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The Macro Economy of Hybrid Retail

As the rest of the world knows, almost every industry is experiencing digitization. According to data, by 2030, 90% of our purchases will be made online.

For the retail industry, this means that traditional retailers will be forced to be more accessible in new ways.

The graph shows users' penetration to purchasing online per category. Sources:

If retailers do not adapt to new ways of meeting customers through online and offline channels, local and global economies will suffer.

Who is this affecting?

From the micro perspective, if stores do not adapt to new ways of meeting their customers, most will either close their storefronts, and new businesses will shift online, or they will shift to selling products via drop shipping or stocking products in warehouses. In addition, it will cause the internet to become extremely crowded, making it difficult for everyone to do marketing at a reasonable cost and difficult to find products on demand quickly.

In the long run, it will result in a monopoly effect by the current market giants.

As a result, retailers must adapt to new ways of meeting customers online and offline. If they do adapt, every consumer will have access to every product available locally and internationally, and stores will be far more sustainable by relying on their local customer base.

At the macro-economic level, it has an impact on several entities :


When people buy more from their market, consumers and stores pay more taxes to their country, the cross-border supply chain receives more orders, and demand for products and stores increases; this creates higher valuation for the lands, and the population is increasing due to high demand for the grounds and ecosystem, which means the local economy is flourishing.


When people buy more locally, local lands are in higher demand due to increased traffic, and the need for shop locations is increasing, so stores will pay more taxes to municipalities, which is their primary source of income.

Real estate corporations.

The higher the demand, the higher the price. Therefore, the value of the real estate is affected by the market and traffic in their area. When local businesses meet the needs of their community, people want to buy more, and the ecosystem of their local environment grows, increasing the value of real estate lands.

Shopping centers and malls.

When renters meet the needs of their target audience, it generates more traffic and raises the value of the shop space. As a result, they are paying more in rental and sales fees each month. This is the primary source of income for shopping malls.

To summarize, traditional retailers must adapt to new ways of engaging with customers online and offline. This will ensure economic sustainability while also improving our quality of life.


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