Brick and Mortar vs Ecommerce – Can One Win?

Sep 6, 2019145
Brick and Mortar vs Ecommerce – Can One Win?

Today, many people stake claims that brick and mortar retail era is nearly over. The digital breakthrough pushes people towards technological solutions in shopping. However, this statement is not entirely fair. Find out here why major brick and mortars go for ecommerce websites, and what is the deal with the ecommerce-only companies going for physical stores.

Table of contents:

What is Brick and Mortar Retail?
Why do Merchants Integrate Brick and Mortar Stores with Ecommerce?
What Brick and Mortar Stores Move to Ecommerce?
Why do Ecommerce Businesses Open Brick and Mortar Stores?
What Online Retailers Open Brick and Mortar Stores?
How to Turn Brick and Mortar into Ecommerce?
Why does the Future Belong to Omnichannel Stores?

What is Brick and Mortar Retail?

Brick and mortar is a business or retailer that has at least one physical location [1]. Typically, it is a traditional street-side business that serves the customers face-to-face. For example, regular small stores that anyone can find in a local shopping mall are brick and mortars. Usually, this term is used as an opposition to ecommerce.

An excellent example of a successful brick and mortar-only store is Starbucks. In 2017, the company officially closed its online store. This decision may seem strange when most of the businesses try to increase their digital presence by all means, but Starbucks isn’t like most of the businesses. Starbucks operates over 30,000 locations around the world, and you are rarely really far from one of them. Shutting down the online store, the company has decided to place a bet on a unique in-store experience.

Starbucks Ecommerce vs Brick and Mortar

Why do Merchants Integrate Brick and Mortar Stores with Ecommerce?

The growth projections show that ecommerce market share is increasing at an ever-accelerating rate. It is already getting more difficult for brick and mortar stores to compete with such online giants as Amazon or eBay. In 2018, traditional brick-and-mortar retailers closed approximately 7,000 stores [2]. It already rings the alarm bell for the merchants that that sooner or later offline-only stores will take a back seat in retailing, paving the way to multichannel stores and ecommerce.

Ecommerce, in general, is more flexible than brick and mortar and usually has lower operating costs for business owners. For the customers, it also has a lot to offer – a time-saving, more extensive range of products, same-day delivery, and many other advantages.

Number of online shoppers worldwide

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What retailers should go online faster than the others?

The retailers working with specific product groups should consider going online faster than the others.

After Netflix has revolutionized our approach to watching movies, it became close to impossible for the companies selling movies to make money offline. Every year the ecommerce share in this field enjoys a substantial growth.

Books are also a popular item to order online. There are many people who enjoy the experience of shopping in a bookstore, but the number of online book orders is growing every year. It is much easier to look for the necessary book online and have it delivered within a couple of days than wander through the shelves to find some rare author.

Electronics is also ordered online more and more often. In online stores, it is much easier to compare the prices and as well as device characteristics than in brick and mortar stores. Also, the customer is able to read the reviews and recommendations from people who have purchased the item before.

Ecommerce vs Brick and Mortar

What Brick and Mortar Stores Move to Ecommerce?

Blaha Gartenmöbel

Blaha Gartenmöbel is an Austrian-based company selling outdoor furniture and the largest brick and mortar store in Europe. Founded back in 1950, the company is now one of the industry leaders with years of rewarding experience under the belt.

Modern garden furniture, umbrellas, grills, dining sets, and many other items are available for the customers in their impressive store with an area of 10,000 m2. Like many other modern well-established businesses, Blaha Gartenmöbel did not want to deny their customers an opportunity to get their furniture delivered.

Ecommerce vs Brick and Mortar

Boodles

Boodles is the only family-owned jewelry business on Bond Street. In 1798, the Kirk family established this brand in Liverpool. Today, it is a flourishing international company with a true passion for what they do. One family has operated Boodles for over 200 years. They knew from the early beginning how important it is to keep up with the times. Holding to the old-school values, Boodles remains open to innovations. The brand’s website was created long after their brick and mortar store was born. Today, it generates a big chunk of profit selling Boodles jewelry internationally.

boodles store ecommerce vs brick and mortar

Shiekh Shoes

Shiekh Shoes is an American company selling urban and sports shoes from top brands like Nike, Adidas, Timberland, and others. The company started back in 1991 with opening multiple brick and mortar stores in the shopping malls all over California. Over the years, it has earned the name of one of the major shoe retailers. Placing service to the forefront, Shiekh Shoes launched a website that offers international delivery and allows their non-American customers to order their high-quality products too.

Shiekh Shoes Ecommerce vs Brick and Mortar

Girard Sudron

Girard Sudron is a French company that was launched 125 years ago in Paris by a lighting industry enthusiast Henri Girard. The company has come a long way to become what it is today – one of the most respected and well-known companies operating in this market. Since its foundation day, Girard Sudron was discovering new innovative lighting solutions. Besides lamps and accessories, the company offers a unique approach to energy saving.

girard-sudron Ecommerce vs Brick and Mortar

Why do Ecommerce Businesses Open Brick and Mortar Stores?

