Online vs. Brick & Mortar
In this day and age, when technology is basically taking over the world and the future of brick and mortar stores is being questioned, online stores owners still seem to need or they feel they need to own a traditional store too. One can’t deny that physical spaces offer a better and multisensory consumer experience, logistics and lasting brand relationships. Still, online shopping is the future, because of its simplicity and speed, and it is a rising trend that will continue growing. The question that lingers is do you need a physical store, too, or should you go all online? We’ll try to help you in making that decision.
The perks of going all online
The standalone e-commerce venture has many benefits for store owners. Let’s start with the most obvious one: you can reach far more customers than with a traditional store. And then, for the business more important one: start-up costs are significantly lower as are the maintenance costs (taxes, rent, insurance, utility costs). Not only that, the costs of marketing are significantly lower and the efficiency of it is much higher. Online promotion is known for better targeting with precisely aiming at potential customers. Working at home is an advantage you shouldn’t underestimate, it’ saving your money and time and allows you to be more efficient. Time is working on your side, because when a customer orders a product that isn’t in stock, you have enough time to acquire one and send it. With b & m stores that is impossible.
Brick & mortar are not for retirement yet
However, more than 70% of customers still prefer in-store shopping and they spend more money on products bought in b & m stores. People like to feel or try on the product they are buying, it’s simple as that, and online stores can’t make that possible. Size, color, and model are sometimes portrayed as realistic online as they are in physical space. Also, people tend to trust more a business that has a physical space, as it increases the legitimacy of it. Customers are seeking stores that offer more than just products, but a trusting, growing and lasting relationship with a store where they can always come back. One of the biggest perks of having a physical store is that your store location is marketing for itself. Creating a long lasting relationship with customers provides you with another efficient form of marketing- word of mouth.
Money makes the world go round
Both online and physical stores have their ups and downs. As we mentioned above, start-up costs for the online stores are almost insignificant, while when you are buying or renting a space for b & m store, you have to think about legal expenses of conveyancing, rent, and other expenditures. E-commerce is also free from a lot of additional costs such as taxes, utilities, rent, insurance, etc. In traditional stores, a big amount of money is being dedicated to those issues. And now, you probably think you don’t even need b & m stores with all those expenses, but the truth is that physical space is still more appealing to customers and thus provides more money. Paying for labor and you working long hours is another disadvantage of in-store retail. Meanwhile, on the online field, you can do almost everything by yourself.
There is no perfect answer and deciding between these two retail methods is never an easy decision and often an unnecessary one. Taking the best of both worlds is sometimes a wise thing to do. The omni-channel strategies of in-store, mobile, and online complementing each other, rather than being each others’ competitors, provide the best overall experience for customers around the world and along the shopping channels.
Img source: https://www.flickr.com/photos/melenita/15086864676
Nate Vickery is a business and marketing consultant from Sydney. He is mostly engaged in advising entrepreneurs and small businesses. His specialty are finance and internet marketing.