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The Battle of Retail: Which Fares Better, eCommerce or Brick and Mortar Retail?

The Battle of Retail: Which Fares Better, eCommerce or Brick and Mortar Retail?

If you have a brick and mortar store, you’re likely thinking of ways to adjust and add to your business model in today’s upended business climate. If you’re thinking about expanding your business into the online world of eCommerce, you likely have a lot of questions as well. Not to worry, we’re here to help you work through all of it to decide whether pivoting to or adding on eCommerce works for you.

It may seem daunting, but implementing eCommerce into your business is likely one of the smartest decisions you could make, and you should address it sooner rather than later.

What Is eCommerce?

First things first: let’s define eCommerce. The term “eCommerce” refers to the sale of products solely through the internet. So if you go online – whether it’s on your phone or on your computer, and make a purchase of something – that’s eCommerce.

Retail, in contrast, is the sale of products in stores, person-to-person, or through direct mail.

Many businesses these days feature a blend of retail and eCommerce. Take department stores like Macy’s for instance. Or even big box stores like Target. These companies have physical locations but also have eCommerce websites to sell their products online.

Macy's ecommerce shop

eCommerce VS Retail: What Are the Differences for Customers

From a consumer perspective, the shopping experience is starkly different between retail shopping and eCommerce shopping. There are distinct advantages and drawbacks to each of them, and it’s important to understand what each of them are. Let’s go through some of the most important aspects of eCommerce vs. retail that are different.

Interaction With the Product

At a retail location, your customer can physically interact with the product to get acquainted with the size, feel, and features. This does typically make it much easier for a consumer to determine what they need and make a purchasing decision.

Conversely, with e-Commerce, your customer has to rely on product images, videos, and renderings. Although this makes it more challenging for the consumer, there are ways to improve the experience with 360-Degree views, virtual try-ons, sizing comparisons and charts, and other interactive features.

A great example of this is with shoes. At a retail store, a customer can try on different styles and sizes to determine the best fit. This is obviously a challenge for purchasing shoes via eCommerce, but a company can provide a full range of images, reviews, video descriptions, and even sizing advice to make the purchase experience smoother.

Ecommerce and Retail

Obtaining the Product

Here’s another stark and quite obvious contrast between retail shopping and eCommerce shopping. If you’re at a physical store or location, with few exceptions (such as clothing showrooms for Bonobos and other eCommerce first companies), when you purchase the product, you take it home with you. It provides consumers with the instant gratification they seek and also fulfills the needs for consumers who absolutely need to have their product immediately. This is what most of us have been used to for our whole lives and is what most consumers have typically expected, up until recently.

Even though the delivery times have been rapidly accelerated with eCommerce purchases (thank you Amazon), it still takes time for your product to arrive. That being said, times have changed, especially with the pandemic, and more and more consumers are willing to accept waiting longer times for products as a trade-off for being able to shop in the convenience and safety of their own homes. The extra time it may take to drive to a retail location, find parking, walk around the store, potentially be in a crowd, and wait in line to purchase are all aspects of shopping that many consumers simply don’t want to deal with anymore.

Product Availability

As a consumer going to a retail store, there’s no guarantee that your desired product is going to be available. Unless you call ahead, you could end up spending the time and effort to travel to the store, only to find out that you can’t get the product you want.

In contrast, shopping at an eCommerce store makes it easy to see product availability. Some stores even show you how many items of that particular product are left, so you can make a decision as to the urgency of making a purchase decision. For example, if there’s only one product in the color/size/version you want, you’ll know you need to make the purchase immediately.

Choices And Options

Similarly to product availability, the availability of choices and options at a retail store is quite different from shopping at an eCommerce store. At a retail location, there might be a limited number of options due to the size of the showroom or the limited amount of inventory available. If shopping at a chain or franchise, the options may differ, depending on the size of the store.

Shopping online, of course, is a different story. Any and all options available can be listed online, no matter where the shopper is. Many consumers shop online specifically for this reason.

ecommerce sales

Ability to Shop

This difference between eCommerce and Retail is also obvious, but only once you think about it. With a retail establishment, consumers are restricted to shopping within store hours. This obviously limits the window for when shoppers can purchase and for when you can make sales.

With an eCommerce store, you have a huge advantage, as you can keep your store “open” 24/7. Not only can consumers purchase from you at whatever time is convenient for them, but they can also purchase on a moment’s notice whenever they happen to remember they need something. As a business owner, this leads to your consumers making far more “impulse buys” than if you were limited simply to store hours.

Attention

It’s impossible for a shopper to be in two retail stores at one time, but with eCommerce, any shopper can have multiple “tabs” and windows open, not only to do comparison shopping but to completely distract them. As a consumer, you’re a captive audience within a store until you physically remove yourself from it. And with eCommerce, you can make the decision to “leave” the shopping experience at a store in a split second.

Time

Driving to a store takes time. Walking through the aisles and finding a product inside of a store takes time. Getting the attention of a salesperson takes time. And now, with pandemic rules in place, you may have to wait outside the store simply to enter in the first place. This is all time that many shoppers do not have.

