Dive Brief:

• Despite the growth of e-commerce, just a fifth or so of U.S. consumers shop mostly online, with more than three-quarters heading to physical stores, according to a report in the inaugural issue of Consumer View, a new quarterly from the National Retail Federation.

• That’s just as many or even more than the brick-and-mortar shopping by customers a year ago, according to the report. Just 21% of consumers surveyed say they purchase more than half of their items online. 

• Demographically, those who shop primarily online are younger, wealthier and more urban, the survey found. Nearly half of online shoppers (49%) are 18-34 years old, compared to 72% of in-store shoppers aged 35 or older. More than half (53%) of the online shoppers make $75,000 a year or more, while 71% of in-store shoppers make less. And more than half (53%) of online shoppers live in a city of 50,000 people or more, while 63% of store shoppers live in smaller communities.

Dive Insight:

E-commerce sales, though they’re growing rapidly, remain just 8.5% of total retail sales in the U.S., according to the Commerce Department. And the apparent rebound of physical stores reflected in this research from NRF shows why.

The fact that younger consumers (though more prone to shopping online than their elders) still prefer physical stores shows just how enduring that channel is. And half of all consumers said they shop in stores about the same amount, while 28% said they do so more often, for a total of 78%. Just 22% percent shopped in stores less often.

Traditional store-based retailers themselves are helping that cause by making their locations more appealing, in part through technology. Among consumers who use click-to-brick services, for example, 68% said it improved their shopping experience. Similarly, 66% of those using in-app store navigation and 65% of those using mobile payment in stores liked those features when they tried them.

Not all innovations moved the needle, though: 44% said that in-store digital displays don’t wow them, and a similar share aren’t impressed with store staff who use tablets, smartphones or messaging apps, according to the survey.

As stores continue to dominate sales, there could also be an erosion of e-commerce as retailers try to recoup some of their fulfillment costs. As it stands now, many retailers are under pressure to provide free shipping, sometimes quite fast free shipping. That hits margins hard.

Analysts are increasingly taking into account the damage that the shift to e-commerce is inflicting on retailers’ margins. In addition to tepid sales overall, "the shift to the variable-cost model of e-commerce from the fixed-cost store model continues to suppress operating margins for the sector," Moody’s Investors Services retail analysts said in a report on U.S. department stores emailed to Retail Dive earlier this year.

"When shipping costs are fully allocated to the consumer some time in the future, we will see the rate of internet sales growth sharply decline," retail analyst Nick Egelanian, president of retail development consultants SiteWorks International, said in an email to Retail Dive. "We believe that there is mounting anecdotal evidence that a large percentage of e-commerce are actually additive to overall retail sales, as opposed to coming directly from brick and mortar stores."

In Egelanian's view, the current correction in the physical retail landscape — that is, the large number of store closures and bankruptcies — is in large part a correction in the over-building of retail in the past few decades, and not all due to e-commerce. "Looking deeper … we note [for example] that the 'wholesale' pure retail portion of Amazon's overall business accounts for only about 1% of total retail sales and is not a significant driver of the brick and mortar consolidation we are now seeing," he said.

For the NRF study, Toluna Analytics surveyed 3,002 consumers in the last two weeks of July.