Retail as an industry has seen a remarkable transformation over the years and while it's always been about connecting people with products, there's been a noticeable a shift in how people shop and sell. This change has been primarily driven by the growth of ecommerce.
Ecommerce, or electronic commerce, refers to the buying and selling of goods or services online. Brick-and-mortar stores are physical retail outlets which are visited in person to purchase products.
Whether you're an entrepreneur starting a new business or an industry observer keen on market trends, understanding the e-commerce vs brick-and-mortar debate is crucial for navigating the evolving landscape of retail both as a seller or consumer.
eCommerce vs brick and mortar: pros and cons
Each retail model has their own unique characteristics that shape the way they operate. E-commerce allows businesses to sell goods and services online — reaching a global audience without geographical limitations. Its also defined by the following:
Accessibility: Customers can shop anytime, anywhere as long as they have internet access.
Convenience: With just a few clicks, shoppers can complete a purchase and have items delivered to their doorstep within days, if an option.
Wide selection: Online stores often offer a broader range of products than physical stores due to fewer space constraints in terms of storage and warehousing.
Personalization: E-commerce platforms can provide personalized recommendations based on customer data and shopping habits. This makes for a more engaging customer experience and often higher sales.
Brick-and-mortar stores are traditional retail outlets that have been around for centuries, where customers can visit to see, touch and purchase products in person. Their key characteristics include:
Tangible experiences: Shoppers can physically interact with products before making a purchase.
Immediate gratification: Customers can take home their purchases immediately without waiting for delivery.
Customer service: Face-to-face interactions with staff can improve customer service and build relationships.
Local presence: Physical stores contribute to the local economy and community.
Origins and Growth of eCommerce
The story of e-commerce began in the late 20th century and it has quickly become a dominant force in the retail world. Here's a brief timeline highlighting its emergence and growth:
1970s: The concept of e-commerce was born with the advent of the Electronic Data Interchange (EDI) and teleshopping.
1980s: The introduction of online marketplaces like eBay and Amazon in the mid-1990s revolutionized the way people shop.
1990s: Secure online transactions became possible, leading to an increase in consumer trust and online sales.
2000s: Broadband internet became more accessible and smartphones began to change shopping habits.
2010s: Social media platforms started integrating shopping features, further expanding e-commerce reach.
2020s: Advancements in technology continue to push the boundaries of e-commerce with innovations like AI, AR and personalized shopping experiences.
eCommerce and brick-and-mortar: the main differences
When comparing e-commerce and brick-and-mortar, several key factors highlight their differences. Understanding these can help you decide which retail model aligns with your business goals or shopping preferences.
Convenience: E-commerce wins on convenience, offering shopping from the comfort of your home. Brick-and-mortar requires a physical trip to the store.
Reach: Online stores have a global reach, while physical stores are limited to their very specific, set geographical location.
Customer experience: Brick-and-mortar stores provide a sensory experience and personal interaction, which e-commerce tries to replicate with detailed product descriptions and customer reviews.
Overhead costs: E-commerce generally has lower overhead costs than brick-and-mortar, which must contend with expenses like rent and utilities.
Is eCommerce killing brick-and-mortar?
The question of whether e-commerce is killing brick-and-mortar stores is a hot topic. To address this, let's look at a few current trends and ecommerce statistics.
Adaptation: Many brick-and-mortar stores are integrating e-commerce elements to stay competitive. Many businesses are choosing to have both an ecommerce website and physical store — it's common amongst large brands, for example; Zara, H&M.
Coexistence: Statistics show that while e-commerce is growing, there's still a significant demand for in-store experiences. A CX trends survey, for example, found that 70% of US shoppers still visit a physical retail store once a week.
Digital Transformation: Traditional stores are undergoing digital transformation, using technology to enhance the in-store experience.
So maybe it's not so much a case of e-commerce killing brick-and-mortar but rather an evolution of retail where both can coexist and complement each other. The key for traditional stores is to adapt and find ways to leverage the strengths of both models.
Hybrid retail models: successes and how they work
Here are some examples of businesses that have thrived by integrating both e-commerce and brick-and-mortar elements into their business models:
Click-and-collect services: Retailers like Target and Walmart have successfully implemented click-and-collect services, allowing customers to order online and pick up in-store. This means consumers don't have to make it into a store and line up to pay — they can order only what they want and pick it up quickly.
Show-rooming: Companies like Warby Parker offer physical showrooms for customers to try products before ordering them online.
Local pop-up shops: Online-first brands occasionally open pop-up shops in high-traffic areas to increase brand visibility and offer a tangible shopping experience. This helps drum up demand for their online stores.
The rise of omnichannel retail
Omnichannel retail is the seamless integration of online and offline shopping experiences. It's a strategy that acknowledges the value of both e-commerce and brick-and-mortar, aiming to give you the best of both worlds. Here's how it benefits businesses and customers:
Enhanced customer experience: Provide a consistent shopping experience across all platforms, whether in-store, online or through mobile apps.
Increased sales opportunities: Reach customers through multiple channels, increasing the likelihood of purchases.
Better data collection: Gather insights from various sales touchpoints to understand customer behavior and preferences.
How businesses can adapt to an evolving retail environment
The retail landscape is constantly shifting and businesses must adapt to stay ahead. Here are strategies for brick-and-mortar stores to incorporate e-commerce elements and vice versa:
Brick and mortar stores
Create a website: Create a user-friendly website or join online marketplaces to reach more customers.
I built our website in less than a week. Prior to Strathcona Spirits, I worked in eCommerce and online communications, so I knew what I wanted. I didn’t want an eCommerce site that was clunky and difficult to update, where the smallest change required a developer. This was a lean startup so we wanted to have a website that we could easily update ourselves, or delegate to an employee to update, in a really simple and time-efficient way. So that's how I decided on Wix.
Andrea Shubert, Co-founder of Strathcona Spirits
Use social media: Engage with customers on social media platforms to drive traffic to both your physical and online stores.
Offer online ordering with in-store pickup: Combine the convenience of online shopping with the immediacy of in-store pickup.
eCommerce businesses
Optimize for mobile shopping: Ensure your online store is mobile-friendly, as many consumers shop on their smartphones.
Consider physical touchpoints: Explore pop-up shops or partnerships with physical stores to create a tangible brand presence.
Leverage local delivery services: Provide fast, local delivery options to compete with the instant gratification of in-store shopping.