This is one of the main reasons eCommerce is on the rise. Open up your laptop or pull your phone out of your pocket and you’re effectively “in the store.” It doesn’t matter where you are. As long as you have internet or phone service, the commute time to the store is non-existent. There are no wait times, and many sites have an instant chat function to speak with a representative. And even then, finding answers on Google search is quite easy as well.

Amazon ecommerce store

eCommerce vs Retail: Differences for Business Owners

Now that we’ve discussed the differences between eCommerce and retail from a consumer perspective, let’s take a look at the differences for business owners.

ADS Channels for eCommerce and Retail

When it comes to advertising and marketing, the channels and mediums best served for driving consumers to eCommerce sites vs retail locations are quite different, yet there is some overlap.

For a retail store, traditional marketing tactics can be extremely effective, such as newspaper ads, magazine ads, billboards, direct mail, radio advertisements, and TV advertisements. On the digital side, locally-targeted Google ads and local SEO can also be extremely effective for targeting and driving potential customers to your physical location. Conversions can be difficult because your ad has to be compelling enough to get a customer to physically show up at your location.

On the eCommerce side of things, while some businesses do engage in some traditional marketing such as direct mail, the vast majority of marketing is done via Google ads, Facebook ads, influencer sponsored posts, and SEO (search engine optimization). Everything is designed to drive clicks since the gap between seeing an advertisement and actually shopping for products is a lot smaller for eCommerce than in retail.

digital marketing ecommerce

Analytics Possibilities

The possibilities for analytics are also quite different between eCommerce and retail. While there are still some useful options thanks to the latest POS (point of sale) technology, the advantage here clearly goes to eCommerce.

With retail stores, all analytics data would flow through a point of sale (POS) system. These electronic payment systems are replacing traditional cash registers and will give you access to sophisticated data and insights to help your business. You’ll be able to see metrics such as the average order amount, the average number of products purchased, the most popular products, gross margins, and more. But without a system like this, retailers are more or less in the dark when it comes to detailed analytics.

On the other hand, eCommerce businesses all have access to a wide array of analytics through whatever platform they use to process sales – whether it’s Shopify, BigCommerce, WooCommerce, Wix Payments, or Amazon. Not to mention, the analytics available when it comes to marketing through Facebook and Google Ads is incredibly robust as well. An eCommerce store has real-time detailed analytics on the impact of ad spends on clicks, conversions, overall purchase prices, and more so that business owners can quickly make adjustments, test new concepts, and double down on what’s working.

Local Market Impact

When it comes to local sales, this is where a physical retail store really shines, even with Google Ads and SEO. A large percentage – estimated at 46% – of ALL Google searches are looking for local information, and 88% of those consumers who do a local search visit or call a store within a day. For a retail business that optimizes their online presence or business listings to take advantage of local SEO, this can provide an enormous boost to business.

And of course, there are a tremendous amount of benefits to using more traditional marketing in your local area as a retail location. Increasing visibility in your local area by attending and participating in local events and getting involved in the community, collaborating with other local businesses, and even hosting local events at your business itself can help being local residents to your location. This is something an eCommerce store has a tough time doing.

That being said, it’s still beneficial for eCommerce businesses to target and market to specific local areas. For example, an eCommerce retailer selling camping equipment can target their online ad spend to specific geolocations where camping and hiking is popular, or even to cities that have popular campsites nearby. This can increase conversions and help business growth in a smart, targeted way.

With the coronavirus pandemic, another aspect that has impacted local markets is the increasing availability of curbside pickup. So many in-store-only purchases have been made available online, and then consumers are able to drive by a retail location and pick up their purchases. This is, in effect, a hybrid between the convenience of eCommerce with the instant gratification of in-store retail shopping.

Possibility For Growth

Every business has the possibility for growth, for the most part. But with a local retail store, there’s a limit to how many clients you can have in a store at once, and with limited hours there are only so many sales you can make in a day. You’re also limited, per location, to customers within a reasonable distance from your store.

Not so with eCommerce. In fact, there really is no limit for growth. You can sell your products to anyone, at any time, in any place around the country.

Investment Needed to Start

The built-in costs for starting a retail location can be pretty high, depending on the location. You obviously need to lease a space, and you’ll need to invest some money in designing the physical space itself. And, of course, you need the inventory up front to be able to sell it, and maybe even a warehouse or storeroom to store extra inventory you might not be able to put on display. Then you’ve got the costs associated with keeping the physical business running. Electricity, utilities, supplies for your staff and your customers, not to mention a sales staff to work at the physical location.

It’s a completely different story with setting up an eCommerce business. If you were setting up an eCommerce business from scratch, you’d first have to find a product or products to sell, but thanks to drop-shipping you won’t even need to have a physical product on hand. Then, all you’ll need is an eCommerce platform to use – Shopify, Magento, WooCommerce, BigCommerce, and PrestaShop are some of the most popular options available. Once you have your products chosen and platform set up, the remaining investment is in marketing your products and increasing visibility. This can certainly get expensive, but if you’re on a shoestring budget, setting up an eCommerce store is certainly a lot cheaper than a physical retail location.

