We’ve all heard how e-commerce is chipping away at brick-and-mortar in-store sales, but a new study reveals online operating costs themselves are pulling down brick-and-mortar retailers.
The study, by the HRC Advisory firm, found the pace of online sales growth is actually slowing—for 11 public department stores online sales growth fell from 39.3% in 2012 to 18.6% last year. On top of that, online returns are expensive and can even result in negative profitability for retailers when products are returned late or damaged.
And closing struggling retailers doesn’t look like the best option—the study says in most cases e-commerce sales are not high enough to justify closing stores, which often entail significant lease termination obligations. [BusinessWire]
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