Despite the hype around online shopping, 85% of people worldwide still prefer shopping in physical stores [2]. Besides the product itself, such stores offer shopping experience and valued-by-many opportunity to touch or try on the item before purchasing.

Today, Generation Z is claimed to spend more time in shopping malls than one would expect from digital natives. Some people suppose Generation Z will keep offline retailers afloat since three-quarters of them say shopping in-store is a better experience than online shopping [4]. But if we keep in mind that they are still young – the oldest Generation Z representative is currently 24 years old – it may be the case that they simply have more time to spend in offline stores. Once most of them start working full-time and create families, Gen Zes are likely to take advantage of online shopping more often. They use technological devices from a young age and have more trust in technology than any other generation before.

Besides all the talks about dying brick and mortar, in 2019, many online-only retailers are planning to open physical stores. It is the place where they can be truly creative not being limited by website technical capabilities. Increasing their physical presence, they reach out to those who are not digitally active. Also, having an offline store makes companies stand out among the competitors who are not funded well enough to do the same.

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What products are not expected to bring more money online yet?

There are a few spheres that will not generate more money online yet. People are not ready to trust health and personal care products in the hands of ecommerce. Most of the customers find it easier to stop by a local drug store to pick a cream or shampoo that they need than to order it online.

High-end retailers are expected to keep their offline customers too. The percent of online sales compared to the overall sales within this category is pretty low. Usually, paying a higher price for an item, people expect personal service, which they cannot get when buying online.

Furniture is another item which is rarely purchased online. Most of the people prefer to get the full experience of shopping for furniture and home accessories trying out the couches and beds in-store.

What Online Retailers Open Brick and Mortar Stores?

Amazon

In 2017, Amazon announced they plan to open 3,000 physical stores all over the US by the end of 2021 [5]. Currently, the stores have 18 locations in New York City, San Francisco, Seattle, and Chicago. Amazon Go stores are the new attempt of the company to start selling and delivering groceries successfully. Their previous try – Amazon Fresh – did not reach the expected popularity level, and has been losing money every day since the day it was launched. Now, they want this grocery delivery to work in cooperation with the physical stores to ensure freshness and fast service.

Amazon introduced a new concept of brick and mortar in their Amazon Go offline stores – “Just Walk Out.” To use this technology, you first need to install an app and register, and then you can freely go to the Amazon Go store, pick out the groceries that you want to purchase and leave. Soon, you will get an email receipt with all the information about your purchase and the total amount. So far, the reviews have been highly positive, and people who went to Amazon Go, claim that the system is perfectly functional. Recently, the company has also announced that in some of the stores, people will be able to pay not only via the app but with cash as well.

Alibaba

Chinese online giant Alibaba has also decided to try out brick and mortar. In 2017, the company introduced the project of new innovative supermarkets. And to date, they have over 65+ stores throughout China. Similar to Amazon, Alibaba offline shopping requires app installation. They promote their supermarkets as superstores full of digital technologies with robotic consultants and innovative payment methods. Besides the grocery stores, Alibaba also introduces new restaurants where robots entirely replace the waiters, and all the order are managed through the app only.

Casper

Casper is an American company selling mattresses, pillows, and bed frames. It was founded five years ago as an ecommerce-only store. Casper has mastered selling sleep-related products online and recently announced that in the next three years, they are planning to open 200 physical stores all over the US.

Adore Me

Adore Me is a women’s lingerie retailer based in New York City. The company was launched back in 2011 as ecommerce-only, and after eight years Adore Me has announced that it is time for them to go offline. In the next five years, they are planning to open 300 physical stores in the US, beginning with ten stores in New York City since this fashion capital is their prime location.

Adore Me Ecommerce vs Brick and Mortar

How to Turn Brick and Mortar into Ecommerce?

Choose where to sell

Moving your business online, you have to decide where to sell. Depending on what you sell and who your customers are, you can either go for your own ecommerce website or create a seller account on one of the marketplaces.

Online marketplaces include massive websites like Amazon and eBay. The account there is comparatively easy to set up and run, and you get access to a large existing customer group. Most of the marketplaces invest a lot in search advertisements, and their sellers are frequently shown to the users looking for the relevant products. On the other hand, the marketplace will not give you access to the customer data, and you will have barely any control over design and branding.

If your brick and mortar store has already earned the name among some customers, it is a good idea for you to create your own website. This way is more time-consuming, but there is a significant advantage that you can fully customize the pages. You are the one in charge of the whole selling process, and you decide how your product will be presented to customers. Another plus is that having your website, you don’t have to give the marketplace percent from every sale or pay a monthly fee. However, the advertising and marketing costs are pretty high, to increase the awareness and attention to your brand, you will have to spend quite a lot.