That being said, setting up an eCommerce store certainly isn’t easy. It requires a clear vision, an understanding of the tools at your disposal, and most of all patience. From SEO to PPC, it can get complicated (and expensive) quickly if you don’t really know what you’re doing.

The Future of eCommerce

ecommerce digital marketing

If you’re wondering if eCommerce has a future, you probably haven’t been paying attention to the business landscape. Online shopping and eCommerce are on the rise, while retail has been experiencing its troubles, even before the pandemic.

ECommerce has certainly been growing, but is it reaching a plateau? It certainly doesn’t seem like it. In 2019, people spent $601.75 BILLION, up 14.9% 2018. After factoring out purchases not normally made online – such as gasoline, cars, and in-restaurant sales (also some of this is even going online now of course) – eCommerce accounts for 16% of all retail sales. How fast is eCommerce growing? In 2007, eCommerce only represented 5.6% of total retail purchases. To say eCommerce is growing rapidly is an understatement.

The coronavirus pandemic has accelerated the growth of eCommerce as well. In the first six months of 2020, consumer purchases online were up over 30% over the same period in 2019! That being said, online sales year-over-year growth did slow a bit in July, which is when many stay-at-home orders were lifted around the country. Nonetheless, eCommerce is continuing to get more popular and is showing no signs of stopping.

What’s driving this growth, outside of people’s changing behavior due to the coronavirus? Mobile devices are playing a huge role. In fact, BigCommerce reports that by 2021 mobile purchases are expected to account for 54% of total eCommerce sales. Quickly ordering a product on a mobile phone is just too convenient and quick of an option for many consumers to pass up, and many smart retailers are taking advantage of this fact on a daily basis.

Another major factor that will influence the future growth of eCommerce is voice. Voice search, while it’s certainly far from perfect and hasn’t been adopted by the masses yet, stands to see massive growth in the coming years. In fact, all the big tech players – Facebook, Google, Amazon, and Apple – are investing $750 trillion in spending over the next decade to research, develop, and improve voice recognition. Over the next few years, retailers and other business owners should expect that consumers will be looking to purchase via voice search more and more.

Should You Choose Retail Stores or eCommerce For Your Business?

Reading all of this, you’re probably wondering if you should stick with physical retail or shift your attention over to eCommerce.

Switching over to, or simply adding eCommerce to your business plan has a tremendous amount of benefits. As mentioned above, it’s certainly a growing trend and is showing no signs of slowing down. If your retail location took a hit during the pandemic, you need to decide whether or not you can rely on pure in-store sales despite the obvious shift in consumer behavior, or if you need to add eCommerce to your arsenal.

To summarize some of the many benefits of eCommerce, you can expect the following benefits from having an online sales platform:

  • Ability to sell to customers anywhere
  • Potential for rapid growth
  • Dramatically lower startup costs
  • Unlimited store hours (more or less)
  • The ability to educate and market in powerful ways
  • Scale up and down easily as needed
  • Customers can take their time to do their research at whatever time is convenient

And this is only a small slice of the benefits. We could go on forever.

On the other hand, there are benefits innate to in-store retail that simply can’t be replicated with eCommerce, including:

  • Building customer rapport and loyalty via in-person connections
  • No shipping drama or waiting for product
  • Consumers can inspect and try the product before purchase
  • Ability to put on public events
  • Some consumers simply prefer going in-store

So what do you do – focus on in-store retail or eCommerce? The short answer is that if you already have a physical location, these two types of sales do not need to be mutually exclusive. In fact, you can think of eCommerce simply as a type of retail. You have your brick and mortar stores as one point of sale, and your eCommerce platform as another.

In fact, if you organize your business right, these two seemingly polar-opposite businesses can actually support one another. Customer purchased at your store? Grab their email address in your POS device to send them marketing emails to entice them to purchase more from you online. Have a group of loyal online customers in your local area? Create a marketing campaign to drive customers to your store for special exclusive benefits and events. Your eCommerce website also serves as a place for customers to research your products so their shopping experience can be more efficient in your store. Customers are always going to want the ability to acquire their products instantly, no matter how much eCommerce continues to grow.

Conclusion

If you’re wondering how to get started in eCommerce, or maybe you started but are having problems both growing and integrating your online presence with your in-store presence, the experts at Comrade Digital Marketing can help you create, organize, integrate, and scale your online business in the most powerful ways possible. Our full-service agency can provide you with the guidance and tools to grow your revenue, optimize customer interaction, and prepare your business for the constantly shifting consumer landscape. Contact us now to find out how we can help. We’ll also gladly provide a full marketing audit, free of charge.

About the Author
Sasha Berson

Sasha Berson

Sasha serves as Managing Partner and VP of Client Solutions for Catapult Revenue, ensuring that all client’s revenue goals are met via Catapult’s marketing strategies.

Expert in: Marketing Strategy
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