Online shopping has obviously become much more popular since the pandemic. But will its popularity more or less a transitory phenomenon due to the exceptional situation these years? Will online shopping be cooled down very much when the pandemic fades? Anyway the covid-19 appears less damaging in the recent year and will eventually fade out. It's the time to reflect on this issue.
I've recently asked this question during interviews to students who applied to study economics. They obviously have some experiences in online shopping. Hence, regardless of their level of economics knowledge, their opinions may have some reference value.
To answer the question above, a key issue is that what the real advantage of online shopping over traditional retailing is. To this, students answered that online shopping is more convenient. Based on this belief, most of them also thought that online shopping will continue to prosper as this advantage will not fade even without pandemic. The current pandemic is an opportunity for people to adapt to online shopping. Most of them, before the pandemic, may not have the experience of shopping online. Hence, it was not that popular before as they didn't know it would be so convenient. But once they experienced, they would not abandon it later.
That's the opinion of the majority of students. For this "theory" to be valid, however, one needs to answer why recently, when the pandemic starts fading out, certain big names in online retailers have aggressively extended their physical retail networks. They rented physical stores in malls or on the streets. Originally they also have some physical shops but these were mainly points for customers' picking up their goods purchased online. Customers were even prevented from paying cash to buy goods from these stores. They wanted their stores served only the online business but not acted as other physical stores did. Nonetheless, recently these online retailers allow even payment on the spot, doing exactly the same things traditional retail shops do. So, they has become like physical shops, at least converging to them.
All these look to be contradictory to the hypothesis that online shopping is more convenient and will continue to prosper even after pandemic.
One reply to this suspicion, also from some students, is that after three years of pandemic and virus containment policies, many physical retailers suffered. Eventually landlords cut down rentals for physical shops. Still, with an uncertain prospect, not all physical retailers dared to come back at lower rents. Meanwhile, online shops are doing well. They have an incentive to expand their business. If they rent physical stores at the moment, they can take advantage of the lower rents. Furthermore, for the nature of their business, expanding the points for their customers to pick up goods purchased online help. So, their foray into the physical sector is not because they are not doing well online. By contrast, that's because they are doing well.
Is this reply convincing? But then why these online retailers now allow on-the-spot transactions while they did not allow in the past? Well, we may say the practice of disallowing on-the-spot trade in the past is mainly for building up consumers' habit of ordering goods online (when they were not familiar with electronic payments and sending orders). Now, many people are already familiar with the new way of shopping. Then, there is no reason to sacrifice on-the-spot trade opportunity, which generates more profit to the same firm.
Hence, the "theory" seems to work: it can explain what happens currently and what has happened so far. But is it really a good explanation? My concern is that it is not clear what "convenience" means when we say online shopping has this property. If we don't know the concrete meaning of "convenience", we can always say something is more convenient without being able to challenge this viewpoint. [See also my criticism of using the term "better service" in another post.] Scientifically speaking, this is not good. Furthermore, if we can't say concretely what "convenience" means, we may simply use the "result" as a criterion of discovering the "cause": whenever the result is good, we say it is due to convenience; whenever the result is not good, we say things become not so convenience as before. Obviously, this is not true explanation, and not what sciences are supposed to do. [Another post of mine has also discussed a similar issue].
In fact, it is not obvious to me that online shopping is more convenient than traditional shopping. Yes, you may think that online shopping requires only a click on the button and you can do it anywhere anytime. Meanwhile, shopping at physical stores is limited to specific time periods and you need to take a tour for this. Isn't it obvious that online shopping is more convenient? But don't forget that delivery of the goods after you clicked the button takes time. In contrast, you can immediately take the goods away from physical stores. Furthermore, many goods are physical in its nature (software is an exception). Inspection of the physical goods and purchasing them happen in the same place when you are in a physical store. For online shopping, the two processes are separated. One may worry that the pictures of the goods displayed online do not reflect the reality. Returning the goods afterwards, even if it can be done quickly, is an inconvenient thing.
So, though online shopping may be convenient, it is not so all round. In fact, the online retailers must know it very well. That's why they expand their physical store networks to complement their online service.
Hence, we must figure out which aspects are really convenient and which are not. Only when we can figure out, we can have a better idea of what its future would be.
After an interview with students who told me that online shopping was "convenient", I get that asking questions in this way could not stimulate their thinking in the right direction. Hence, when I had an opportunity to interview (another group of) students again, I revised my questions: some goods appear to be more suitable for online shopping while some other goods may not be so suitable. Could you identify which goods are suitable and which goods are not? Please also explain. Then, I got lots more answers about why online shopping in some goods might fade away. What are these goods? I think you would have your own answer upon reflection. If you haven't thought about it before, why don't you try now.
I think this time my question can really stimulate students think more clearly about the nature of online shopping.
