Ecommerce Has A Bigger Impact Than You Think

David Shulman is a senior economist at the UCLA Anderson Forecast.

Ecommerce is having a big impact on brick-and-mortar retail, including daily needs and experiential modes. While investors have been focusing on these retail niches as a way to protect against ecommerce, a new paper from David Shulman, senior economist for the UCLA Ziman Center for Real Estate and UCLA Anderson Forecast, shows that ecommerce is taking a growing share from retail spending. Ecommerce currently accounts for 8.9% of all retail sales—which generally puts retail investors at ease—however, that number includes automobile, gas, auto parts and restaurants, all of which are not “amenable to ecommerce competition,” according to Shulman’s research. When you adjust for those retail classes, ecommerce’s bite of retail spending actually jumps up to 15%. For grocery, that number is growing rapidly. The paper cites a Goldman Sachs report forecasting ecommerce will account for 10% to 20% of grocery sales alone in the next decade. Now, Amazon’s acquisition of Whole Foods has highlighted the growth, and forecasted future growth, of ecommerce. To find out why this is significant for the brick-and-mortar market and why ecommerce is poised to continue to take an increasing share from retail spending, we sat down with Schulman for an interview.

GlobeSt.com: There has been a lot of discussion about Amazon’s acquisition of Whole Foods, and if it has positive or negative implications for brick-and-mortar retail. What is your take?