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How E-commerce Helps and Hurts Brick-and-Mortar Retail

Many would agree the rise of e-commerce has reshaped the retail landscape. It has provided consumers with the convenience of shopping anytime, anywhere, while also generally offering a wider range of products than what shoppers can find locally.4 However, the emergence of e-commerce has also affected traditional brick-and-mortar retail locations, both positively and negatively.4

How e-commerce helps physical retail locations

Webrooming: This refers to the practice of researching products online before buying them in a physical store. With e-commerce, customers have the advantage of gathering detailed product information, checking customer reviews, and comparing prices. They might then visit physical stores to inspect the product quality, try out the item, and possibly make a purchase.

'Click-and-Collect' services: E-commerce has given rise to 'Click-and-Collect' services where customers order products online and pick them up in a physical store2. This often saves shipping costs for consumers while also increasing foot traffic to brick-and-mortar stores, possibly leading to additional in-store purchases.

Showrooming: Some online retailers use physical stores as a "showroom" for their products. In this model, customers visit the physical store to touch, feel, and try products before potentially purchasing them online. This may strengthen the relationship between online and offline channels, possibly improving customer experience.

Brand awareness: A well-integrated e-commerce platform can enhance a retailer's brand presence, both online and offline.8 The increased visibility may drive customers to physical stores, particularly if the retailer hosts exclusive in-store events or offers4.

How e-commerce hurts physical retail locations

Reduced foot traffic: With the convenience and wide product range offered by e-commerce, fewer consumers are visiting physical stores for routine shopping. This has led to decreased foot traffic in many traditional retail stores5.

Retail space downsizing: As more business is conducted online, some retailers are reducing their physical footprint to cut costs. This trend is particularly noticeable in sectors like books, music, electronics, and apparel6.

Price competition: Online retailers often operate at lower costs than physical stores, enabling them to offer competitive pricing. This usually puts pressure on brick-and-mortar retailers to match these prices, often at the expense of their profit margins7.

While e-commerce has introduced certain challenges for brick-and-mortar retail, it also offers opportunities for synergy and growth. An integrated omnichannel strategy where online and offline channels complement each other may deliver a superior customer experience.8

2 https://www2.deloitte.com/us/en/insights/industry/retail-distribution/future-of-retail-renaissance-apocalypse.html3 https://www.shopify.com/retail/showrooming-webrooming4 https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/the-great-consumer-shift-ten-charts-that-show-how-us-shopping-behavior-is-changing5 https://techcrunch.com/2020/05/12/us-e-commerce-sales-jump-49-in-april-led-by-online-grocery/6 https://www.forbes.com/sites/pamdanziger/2019/04/10/retail-downsizing-will-accelerate-as-75000-stores-will-be-forced-to-close-by-2026/?sh=38928674339e7 https://www.brookings.edu/research/are-online-prices-higher-because-of-pricing-algorithms/8 https://www.colliers.com/en/news/how-e-commerce-supports-the-need-for-brick-and-mortar

Market volatility or lack of liquidity could impair an investment's profitability or result in losses. Factors such as high vacancy, oversupply of the product in the market, increase in interest rates for borrowing loans, bad credit quality of tenants occupying the property, general economic risks such as interest rates, availability of credit, inflation rates, economic uncertainty, changes in laws and general overall deterioration of the market in which the asset sits, all of which could lead to financial difficulties and impact net operating income and can depreciate the value of the property. These factors, in addition to others including increases in the costs in excess of the budgeted costs, the burdens of ownership of real property, environmental liabilities, contingent liabilities on disposition of assets acts of God, pandemics and other national, regional or local emergency conditions, terrorist attacks, and war may affect the level and volatility of asset prices and the liquidity of investment assets.

This article was written by an employee(s) of Crowd Street and the contents of this publication are for informational purposes only. Neither this publication nor the financial professionals who authored it are rendering financial, legal, tax or other professional advice or opinions on specific facts or matters, nor does the distribution of this publication to any person constitute an offer, recommendation, or solicitation to buy or sell any security or investment product issued by Crowd Street or otherwise. The views and statements expressed are based upon the opinions of Crowd Street. All information is from sources believed to be reliable. This article is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any investor. All investing involves risk, including the possible loss of money you invest, and past performance does not guarantee future performance or success. All investors should consider such factors in consultation with a professional advisor of their choosing when deciding if an investment is appropriate. Crowd Street assumes no liability in connection with the use of this publication.

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CrowdStreet, Inc. (“Crowd Street”) offers investment opportunities and financial services on this website.

Broker dealer services provided in connection with an investment are offered through CrowdStreet Capital LLC (“Crowd Street Capital”), a registered broker dealer, Member of FINRA/SIPC. Information on all FINRA registered representatives can be found on FINRA’s BrokerCheck. Additional information is available in Crowd Street Capital's Client Relationship Summary (Form CRS).

