Brick & Mortar vs. eCommerce: Which One is Right For Your Business?

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When it comes to business in the 21st century, the internet seems like the place to be. Online stores are growing in scope and popularity, and several industries that were once considered infallible, such as print media, have diminished their scope or have gone digital. For many, the move made a lot of sense. After all, the internet opens your doors to a wider audience, which can only benefit you, right? In actuality, it’s not that simple. Whether you’re a New York publishing powerhouse, a Portland bakery, or a Los Angeles van rental company, you will be hard-pressed to find an easy answer to the “retail or e-tail” debate.

In my time working with startup companies, I’ve seen businesses take off and flourish thanks to their online presence. I’ve also seen marketing teams spinning their wheels, wasting time and resources in an environment that simply doesn’t suit them. But how do you know which side your business is on? To determine your place, you’ll need to look at the pros and cons of both types of store.

Brick & Mortar: The Pros

While brick & mortar stores may seem like the old dinosaurs of the retail industry, they still provide that tactile, qualitative customer service experience that many people still appreciate when they’re making purchasing decisions.

A 2013 survey in the U.K. found that the average consumer spends 61 percent of their shopping time in a brick & mortar store. Additionally, 40 percent of these customers spent more time than they’d planned in the store, compared to online 25 percent while shopping online. This extra time could potentially lead to larger sales, which in turn spells higher profits for business owners.

Brick & Mortar: The Cons

The most obvious drawback of a brick & mortar store lies with the number of shoppers you have to sell to. 4.79 billion people use the internet across the globe, and with an online shop, they’re all viable customers. However, if you stick with a physical store, your customer base will be limited to locals and occasional visitors in your area. Of course, many business owners make a fine living working within their local community, but for others, the pool may not be big enough.

For many small businesses, the cost of renting or leasing space may be a major deterrent for a brick & mortar store. The average cost to rent office space in the U.S. is $23.23 per square foot, and that can add up quickly, making it difficult to keep the store open. For this reason, some small businesses and startups may actually be better off in the digital realm until they’ve earned enough revenue to afford a storefront.

eCommerce: The Pros

The pros of eCommerce align pretty closely with the cons of a physical store: launching a website is cheap with a variety of good e-commerce platforms to choose from, and your business’ product or service has the potential to be seen by billions of eyes. But these are not the only benefits to an online business.  First, eCommerce allows for flexibility. Changing prices, announcing sales, or even changing your brand aesthetic is as simple as a few keystrokes and mouse clicks. This is perfect for young businesses that are finding their footing and their niche.

Additionally, eCommerce has the benefit of being new, exciting, and accessible to young people (aka the key consumers for many industries). eCommerce is growing, too. It’s currently grabbed hold of about five percent of the retail market – no slouch for the new kid on the block.

eCommerce: The Cons

The biggest con plaguing eCommerce is, ironically, also its biggest pro: the enormous size of its consumer base. Shipping costs can be astronomical for online retailers, particularly those who opt to service customers abroad. Even eCommerce giants like Amazon, who have the capital and the manpower to process orders promptly, struggle to meet the demands of their customers in a way that is fast and cost-efficient.

Another major con is the customer’s inability to experience a product before purchasing. We’ve all had an experience when an online order didn’t turn out as we’d hoped. Unfortunately, these experiences leave online shoppers wary, which can make it difficult for small businesses to close new sales.

Still, the question remains: which type of store is best for your business? This will depend on what you are selling, who your target market is, and what resources you have to invest in your shop. However, with careful consideration, the right choices and strategies can take your business to the next level.

You may also like: Is your Retail Business Ready for the Future?

About the Author

Carl Turner has worked as a consultant in the startup world for the past 20 years. He is dedicated to helping entrepreneurs make their business dreams a reality, and he’s done so for countless clients all over the United States. When he’s not flying to meet with his newest client, he lives the normal family life at his home in Los Angeles, California.

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