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Retail or E-tail? Buying Online Vs. Buying in Person

ByKristen Gramigna, Last Modified
Jul 20, 2015
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> Marketing

Though ecommerce is growing faster than any other retail sector, the opportunity for brick-and-mortar retailers isn’t extinct, just shifted.

In the first quarter of 2014, more than 75 percent of shoppers over age 15 bought something online.

Though e-commerce is growing faster than any other retail sector, the opportunity for brick-and-mortar retailers isn’t extinct; it’s simply a different value proposition in the eyes of the customer.

Business owners that recognize the different lenses consumers see the world through when buying online versus buying in person can design a channel strategy that aligns with consumers’ needs, regardless of where they buy. Here’s why:

The price of convenience and product expectations  

Buying online has given customers control over what they pay, and from whom—but the product in question is an important factor in why they buy online or in person. As consumer psychologist Phillip Graves explains in The Chicago Tribune, consumers are likely to buy familiar, branded items with qualities they can reasonably predict online.

Yet, if the item they seek isn’t familiar to them, they’ll buy in person. The reason? The likelihood that an unfamiliar item will need to be returned if bought without seeing and feeling it in person outweighs the convenience of buying online. 

Small-business owners can strategically price and promote products in each channel to leverage this reality. A branded product that consumers have probably bought before, and can find from 50 other retailers, may be more cost efficient to sell online only, priced aggressively.

Those proprietary or new-to-market products that consumers need to see and feel in person to confidently buy may justify storefront real estate and inventory costs, if sold only in store, without deep discounts.

Related Article: From Mall Madness to Sadness: Why Shopping Centers Will Soon Be Obsolete

Different effort, same expectations

When customers buy in person, they’re willing to give something up: time, the money and effort it takes to travel to a store and the energy required to interact—because they believe there is some unique “payoff.”

It may be access to personal assistance in the buying process. It may be the luxury of leaving a store with exactly what is needed in the moment.

Though there’s the risk that a merchant won’t have an item in stock or that it may not be sold at the lowest price, they’re willing to take it because of some perceived value buying in person stands to offer.

In stark contrast to buying in person, buying online requires low effort—but the customer expectation isn’t necessarily different. Customers buy online because they expect choice, transparency about inventory levels and the ability to research prices, customer reviews and promotional offers.

Small-business owners who understand how channel processes (in store and online) impact customer expectation can optimize sales.

For example: If customers come to a physical retail environment expecting personal attention, train customer-facing staff to give them a hands-on experience. Customers who visit an e-commerce website may be driven by a similar desire to find what they need as quickly as possible. Deliver on this expectation by optimizing product copy to include keywords customers most often use to search, offering expedited shipping options and allowing customers to checkout as a  “guest,” using the form of payment they prefer.

Related Article: Why Some Customers Prefer Online Business to Traditional Retail Stores

The emotional payoff 

Shopping is more than consumerism. It may involve the opportunity to spend the afternoon with friends, to temporarily alter the way one perceives himself/herself by changing physical appearance or surrounding oneself with company he/she strives to keep. Despite the popularity of buying online, these highly emotional aspects of shopping maintain the appeal of buying in person.

In a 2013 study conducted by retail strategy firm WD Partners, nearly 80 percent of respondents said instant gratification was the key benefit to buying in person; 75 percent said the experience of human connection was the reason they bought in store.

By recognizing the deeper reasons consumers buy in each channel, merchants can tailor their brand position, in store aesthetics and marketing messaging accordingly.

Buying online versus buying in person is different—but one isn’t necessarily better, for consumers or merchants. By recognizing the unique value each channel inherently delivers, small-business owners can be strategic in what they sell, where, to whom and for what price.

Kristen Gramigna
Kristen Gramigna
See Kristen Gramigna's Profile
Kristen Gramigna is Chief Marketing Officer for BluePay, a provider of ecommerce payment processing. She brings more than 20 years of experience in the bankcard industry in direct sales, sales management, and marketing to the company and also serves on its Board of Directors.
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