U.S. millennials start families, buying homes and filling them with stuff. Mobile shopping is giving e-commerce another boost. Next month, Amazon.com Inc. (AMZN) will start selling a smartphone that will allow shoppers to scan a product in a mall and purchase it from the company’s online store, giving retailers another reason to fear their most potent Web rival.
It’s widely accepted that traditional chains must mesh physical and online stores into a seamless shopping experience, but “nobody is doing it well,” said Anne Zybowski, vice president for retail insights at Kantar Retail in Boston. “There isn’t any best-in-class because nobody is there yet.”