COVID-19: Statement is fully operational. Read more.

Friday 19th August 2016

Online vs Offline Retail: Pros, Cons & an Omni-Channel Future

Tom Shackleton

Making a choice between selling online through an eCommerce store, and selling in a traditional bricks-and-mortar location can be incredibly difficult. Not only that, but it’s also one of the most important decisions your business will ever have to make. Whether you sell online or offline will change how you interact with customers, market your products and hire new employees.

So how do you choose? There are pros and cons to both which we’ve outlined below, so you’ll need to weigh these points up when making your decision.

One other thing to consider, you might not have to choose at all…

Online or Offline?

Online retail is continuing to grow at an astounding rate, yet the majority of people still actually prefer to shop in-store, so there are still great opportunities for retailers to take advantage of both. Which option you choose will depend on your business, the product you sell and how you want to interact with customers.

Pros of Online Retail

There are some fantastic benefits to selling online. Setting up an online store comes with significantly lower startup costs than a traditional physical store, with no need to pay for a large physical space and all of the ongoing costs that can entail. As a result, you can get started quickly, with less capital investment and start selling straight away.

Pros of Online

Customers also appreciate the convenience of eCommerce. Being able to shop from home without direct sales pressure, and with the ability to browse in your own time can make the process much more appealing to some customers. Then having products delivered straight to their door, within a few days and even at a time to suit the customer, can be even more attractive.

From a retailer’s point of view, being able to accurately track the customer’s interactions with your store across multiple different platforms gives you access to data that can elevate marketing efforts above anything a traditional store could manage.

Cons of Online Retail

While an online store can be quicker and simpler to set up than a physical one, not having a location can make it more costly to drive customers through to your store. You’ll have to accept that a larger marketing budget is required, compared to a bricks-and-mortar store. You’ll need to allocate more resources and time to marketing in order to let customers know you exist and are open for business.

It’s also more difficult to build meaningful interactions with your customers as there’s no face to face interaction. You’ll need to go the extra mile to give customers confidence in your store and assure them you’re a trustworthy brand.

Pros of Offline Retail

The advantages of offline retail are well cemented. It remains the most popular shopping channel for consumers and can’t currently be matched by online when it comes to customer experience. With a traditional bricks-and-mortar store, you can craft a unique experience for your customers and express your brand in a creative way.

Pros of Offline

Having an offline store also gives you instant access to passing trade, without having to invest in a marketing budget. Having a great store location can make you easily visible to your target market and can build your brand locally.

Even for an eCommerce retailer, having a physical store is a brilliant way to express a vision for your brand, sell an experience to your customers and reach new markets.

Cons of Offline Retail

Just as the pros of offline retail are well known, so are the cons when compared to eCommerce. Higher setup and running costs are very likely. Traditional stores generally have higher running costs than online retailers, with electricity, water, rent and more to pay for every month. This allows less room for error when it comes to your initial financial investment. With an offline store, you can see funding dry up very quickly if you’re not careful.

Also, just as location can be a virtue, it can also be a curse for some bricks-and-mortar stores. Not picking the correct location could seriously hamper your success, no matter how great your product offering is. You also have no control over what goes on around your store. A competitor could open next door and eat away at your business or the up-keep of the area might not be desirable and potential customers could move away.

Do You Have to Choose?

The choice between online and offline retail probably still isn’t simple, even after carefully assessing the pros and cons. But do you have to choose at all? There’s been a recent trend of not just traditional retailers opening eCommerce stores, but also online retailers investing in physical locations. So should you actually be operating both online and offline?

Blurring the Lines

The lines between online and offline retail are starting to blur. 85% of consumers want a unified experience across both. However, as it stands, only 30% are actually getting one. There is certainly an opportunity for retailers both online and offline to begin to meet this need.

Blurring the Lines

Technologies like iBeacons allow for digital interaction with customers in-store, offering them discounts depending on which products they’re looking at. Social networks like Facebook are even starting to be able to track customers across the digital world and into physical stores. Digital POS systems can now provide retailers with the customer data that eCommerce businesses have exclusively enjoyed for so long.

An Omni-Channel Future

The future is definitely omni-channel. Customers are interacting with retailers across many different platforms, both physical and digital. They expect a consistent experience across both. Whether it’s offering ‘click and collect’ for your eCommerce customers, or prompting customers to access more product information online, you need to meet customer expectations at every level, and multi-channel is the way to achieve this.

It’s also now far easier for online retailers to move into physical stores, and vice versa. As an eCommerce retailer, you could open a pop-up shop or get involved with local markets. As an offline retailer, you can start selling online through everything from eBay to Etsy for little or no cost.

In Summary…

Choosing between offline and online retail is still a challenge. However, perhaps the more pressing challenge for retailers is to evaluate how they can begin to create an omni-channel strategy and meet the changing expectations of consumers. It’s not feasible for every retailer at the moment, but it’s certainly something to think about.

Subscribe to our eCommerce newsletter