September 24, 2015

Why Online Retailers Should Want to Open Brick-And-Mortar Stores and Vice Versa


There’s no denying that the future of retail is online. But at the same time, it’s hard to ignore the fact that online retailers who are successful like to have brick-and-mortar stores as well to compliment their virtual stores.

If you need proof of this, look no further than to the fact that the world’s largest online retailer, Amazon, has recently opened up a brick-and-mortar location in the middle of Manhattan.

These so-called “omni-channel” retail strategies are more and more prevalent as the retail industry continues to grow. The simple truth is that while online shops have their own advantages, having a physical storefront has just as many.

Let’s take a look at the advantages of both in order to understand why it should be every retailer’s goal to own and operate both an online and physical store.

The Advantages of Physical Storefronts

While online retail is certainly a surging business, old habits are hard to break. A majority of American consumers still prefer to do their shopping in a physical store.

According to U.S. Census Bureau statistics from 2013, 94% of retail sales were conducted in physical stores and the average person spends six times more money in-store than online.

And here’s why.

Don’t Just See the Product – Feel It Too

It does depend on what type of products you sell, but generally speaking, people like to hold, feel, and see products in person before buying them. Of course, this might not be that important if you are selling office supplies or electronics, but for most products, being able to hold it in your hand is something that consumers want to be able to do before deciding whether or not they want to buy it.

Physical shopping centers allow people to interact with the products – try on shoes and dresses and see how they look in person, feel how a guitar fits in their hands before committing to buying it, and so on.

The ability to interact with the product enables consumers to confirm their desire for the product and dismiss any doubts they had about how it looks online.

Improve Logistics – Ship Faster and More Efficiently

Physical stores are not just showrooms for your products, they can be much more than that. They are business space. That means that you can not only use them for showcasing your products and interacting with your customers, you can also use them as storage and as shipping centers.

So if you are an online retailer, opening several physical stores around the country would give you several warehouses at different locations from where you can potentially ship your products.

This helps you to not only reduce the cost of shipping, but the time it takes for your item to reach the customer as well. That’s a win not only for your wallet but for your reputation as well.

Make Customer Service More Direct and Personal

The more direct your customer service is, the better it is.

Think about this scenario. If you bought a pair of jeans that don’t really fit you that well and you would like to return them, would you rather just drive to the store, return them and grab some replacement jeans, or would you rather pack the jeans, go to the post office, send them out, wait for your refund and then purchase another pair of jeans and potentially encounter the same problems over again?

The first option is obviously a lot more convenient and effective. Not only that, but when your customer comes to your store to make a return, they will undoubtedly be browsing again, which is something that doesn’t happen every time when you are returning items remotely to online vendors.

Engage Your Customers With Your Brand and Culture

Truthfully, providing a meaningful and engaging brand experience and connecting with your customers is a much easier feat to accomplish in person than online. Having a physical store gives you that personal touch of interaction that shopping from one’s laptop or mobile phone cannot provide.

That’s why even huge online retailers want to open up physical stores, because it makes it easier for them to create lasting customer relationships built on trust and familiarity.

The Advantages of Online Shopping

The biggest and truest advantage of shopping online can really be summed up in just one word – convenience. It is not only more convenient for retailers to sell online, it is also more convenient for customers to buy from their personal computers or phones.

If you want to buy jeans from Japan, you don’t have to buy a round-trip ticket to Tokyo in order to purchase them. And if you want to sell a book to someone on the other side of town, you don’t have to walk around like a door-to-door salesman in order to do so.

But there’s more.

Spend a Lot Less Money

Obviously, the cost factor for opening up and running a brick-and-mortar business is an obvious hurdle. Not every online retailer is successful enough to open a huge physical store in New York City like Amazon.

No matter how big or small your online business is, opening a physical store is going to demand a lot more money than running an online shop costs you. You need many more employees, display shelves and racks, lighting, furniture, and tons of other things – things you don’t need when selling your wares exclusively online.

Run and Manage Your Store More Easily

As mentioned previously, opening a physical shop not only involves a lot more money, it also requires you to increase the size of your team. It can actually seem like you are running two completely separate businesses at the same time at first.

Sure, your profits will most likely increase, but so will the amount of time and effort that will have to dedicate to your business. Not only are you juggling many more responsibilities, you are working with more people.

Even if your shop is a small one, you are still going to need someone to work in it. And once the business picks up and grows, you are going to need someone to manage that team or take over your responsibilities on the online front if you choose to dedicate yourself more to the physical store.

Most examples show that this is a model that does yield results, but making the adjustment and finding a way to effectively manage both your online and brick-and-mortar is unavoidably going to take a lot of work.

Make Shopping Much Simpler and Faster

We’ve mentioned this before and it bears repeating – online shopping is incredibly convenient. It might not be a majority of the consumer population, but there are a great number of people for whom this convenience trumps most of the benefits of shopping in-store. These are potential customers that should not be neglected.

At the same time, the value that comes with shopping in person isn’t equal for every type of product. Take for example Staples, the office supply superstore. Last year, they closed 255 stores and expanded their online operation.

That’s because buying pens, paper and staplers is not the same as buying new shoes. These types of products do not demand the same type of interaction with consumers before purchase.

This is why every brick-and-mortar store really needs to evaluate their inventory and see which items would benefit most from being sold online.

Provide a More Social Experience

All you need to do is spend a couple hours browsing Pinterest to see how social media is affecting retail. In fact, the website decided last month to introduce a “buy button” to their pinned items. Pinterest users share items that they love and that they want to buy constantly. Now they have linked retailers to these pictures and have basically become an online shopping catalog.

That’s just one example. The process of shopping online is a lot more social than buying in-store. Sure, there are people who shop with friends to get opinions on items, but online shopping is a whole different story. Sites like Amazon have huge databases of user comments and recommendations for just about every item they sell.

When you buy something online, it’s much easier to share your opinions about it and tell people about the item than it is when you’re buying in-store. This presents a whole new world of both interaction and lead generation for companies that are able to sell on the Internet.


The future of retail is going to be incredibly interesting to watch as it develops over the next years. But one thing’s for certain: Retail is headed towards diversification.

It has been seen that online stores and brick-and-mortar shops compliment each other more than they act as competition for one another. And that is why companies who are able to offer both options will end up seeing more sales and more success in the long run.