Last few months have been great for e-commerce business. With a growth rate of almost 15%, the US e-commerce market seems to be taking a new leap. The number of e-commerce portals has sprung by 150% over the year with more businesses selling exclusively online. Now, the scenario is exactly contradictory to the brick-and-mortar retail business. Retailers like GAP and Macy’s are closing their US stores one after the other and routing towards the online world. At the same time, online retail businesses like Fabletics and Birchbox have expanded their presence by extending their reach into physical stores.
So, what’s the point of this article?
Well, to begin with, the online retailers are going brick-and-mortar and vice versa. Hence, we will try to understand the pros and cons of doing so.
Online to Brick-and-mortar:
PROS -
- More exposure among the local reach.
- Those unaware of its online presence will be able to discover the brand.
- No hassles regarding the logistics of the products.
- Higher repeat value from the customers.
- Higher customer satisfaction ratio.
- Great move when considered from a long run implication.
- More dynamic reach as it potentially attracts people from all age groups.
CONS –
- Slower word of mouth publicity.
- The staffing and daily accounting are tedious.
- Higher incidences of theft/fraud.
- Overall maintenance is expensive.
- Results are indefinite, yet imperative.
- Needs a lot of initial investment/funding.
- Shackles the store with a long-term commitment even if the business fails.
Brick-and-mortar to online:
PROS –
- Will be quick in the expansion because of the growing e-commerce trend.
- Will have a rapid word of mouth publicity.
- The transactions will be more secure.
- The percentage of fraud/damage is comparatively lesser.
- Access to the customer will be direct and the issues will be resolved accordingly and immediately.
- The cost of running the business goes down tremendously.
- The conversion rate from advertisements is high.
CONS –
- The window period between the time of purchase and delivery is variable.
- Seasoned and trending products become out of stock soon.
- The exposure required to become a hit online may/may not be there.
- The popularity of the business may limit itself within a target audience.
- Brand name limits itself depending on the online presence and social reach.
- Trolling incidences.
The obvious conclusion of the points stated is that the transition will bring along its own share of roses and thorns. Also, the legal and business considerations vary depending on whether the retail is a start-up or an established brand. Any kind of switch in the medium or transition in its reach and availability is always crucial decision for any business. What matters here is whether or not this change may/will work in its favour.
So, what’s the point of this article?
Well, to begin with, the online retailers are going brick-and-mortar and vice versa. Hence, we will try to understand the pros and cons of doing so.
Online to Brick-and-mortar:
PROS -
- More exposure among the local reach.
- Those unaware of its online presence will be able to discover the brand.
- No hassles regarding the logistics of the products.
- Higher repeat value from the customers.
- Higher customer satisfaction ratio.
- Great move when considered from a long run implication.
- More dynamic reach as it potentially attracts people from all age groups.
CONS –
- Slower word of mouth publicity.
- The staffing and daily accounting are tedious.
- Higher incidences of theft/fraud.
- Overall maintenance is expensive.
- Results are indefinite, yet imperative.
- Needs a lot of initial investment/funding.
- Shackles the store with a long-term commitment even if the business fails.
Brick-and-mortar to online:
PROS –
- Will be quick in the expansion because of the growing e-commerce trend.
- Will have a rapid word of mouth publicity.
- The transactions will be more secure.
- The percentage of fraud/damage is comparatively lesser.
- Access to the customer will be direct and the issues will be resolved accordingly and immediately.
- The cost of running the business goes down tremendously.
- The conversion rate from advertisements is high.
CONS –
- The window period between the time of purchase and delivery is variable.
- Seasoned and trending products become out of stock soon.
- The exposure required to become a hit online may/may not be there.
- The popularity of the business may limit itself within a target audience.
- Brand name limits itself depending on the online presence and social reach.
- Trolling incidences.
The obvious conclusion of the points stated is that the transition will bring along its own share of roses and thorns. Also, the legal and business considerations vary depending on whether the retail is a start-up or an established brand. Any kind of switch in the medium or transition in its reach and availability is always crucial decision for any business. What matters here is whether or not this change may/will work in its favour.