Since the start of E-Commerce prospects, there has been a never-ending debate between retail brick-and-mortar and online sales. You cannot answer the argument simply by observing the behavior of a retail customer.
To start a business, you must decide whether to launch a physical store or consider E-commerce. In some cases, you can use both. But how do you determine which option is better for you, as both industries are massive? While in-person shopping is still preferred, online shopping has grown three times faster.
But what makes both these options stand out from each other?
Let us look at some key differences and statistics with the pros and cons of running both.
Key Difference
The first key difference between these two business options is the location. E-commerce stores host their businesses online, so customers can shop from anywhere. However, customers cannot touch a product and must see it through videos or pictures. Online sales have a better reach, as they cover a larger geographical area. Another added benefit for shoppers in online sales is that they avoid the hassle of going all the way to a store and back. Online is the best option for shoppers who do not want to do in-person shopping.
Brick-and-mortar retailers have a physical location to sell their products, and customers can see them in person. For in-person shopping, the customer must travel to that location personally. The experience of physical store shopping is entirely different from that of E-commerce shopping. Physical stores have storage spaces and do not need a shipping fee for delivery. Customers can decide whether to buy a product after having a close look. Businesses located physically can cater only to a particular area or locality.
Online Shopping vs. In-store Statistics
There is a lot to consider when comparing both these business options. Research has helped us provide valuable statistics for both parts of the retail industry. Some significant numbers include:
- The consumer spent $861.02 billion in 2020 on online shopping, an incredible jump of 44% since 2019. Retail stores increased to $4.04 trillion, a 6.9% increase from last year.
- 67% of Millennials report a preference for e-commerce or online shopping.
- More than 55% reported visiting a store before making an online purchase decision.
- Online spending among men is 30% higher than women.
- 35% of adults shop using their smartphones
- 40% of consumers prefer online shopping to save their time.
- More than 5,500 brick-and-mortar stores closed down, and are expected to rise in coming years
- Online sales have grown by 300% since 2001.
Preferences of Both These Options
The customers you hope to attract will be a significant factor in choosing your business model. Here are some primary reasons for customers to consider their preferences.
Preferences for E-commerce or Online Sales
- They can buy from an online store anywhere and anytime
- Price matching is more accessible in online stores
- Online sales are more convenient for customers
- They do not have to wait in lines, and the service is faster
- Items are easier to find and more readily available online
- The free shipping option makes online sales more attractive
Preference for Brick-and-Mortar Stores
- Customers can physically interact with the products to make purchase decisions easier
- They do not have to wait for the product shipment if they buy in person
- They can speak personally to a customer service representative rather than online
- There are no shipping costs associated with in-store shopping
- Easy returning policy
- The experience of in-person shopping is more interactive
Why do Brick-and-Mortar Still Matter?
61% of customers still shop in physical stores, whereas 31% prefer online shopping. One of the most fundamental drivers of online shopping is the interaction and personal experience that a customer receives. Brick-and-mortar stores will continue to make their mark until e-commerce can find a solution for same-day or 1-day delivery.
Another massive point for brick-and-mortar stores is that shoppers have a 40% chance of spending more when shopping in-store. At the same time, the likelihood of extra spending in the online store is only 25%.
Which is Better?
E-commerce is a rapidly growing market, but the physical store will still dominate until the Internet can provide the benefits of in-store shopping.
On the other hand, in-store shopping needs to evolve its experience to compete with the convenience of online stores. The biggest test for brands is creating an experience that incorporates online and in-person shopping.
Both these options are helpful in their own way. The choice lies in the customer’s decision and preferences.
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