Though e-commerce is growing faster than any other retail sector, brick-and-mortar retailers are by no means extinct. Both shopping experiences create different value propositions in the eyes of the customer.
As of 2022, according to Statista, 14.5% of total retail sales were e-commerce, while the rest were from brick-and-mortar retail stores. Business owners who understand each channel’s benefits and limitations can design a channel strategy that aligns with consumers’ needs.
When it comes to brick-and-mortar vs. e-commerce stores, business owners must recognize that each channel presents a fundamentally different buying experience.
Here are some important factors that characterize the online shopping experience:
Shopping at a brick-and-mortar store involves different considerations:
The ability to buy online has given customers control over how much they pay and from whom they buy. However, the product itself is a crucial factor in whether they buy online or in person.
Consumers tend to buy familiar items online; they understand what they’ll be getting and can usually predict how the purchase will turn out. However, for more unfamiliar items, they may prefer to buy in person. They may be unsure if they’ll need to return it, so they’ll forgo the convenience of an online purchase.
Small business owners can strategically price and promote products in each channel to leverage consumer preferences.
In-person shopping via storefronts can create value for the business and its customers, but it also carries significant downsides. Here are some pros and cons of offering in-person retail shopping.
When a retailer has an in-store buying option, the business and its customers enjoy the following benefits:
Ensure customers can find you if you move locations. Change your business address on Google and Yelp, and alert your existing customers to your upcoming move before it happens.
There are also distinct disadvantages that come with a brick-and-mortar store:
When you set up an online store, you create both benefits and drawbacks:
Online retailers and their customers experience the following benefits:
Online storefronts also have some challenges:
When customers buy in person, a unique payoff drives them to give up time, money and effort to travel to a store and interact. For example, they may want personal assistance in buying or leaving a store with exactly what they need. They’re willing to risk paying a higher price or finding the item is out of stock.
In stark contrast, buying online requires low effort. However, customer expectations aren’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.
So, which method should your business choose? In many cases, you don’t have to; you can opt for an omnichannel strategy with both a brick-and-mortar store and an e-commerce store. Small business owners who understand how in-store and online channel processes affect customer expectations can optimize sales.
For example, you can do the following:
Shopping is more than consumerism. For example, it may involve spending the afternoon with friends or temporarily changing our physical appearance. Despite the popularity of online shopping, these highly emotional aspects of the buying experience help in-person shopping maintain its appeal.
By recognizing the deeper reasons consumers buy in each channel, merchants can tailor their brand position, in-store aesthetics and marketing messaging accordingly. Online and in-person buying are different experiences, but one isn’t necessarily better for consumers or merchants. By recognizing each channel’s unique value, small business owners can be strategic in what, where, to whom they sell, and for what price.
Kristen Gramigna contributed to the reporting and writing in this article.