Brick and mortar vs. ecommerce: Which do shoppers prefer? And what is right for your business? Opening a brick-and-mortar store can be expensive, but some people feel like online stores can’t offer a personal shopping experience.
There are advantages and disadvantages to either option, and many business owners are taking advantage of an omnichannel approach to get the benefits of each option. The answer isn’t so cut and dry, but understanding the benefits and limitations of each shopping experience can shine some light on the best way to reach your customers.
Brick and Mortar vs. Ecommerce
All businesses must build relationships with their customers to get and keep their business, but how you do it depends somewhat on the type of business. Online stores rely on social media, email, apps, and live chats. Physical stores can use all those methods and benefit from making in-person connections when a customer visits the store.
When it comes to opening your store, there are costs and benefits to brick and mortar stores and ecommerce shops. Here are some things to consider when deciding what kind of shopping experience is right for your business and your customers.
Brick and Mortar
Opening a brick-and-mortar store can have significant start-up expenses. There’s the expense of the location, the cost of decorating, and the shelving to display the products. Licensing and permits may be necessary to run your business, depending on your location. Then there are also the technology expenses, like the point of sale software and hardware and any security cameras you may need. Plus, a brick-and-mortar shop needs a good sign out front to let customers know it’s there.
But the costs don’t end there. There are also operating expenses, like utilities and rent, insurance, and maintenance. Marketing and advertising are also necessary costs to bring in customers. Every business will incur custodial and office supply expenses and payroll and employee benefit costs.
And even though sales bring in money, they can also create costs. Processing fees for credit cards or charges disputed by credit card companies can add up.
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With an ecommerce store, the start-up expenses are much lower. Even though you need space for inventory (unless you use a dropshipping service), you won’t spend money decorating or creating signage to advertise your location. You won’t need to spend the money to advertise locally in the same way a brick and mortar retail shop would, and the necessary permits and licenses may be completely different.
To operate an online store, you’ll still need a point of sale system to keep your inventory up-to-date and sell your products. Marketing and advertising on social media platforms will still be part of the operating budget, and so will the cost of payroll and staff benefits, although you may not need staff or as many people. And supplies for cleaning and administration may still be a line item in the budget. And just like a brick-and-mortar store, there will still be credit card transaction fees, especially since online stores can’t take cash.
Considerations with Retail vs. Online Sales
American consumers spent $601.75 billion online in 2019. But 70% of fashion purchases happen offline.
So what does that mean for someone deciding between online vs. brick and mortar?
It all comes down to what the customer needs. As mentioned earlier, in some environments like fashion, customers may want to try clothing on before they purchase. The experience of shopping in person is more interactive, and customers can see and feel the product before they bring it home. There are no shipping costs associated with buying in person, and the return process may be much easier.
But in other cases, making a purchase from the comfort of their couch and having it delivered to their doorstep can be a huge selling point for some customers. Online stores that offer customers free shipping can also entice people who may have been on the fence about a product.
Many brick-and-mortar stores are finding success with an omnichannel retail strategy, meaning they use more than one channel to meet their customers’ needs. For example, large chains like Walmart or Target still offer their in-person shopping experience at each store location. But customers can make purchases from the company websites or apps if they’d like.
And when it comes to how major global events can affect a business, being able to serve your customers in a digital environment can mean the difference between thriving and shutting down.
Ecommerce is the Better Option
As a business owner, there’s a lot to consider when choosing between brick and mortar vs. online stores. Looking at it from a customer’s perspective can be helpful.
For many customers, shopping online is a better experience overall. They can price match more easily, it’s more convenient than fighting traffic to get to a store, it’s faster to make a purchase, there are no lines, and it’s easier to find items when searching online than going to multiple stores. And the online shopping market is growing faster than in-person retail. Many customers expect to be able to make purchases online, and the younger the shopper, the more likely they are to prefer online shopping.
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