A recent article published on Forbes.com by Lisa Arthur claims that online retail sales are growing at approximately 10 times the rate of brick and mortar. This has resulted in retailers flocking to get their online share of the retail industry. Like never before, people are opening shops online for all kind of items; food items, electronic and digital products, cleaning and washing items, clothing and footwear, auto parts, accessories and so on.
So far so good; despite the growing number of people jumping at the online retail industry to grab their share what that needs to be debated is what is best for you in case you have decided to open a retail store: online or offline.
To start off we will look at the cost of opening a retail storefront as compared to an online one. Generally it costs less to open an online store as compared to opening a brick mortar storefront. You don’t have to pay any rent or utility bills for your store. You will not incur any costs decorating your store and buying signage etc. You need not hire additional staff as in the case of a physical staff. All you have to pay is for your domain name, website hosting and any other web related services.
A retail store front can do better for luxury or high price items, for example; cars, jewelry, antiques etc where the buyer will physically want to see and feel the item before making the decision to purchase. For these items a retail front could appeal more to buyers and hence more profit can be generated on single item sales. With an online store you can have a more extensive selection of categories on your to sell, and can keep costs lower by passing on savings in overheads and other offline shop front expenses to your customers.
The target market with a retail storefront can be quite limited, and can make marketing efforts more difficult outside your local area, while the opportunities for marketing an online store are vast. This is because in the case of a traditional brick and mortar store your marketing is only limited to your local area, and online, you can pretty much advertise anywhere in the world and reach new customers in the comfort of their own homes.
With an online store, your horizons expand considerably. With the traditional store you are confined to the space that you have rented. You cannot change how your store looks every day. It is too costly to rebrand your store once it is done; but with an online store you can do that in minutes with the click of a mouse. However, one point to note here is that the customer loyalty with your offline store is stronger as compared to an offline one. These real life connections can be more beneficial to your business as opposed to email lists!
Finally, the competition! With an online store you will be faced with huge competition for virtually any items that you want to sell because when you decide to sell some item(s) online probably there are a dozen companies out there selling the same and they are well established!
On the other hand with an offline retail storefront you can carry out full research and due diligence and set up your business in a place where competition is lower and the footfall supports your requirements.
With tablets and smartphones making their way into our lives very fast, consumer behavior is changing unpredictably. Whether it is a leap into online retailing or an extension of a physical store on the internet retailers must respond to the change!
If you are planning your first store, take time to consider the pros and cons of online or offline commerce. Make sure you have mapped out the costs considerably and are sure you have taken into consideration the costs of opening before you go live!
In case you have decided on setting up a brick and mortar store you will certainly want to keep expenses to the minimum. You can cut expenses by lowering your marketing budget and making use of all the free of cost resources available out there on the internet. As a brick and mortar shop you yourself are obviously not tied to other brick and mortar shops for basic necessities such as shop fittings. Shop around online and cut down those costs yourself, impress your customer afterwards with a grand storefront and with the right mix of tactics you might even need a line of barrier ropes to guide the masses.