Some people may find it a good idea for successful brands to use only their website for selling products to create some exclusivity. However, this tactic usually does not work. Most of the well-known companies sell both on their brand’s official website and third-party marketplaces, as, for example, Tesla. There are two main goals they pursue while doing it – maximizing profits and increasing brand awareness.

Develop a design strategy

Creating design for your website, remember about consistency. Your customers should be able to recognize the similarity between your online and offline stores. Look around your store and single out the catching elements that can be used in designing the online store. Another way to do it is to ask your long-term clients. Entering your store often, they may be able to name a couple of features that they find prominent.

If your choice is a personal website, you will have to pick one of the ecommerce platforms like PrestaShop, Shopify, Bigcommerce, Magento, and others. Most of them offer a set of ready-made themes. However, if you want your webstore to be genuinely unique, you should create your own design from scratch. This solution is more complicated. You have to figure out how to present your brand and follow the trendy design practices at the same time. The custom design will reflect your brand’s nature better than any default theme.

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Build the product pages

In the brick and mortar, you have already experienced that people usually decide to purchase the product after they touch or try it on. In ecommerce, the situation is different – people rely on pictures, reviews, and descriptions. That is why the way your website pages look and how your products are displayed are crucial for your webstore’s success.

Make sure to show your product from different angles, and provide a lot of macro photos. Converse shows an excellent example of this practice. Providing multiple pictures they make their customers feel as they are holding the item in their hands.

Converse store Ecommerce vs Brick and Mortar

Make your webstore work in partnership with your brick and mortar

Having both brick and mortar and ecommerce is good, but your customers will appreciate the opportunity to shop across multiple channels. To provide a better shopping experience, and make your customers happy, connect your ecommerce to the brick and mortar store. There are several possible ways for you to do so.

First, you can offer your customers to purchase online and pick up in-store. It will allow them to experience the nice side of online shopping – avoid crowded stores – without waiting and paying for delivery.

The second option is to use tablets or special kiosks connected to your website in your brick and mortar store. Then your customers will be able to take a look at other available options, colors, and sizes which are not presented in a certain location. Going to your website, they will have an opportunity to leave an order and have an item delivered to the store. Another advantage is that using your site once they might think about it again when they need to purchase a similar product.

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Analyze the feedback and results

When you have the ecommerce website developed and connected to the brick and mortar store, remember that your job is not over here. Always keep an eye on the reviews about your website’s performance and improve the downsides promptly. Tracking the sales, website visitor statistics, and conversion rate will help you understand your customers are and their preferences better.

Infographic Ecommerce vs Brick and Mortar

Why does the Future Belong to Omnichannel Stores?

On the one hand, we have brick and mortar stores. It is a place where people interact with a product and can take the item they want home a couple of minutes after they encounter it. On the other hand, we have ecommerce which main advantages are convenience and time-saving. Combining forces, brick, and mortar, and ecommerce can compensate for each other’s shortcomings.

Omnichannel stores marry the best sides of the past with the advantages of the future, creating a close-to-perfect shopping experience. American companies with a strong omnichannel engagement enjoy an average 9.5% increase in year-over-year annual revenue, compared to a 3.4% growth in companies which do not use omnichannel techniques [6]. It gives the customers the enhanced shopping experience they look for and helps brands gain in power at the same time.

However, now, both ecommerce and brick and mortar go through many changes as separate channels too. As we can see with Amazon Go and Alibaba, physical stores head towards full automatization. Robots are replacing the regular shop assistant, and self-checkout stores are spreading all over the world. In the field of ecommerce, we can see that online stores are getting more convenient and fast, while their designs are sophisticated as never before.

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Conclusion

The retail landscape is emerging, and both brick and mortar stores and ecommerce companies have to adjust to the ever-changing world to avoid bankruptcy. In 2019, many brands around the world realize that in the future there will be no great shift from brick and mortar to ecommerce. The consumer expectations are getting higher, and they will expect smooth and efficient cooperation of online and offline markets – the future belongs to omnichannel stores.

[1] https://en.wikipedia.org/wiki/Brick_and_mortar
[2] https://www.forbes.com/sites/gregpetro/2019/01/04/10-predictions-for-retail-in-2019/#475a02975f13
[3] https://www.mytotalretail.com/article/why-e-commerce-and-brick-and-mortar-are-stronger-together/
[4] https://www.bloomberg.com/news/articles/2019-04-25/are-u-s-malls-dead-not-if-gen-z-keeps-shopping-the-way-they-do
[5] https://www.forbes.com/sites/andriacheng/2019/01/13/why-amazon-go-may-soon-change-the-way-we-want-to-shop/#591a3c8a6709
[6] https://www.emarsys.com/resources/blog/omnichannel-future-marketing/


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