Retail or E-tail? Buying Online vs. Buying in Person

Buying online vs. buying in person

When it comes to brick-and-mortar vs. e-commerce stores, business owners must recognize that each channel presents a fundamentally different buying experience. 

Buying online

Here are some important factors that characterize the online shopping experience:

• Customers use a computer or mobile device and must have a reliable internet connection. 
• Customers can’t see, smell, touch or try the product themselves.
• Customers rely heavily on the photos and descriptions the e-commerce store has posted on its website. 
• Customers can buy online from nearly anywhere but must wait for the seller to ship the item to them. 
• There is little or no human interaction during the entire buying process.

Buying in person

Shopping at a brick-and-mortar store involves different considerations:

• Customers must drive (or otherwise transport themselves) to the store, creating an inconvenience
• Customers can bring the products home immediately. 
• Customers experience the product and store environment with all of their senses – for example, by viewing demonstrations, tasting samples or trying products. 
• Customers can interact with sales staff and ask questions. 
• Customers can make shopping a social event with friends.  

Which products are typically bought in each channel? 

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. 

• Leveraging online sales: A branded product that consumers have probably bought before – and can find from 50 other retailers – may be more cost-efficient to sell online only, priced aggressively.
• Leveraging in-store sales: Proprietary or new-to-market products that consumers must see and feel in person to buy confidently may justify storefront real estate and inventory costs without deep discounts.
• Adopting an omnichannel strategy: Retailers also may adopt an omnichannel strategy. For example, they might sell products with significant sensory components, such as perfume or shoes, in-store to first-time buyers while also offering these products online for repurchases.

Pros and cons of offering in-person retail shopping

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. 

Pros of offering in-store shopping

When a retailer has an in-store buying option, the business and its customers enjoy the following benefits: 

• Customers can try on or test products in a store. Nothing truly takes the place of an in-person experience. A customer may want to sit on a sofa to see if it’s comfortable, try on clothes to see how they fit, or taste a wedding cake sample before ordering. Sampling is a highly effective strategy, particularly with younger consumers. An Advantage Solutions study of Gen Z consumers revealed that 70% said food samples are very influential, two-thirds are convinced by beauty samples, and 60% of young male buyers said beverage samples can sway a purchase.

• Retailers can boost sales through displays and promotions. Excellent retail store marketing tactics can include in-store sales displays and promotions, which can prompt impulse buys and first-time product purchases.
• Customers get instant gratification. There’s a reason people line up at the Apple Store when the company releases a new iPhone: They want to walk out with the phone in their hands and the ability to use it immediately.
• No shipping is necessary. Because the product is already in the store, no one has to worry about shipping times and costs or items getting lost in transit.
• Your sales staff can help customers. You can hire employees with great sales personalities to answer customer questions and make helpful suggestions. They can cross-sell and upsell to help increase sales and customer satisfaction. Human interaction is a plus for many customers, helping them feel connected to your business.
• You can create a community with in-store events. Having a location means customers can gather for events related to your product line, such as cooking classes for a kitchen goods store. These events can help you sell more products and create a stronger customer bond.

Cons of offering in-store shopping

There are also distinct disadvantages that come with a brick-and-mortar store: 

• Rent is expensive. If your store is somewhere with excellent foot traffic, rent can be costly. Many shopping centers charge a percentage of sales in addition to a fixed monthly rent. Other costs include utilities and security.
• Retail locations mean higher payroll costs. Unless you have a tiny store and you’re its only employee, you will have to budget for hourly employees or full-time staff. You’ll need to do payroll at specific intervals regardless of your total sales.
• You’re at the mercy of factors outside your control in a retail store. Because customers must travel to your store, your sales will be affected by the weather, parking availability, crowds and unforeseen occurrences, like a pandemic.
• Your display space and product selection are limited. There is only so much room in your store to display items, which will likely limit your product breadth. You’ll have to pay carrying costs if you have additional products in inventory.

Pros and cons of offering online e-commerce shopping

When you set up an online store, you create both benefits and drawbacks:

Pros of offering e-commerce shopping

Online retailers and their customers experience the following benefits: 

• E-commerce stores are available to nearly everyone. Almost everyone can access an e-commerce store, including those who face challenges with mobility, transportation and time. 
• There’s no pressure with e-commerce stores. With no salespeople, online shopping is a pressure-free environment without distractions or influences. 
• Online customers can access research and reviews. Many shoppers use the internet to research products before they buy. You’ll likely win additional business if your product has many good customer reviews and positive references in blogs and industry websites.
• E-commerce stores can offer a broad selection. Space on your e-commerce site is unlimited, so you can sell as many products as possible. Small businesses can afford massive online stores with dropshipping to eliminate inventory costs. 
• E-commerce stores are more immune to outside circumstances. With no crowds, hours of operation, weather or parking issues to contend with, shoppers can buy from you at their convenience. 

Cons of offering online shopping

Online storefronts also have some challenges: 

• Online stores require technical expertise. Although platforms such as Shopify try to make it easy for e-commerce merchants to set up online stores, you’ll still need some technical knowledge. If this isn’t your area, you’ll have to hire someone to set up and maintain your e-commerce store.
• Online stores can’t help customers as much. With no salespeople, it’s challenging to answer customer questions, make suggestions and upsell.
• Online stores must deal with shipping. Unless you have a digital product that customers can download, you’ll need a fulfillment operation to pack and ship products and incur shipping and coordination costs.
• Promotion and sampling are difficult or impossible online. Without a physical location, your promotion options are limited and sampling is nearly impossible.
• Some customers may be unable or unwilling to buy online. Some customers may not be comfortable or knowledgeable about buying online or may lack an acceptable online payment method.
• Online stores face more competition. With online shopping, your competitor is just a click away, whereas going to a competitor takes some effort for in-person shopping. Your online competition isn’t limited by geography, and the hotter competitive climate may push down prices and margins.

How brick-and-mortar stores and online shopping can go together

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: 

• Showcase in-store service. If customers come to a physical retail environment expecting personal attention, train customer-facing staff to give them a hands-on experience. 
• Emphasize online convenience. Customers who visit an e-commerce website may be driven by a desire to find what they need as quickly as possible. Deliver on this expectation by optimizing product copy to include frequently searched keywords. You can also offer expedited shipping options and let customers check out as a “guest” using their preferred payment form.
• Consider combining strategies. You can also combine your strategies by offering buy online, pick up in-store (BOPIS) or having in-store salespeople help customers facilitate online ordering for out-of-stock products. BOPIS is particularly popular, with 70% of U.S. consumers saying they prefer this method’s convenience, according to the National Retail Federation.

Tailor your online and offline efforts to meet customer needs

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.