5 Things to Consider When Deciding Between E-Commerce and Brick-and-Mortar Stores

Rutgers University predicts that global retail sales will reach 28.3 trillion by the end of 2018, with only $483 million of that spent online. Despite the ease that online shopping has brought to the retail world, research continues to show that customers are still craving the tactile experience of retail shopping.

No matter what industry you have decided to delve into, starting a business is never easy. Whether you are deciding between a brick-and-mortar retail store or an e-commerce platform (or both), you need to review all the details before making a decision. Here are the top five factors to consider when deciding between a retail store and an e-commerce platform.

Competition

Starting a business in a market that has little to no competition is ideal but not always a good sign. If there is a lack of competition, it may come from barriers in the way of entering the market — or the lack of a market. Make sure to familiarize yourself with the potential competition and the failures they have seen. Since e-commerce businesses can be so competitive due to their sheer reachability, preying on the failures of your competitors can help you keep a leg up with your business.

If you are opening a brick-and-mortar store, other businesses in your location can help or hurt your own. Determine if the businesses nearby a potential store site are compatible with your store. For example, if you are opening a high-end fashion boutique, it may not be very successful next to a thrift store. Make sure to consider the proximity of the competition when choosing a brick-and-mortar site.

Audience

Identifying your target market is important no matter what platform you choose to sell through. There are some distinct differences between people who prefer online shopping versus in-store shopping, so make sure that your target audience will fit in line with your business plans.

The preferences of your target market are what matter. Most marketing platforms available today can help you identify a concrete target market which helps you focus your e-commerce marketing efforts. If you choose to conduct business strictly on an e-commerce platform, make sure that you are using website software that tracks the traffic to your page and retarget ads to your identified audience.

If you choose a physical retail store, be sure to assess the local market before building or signing a contract. If the store you choose to operate is niche, then the traits of the local market can play a key role in your businesses success. The average age of your target audience is important to consider since there are very distinct buying differences across the many age groups. If you want your brand to be a trendsetting endeavor, make sure that you open a brick-and-mortar store closer to the generation you are tending to. If you don’t have enough customers to match the characteristics or your target market, then your business won’t thrive.    

Access

The access that your consumers have to your business is everything. If you are choosing to have a brick-and-mortar, aim for an area that has highway access or easy transportation options like trains, subways, or bus routes so your customers can actually access your store.

Create a space that attracts customers. Many people who purchase goods are not necessarily searching for them, just browsing. So being in close proximity with multiple compatible retail stores gives you a higher chance of customers walking in and impulse shopping in your store.

For online-only businesses make sure that you have created the perfect e-commerce website before offering it up to the masses. Your website should be easily accessible to customers with decent loading speeds and good updated visual content available.

The safety of your site is as important as its usability, so make sure that you are safeguarding access to the data that comes along with an e-commerce platform. You want checkouts to be accessible for the consumer but not to hackers. By protecting your online platform, you protect your business and its income.

Inventory

Regardless of whether you are operating online or at a physical retail store, you need to come up with concrete numbers when dealing with inventory. Since there is no way to know for sure how many products are going to sell at first, you may need to use a rough estimate. The trick to ordering inventory is to make sure not to order too much or order too little.

Too many items and you run the risk of having to store unsold items, costing you funds that are most likely better spent somewhere else. If you order too few items, you may gain a negative reputation by always being out of valued product. Considering the concerns you may have with inventory now will help you prevent investment loss in the long run.  

Incentives

If you own a company the purpose of incentives is valuable to you. Affiliate marketing allows both the shoppers and the seller to profit when businesses team up with online brand ambassadors. By using an umbrella incentive program, you can run and keep track of your affiliate marketing all in one place. Typically this incentive involves committing a percentage of profits to an ambassador in exchange for an increase in overall company sales.The chosen person receives a personalized discount code that they then share on their online platforms, and their customers bring it back to your site.

Offering up traditional sales are not getting people in the door these days, so businesses are looking at incentives to drive their profits. Deep discounts or digital coupons delivered through location-based technology is one way to use incentives in a retail space. By offering deep discounts and free or add-on items, you can bring more individuals to your brick-and-mortar store, thus increasing your overall chances of making a sale.

The success of your business depends on how you chose to present it to the world. An e-commerce platform can help to expand the reach of your brand far beyond the walls of a brick-and-mortar retail store, but only if you market it correctly. A retail space can bring strength to your overall presence in the business world.

Whether you are still in the deciding stages of building your business or you are ready to take the plunge, considering if a physical location or an e-commerce based company is important to the foundation of your company. Implementing your organization appropriately across the correct platforms is essential to your success.