E-commerce has grown dramatically in recent years, but the vast majority of retail sales still take place the old-fashioned way, in stores. In this Fool Live clip, recorded on June 15, Millionacres real estate analyst Matt Frankel, CFP, and editor Deidre Woollard discuss just how much bigger e-commerce could get in the next few years. 

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Matt Frankel: The Census Bureau does a really good job of keeping track of this quarter-after-quarter. The current statistic is about 13.5% of all retail is on e-commerce. A lot of people don't realize just how much is still going on in physical retail and how much will continue to. I think we might eventually get to 25%. It's not going to happen by 2025. The current trajectory is pointing toward about 18%. It's pretty much been a steady climb since over 10 years ago. I want to say e-commerce was about 5% of retail sales in 2010, and it's really been very steady. There was a spike due to the pandemic, but it's generally been really steady. Even Amazon is opening physical retail stores because they realize that there's only so much you can convert to e-commerce. I don't think that e-commerce is necessarily the wave of the future. I think omni-channel retail is the wave of the future. Yesterday I bought this mouse yesterday and I got it from Best Buy (BBY -1.35%), and it was delivered to my house in two hours. The only way that those delivery times are possible as if there's a physical location nearby that they can deliver from. They essentially use Uber for delivery that where somebody goes to Best Buy, picks up the mouse and brings it to my house. It's really going to be an omni-channel market rather than an e-commerce market going forward, which I think omni-channel is going to be the big winner and that's really why I don't think you're going to see that 25% number within the next five years.

Deidre Woollard: Well, yes. So where does something like BOPIS or curbside pickup fall in e-commerce? Is that e-commerce if you're still going to the physical store, but you're buying it online?

Frankel: Yeah, that's where a lot of the gray area is do you really consider that e-commerce. Like the mouse I bought from my local Best Buy, that just happened to be delivered to my house. Is that considered e-commerce because it definitely came from a physical store, not a warehouse.

Woollard: Right.

Frankel: There's a lot of gray area there and I think the lines are going to get even more blurry as we go on. Curbside is definitely here to stay. People realize that's a big convenience. A lot of retailers were forced to pivot to that during the COVID pandemic. It was not a smooth transition at first. A lot of retailers did not get curbside right for a few months I could tell you that firsthand. But a lot of them did work out the bugs and now it's really an essential part of their business and it's something that's almost expected going forward. In my local Best Buy, I was just talking about, there's an entire row of parking spots that are dedicated to curbside pickup. I think they call it car-side because you're not actually by the curb anymore. I think curbside it's going to be a big, big part of retail going forward. But I really think that you're going to see physical locations just as much as ever. Obviously, some types of retail are going to pivot more online. Where you don't really need a physical location for. But in a lot of cases, people want things quickly, which needs a physical location. People want to see things in a lot of cases before they buy, I can buy a refrigerator online. I'm not going to because I want to see what I'm buying first because that's a big purchase. A lot of places need physical locations, but you're right that the lines are going to get really blurred as to what exactly is e-commerce over time.

Woollard: Well yeah even way before the pandemic showrooming was considered a trend where you would go and see the refrigerator and then go home and buy it online and so that was the thing that was already in place, too.

Matt Frankel: Retailers like Best Buy, especially there I keep mentioning them, they've done such a great job over the past decade of transforming their business. But companies like Best Buy, Home Depot, Lowe's, those types of places, really saw this showrooming thing going on and said, "Why can't we get this action? why can't somebody go check something out of one of our competitors and then go online and buy it from us and come pick it up." They have all done really good jobs of pivoting. If you include things like curbside and the quick home delivery, like I just mentioned, if you include all of that then I make the case for e-commerce could be 25% by 2025. But if you count those things as physical retail, which I do, I don't think you can get anywhere near that total.