Which Is Best for You? Brick-and-Mortar vs. Online Stores

We understand that starting your own company is an exciting challenge. Research is part of your journey when you’re an entrepreneur. Familiarizing yourself with industry trends and creating a plan of action are essential to your business analysis.

Ecommerce is increasingly popular, and many companies benefit from an omnichannel strategy, meaning they sell through multiple channels—for example, online and in stores.

One benefit of an omnichannel experience involves customers shopping online and returning/exchanging the item at the store’s physical location.

According to research conducted by DigitalCommerce360, online retail sales increased 32.4% year over year in 2020 and are up 39% in Q1 of 2021.

While some brick-and-mortar stores offer curbside pickup, many shoppers benefit from hybrid options that omnichannel strategies provide.

If you are considering opening a brick-and-mortar store or an online shop, you may have some questions about which option is right for you. We put together a shortlist of pros and cons to help you decide which option best aligns with your goals.

Brick-and-mortar retail shop

Things to consider include choosing a location, hiring staff, managing utilities, and coordinating with vendors as you begin the early phases of preparing for a retail storefront.

Pros

• Customers can visit in person, try merchandise, or ask a sales representative questions about the product. These kinds of interactions can build long-term customer loyalty.
• Exchanges and returns can be completed in person, bypassing long waiting periods associated with online mail-in orders.
• Depending on the location, your store could receive walk-in traffic and gain new customers without any additional effort on your part.
• As your company grows, you can become part of your local community of small business owners.

Cons

• Customers will be limited to the store’s hours of operation.
• Hiring the right staff for slow and peak hours can be a challenge when you’re still getting used to the flow of foot traffic.
• Your location could make or break your business.
• You may spend more time and money hiring, training, and managing staff with a brick-and-mortar than an online store.
• Zoning law restrictions dictate where you can and cannot build a retail store.

Online store

A major consideration is which third-party platform you will partner with to handle inventory and electronic transactions. You may also need to find a warehouse and coordinate shipping couriers.

Pros

• Your customers can shop 24/7 from anywhere.
• Without a physical storefront, an online store can be more cost-effective.
• Without a traditional retail store markup and less overhead, you may be able to offer lower prices to consumers online.
• Online shopping saves customers time.
• Online stores don’t have the same zoning restrictions as physical stores, meaning you could run your store from the comfort of your own home.

Cons

• Without access to tangible products, your customers may opt to visit a brick and mortar or return items that don’t look like the website photos.
• Shipping could become expensive and prompt unexpected delivery delays.
• Returns and refunds could take weeks since customers cannot visit a physical location.
• It might be difficult for customers to find your store on the crowded internet.

Additional resources

• You can learn more about retail trends by viewing this article on Medium.
• Read up about omnichannel strategies on BigCommerce’s website.
• Visit the SBA for details about picking your business location and gathering information on zoning laws.

Contact us

As always, we are here when you need us. Contact us or stop by one of our Texas branch locations.