Advisory services are offered through CrowdStreet Advisors, LLC (“Crowd Street Advisors”), a wholly-owned subsidiary of Crowd Street and a federally registered investment adviser. Crowd Street Advisors provides investment advisory services exclusively to private funds and does not otherwise provide investment advisory services to the Crowd Street Marketplace or its users. Additional information is available in Crowd Street Advisors’ Form ADV.

Crowd Street and its affiliates do not endorse any of the opportunities that appear on this website. Investment opportunities available through Crowd Street are speculative and involve substantial risk. You should not invest unless you can sustain the risk of loss of capital, including the risk of total loss of capital. Diversification does not guarantee investment returns and does not eliminate the risk of loss. All investors should consider their individual factors in consultation with a professional advisor of their choosing when deciding if an investment is appropriate. Private placements are illiquid investments, in that they cannot be easily sold or exchanged for cash, and are intended for investors who do not need a liquid investment.

Performance information presented on this website has not been audited or verified by a third party. By accessing the Crowd Street Marketplace, you agree to be bound by its Terms of UsePrivacy Policy, and any other policies posted on this website. The Crowd Street Marketplace is only intended for accredited investors.
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CrowdStreet, Inc. (“Crowd Street”) offers investment opportunities and financial services on this website.

Broker dealer services provided in connection with an investment are offered through CrowdStreet Capital LLC (“Crowd Street Capital”), a registered broker dealer, Member of FINRA/SIPC. Information on all FINRA registered representatives can be found on FINRA’s BrokerCheck. Additional information is available in Crowd Street Capital's Client Relationship Summary (Form CRS).

Advisory services are offered through CrowdStreet Advisors, LLC (“Crowd Street Advisors”), a wholly-owned subsidiary of Crowd Street and a federally registered investment adviser. Crowd Street Advisors provides investment advisory services exclusively to private funds and does not otherwise provide investment advisory services to the Crowd Street Marketplace or its users. Additional information is available in Crowd Street Advisors’ Form ADV.

Crowd Street and its affiliates do not endorse any of the opportunities that appear on this website. Investment opportunities available through Crowd Street are speculative and involve substantial risk. You should not invest unless you can sustain the risk of loss of capital, including the risk of total loss of capital. Diversification does not guarantee investment returns and does not eliminate the risk of loss. All investors should consider their individual factors in consultation with a professional advisor of their choosing when deciding if an investment is appropriate. Private placements are illiquid investments, in that they cannot be easily sold or exchanged for cash, and are intended for investors who do not need a liquid investment.

Performance information presented on this website has not been audited or verified by a third party. By accessing the Crowd Street Marketplace, you agree to be bound by its Terms of UsePrivacy Policy, and any other policies posted on this website. The Crowd Street Marketplace is only intended for accredited investors.
For more information, see Legal Documents and Important Disclosures.

Ⓒ 2025 Crowd Street Ltd. All Rights Reserved

CrowdStreet, Inc. (“Crowd Street”) offers investment opportunities and financial services on this website.

Broker dealer services provided in connection with an investment are offered through CrowdStreet Capital LLC (“Crowd Street Capital”), a registered broker dealer, Member of FINRA/SIPC. Information on all FINRA registered representatives can be found on FINRA’s BrokerCheck. Additional information is available in Crowd Street Capital's Client Relationship Summary (Form CRS).

Advisory services are offered through CrowdStreet Advisors, LLC (“Crowd Street Advisors”), a wholly-owned subsidiary of Crowd Street and a federally registered investment adviser. Crowd Street Advisors provides investment advisory services exclusively to private funds and does not otherwise provide investment advisory services to the Crowd Street Marketplace or its users. Additional information is available in Crowd Street Advisors’ Form ADV.

Crowd Street and its affiliates do not endorse any of the opportunities that appear on this website. Investment opportunities available through Crowd Street are speculative and involve substantial risk. You should not invest unless you can sustain the risk of loss of capital, including the risk of total loss of capital. Diversification does not guarantee investment returns and does not eliminate the risk of loss. All investors should consider their individual factors in consultation with a professional advisor of their choosing when deciding if an investment is appropriate. Private placements are illiquid investments, in that they cannot be easily sold or exchanged for cash, and are intended for investors who do not need a liquid investment.

Performance information presented on this website has not been audited or verified by a third party. By accessing the Crowd Street Marketplace, you agree to be bound by its Terms of UsePrivacy Policy, and any other policies posted on this website. The Crowd Street Marketplace is only intended for accredited investors.
For more information, see Legal Documents and Important Disclosures.

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