What it means when retailers don't open an online store
Published on: July 17, 2019
Updated: August 29, 2023
Two-track operation is advisable. This is true at least for the retail sector. Many of the major brick-and-mortar retailers already run an online business alongside their retail store. Some offline retailers, however, bristle at the thought of operating a web store in addition. But should every retailer open an online store and how important is it really?
Many customers have long since learned to love both. Both the online store and brick-and-mortar retail are important to them. Those who shop sometimes online and sometimes offline bring variety to their shopping experience. For some retailers, however, it is difficult to accept online retailing and see its advantages. But they should not see online and offline retail as rivals.
How many brick-and-mortar retailers have an online store?
The advantages of the online store are obvious: customers can shop directly from their sofa, they are not bound to opening hours and it is fast. Because more and more customers appreciate these advantages, almost all major retailers such as H&M, Zara and Co. now have an online store in addition to the offline store. For many, however, this is not yet the case. According to a survey by the German Retail Association , 65 percent of retailers do not run an online store. In contrast, 25 percent sell their articles via their own web store and 15 percent via a marketplace, such as Amazon or eBay.
The majority of German retailers do not yet run an online store. (Source: German Trade Association)
Reasons against having your own online shop
There are many reasons why many retailers do not yet have an online store. On the one hand, they lack direct contact with the customer through the online store, and on the other hand, they often cannot offer the same service as in stationary retail. Some convinced stationary retailers also consider it to be newfangled gimmickry or think that mainly inferior goods are sold online. Whether the online store is impersonal is up to each store. However, personalized shopping with the help of Recommendation Engines or personalized shipping messages can establish close contact with customers. The personal approach makes the customer feel understood and in good hands in the store.
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Reasons for having your own online shop
There are, of course, arguments against having an online store. On the whole, however, running a web store brings some advantages. There are many reasons why stationary retailers should also be active online:
Expanding the customer base
More customers can be reached through the online store. It is no longer just customers from the local area who make purchases, as is often the case with stationary retailers. Goods can also be sold nationwide or even statewide. This allows retailers to reach more people as well as increase their sales.
Offering niche products online
For niche products, it is particularly suitable to run an online store. Although there are sometimes stationary stores that sell such products, these usually have to be located first. This path is often too time-consuming for some customers. It is easier for them to order the product they are looking for from online retailers. This saves them time and nerves.
The Internet is no longer virgin territory. On the contrary: people make use of it almost every day. They handle banking matters from there, book their next vacation or exchange information with friends. So it stands to reason that people also use it to make purchases. Even though brick-and-mortar retail will not disappear overnight, it is important to adapt to the present. Digitization is advancing more and more, new technologies are emerging, and it’s hard to imagine life without the Internet.
Half the way is already done
Retailers who already have a brick-and-mortar business and want to expand online don’t have to start from scratch. There is already a registered business, full warehouses, relationships with suppliers and a customer base. This provides the perfect basis on which to build an online store. Of course, opening an online store involves additional costs. But if retailers are already successful with their stores, an online store will usually pay off. If the stationary trade is already not running properly, an online store will most likely not be able to change this.
It is important that the online store is maintained in the same way as the brick-and-mortar store. After all, customers will only shop there if they feel comfortable. So the focus should not only be on online or offline.
It also works the other way around
It’s not just stationary retailers that are evolving. Online retailers are also increasingly taking a liking to stationary retail. Notebooksbilliger.de and mymuesli.de, for example, have also opened brick-and-mortar stores after successfully launching their online stores. With multichannel, cross-channel and omnichannel, online retailing and stationary retailing can be combined quite easily. Anyone who owns an online store should also think about stationary retailing. The competitive pressure between online stores is great. There are warnings, it is mutually undercut in price and displaced. A stationary trade can create a second mainstay and, if necessary, offer a little more security. However, it must be carefully calculated and weighed up in advance whether stationary trade is really worthwhile or whether it would only cause high costs.
For online retailers, there are various reasons why it is worthwhile for them to go offline:
- Create additional points of contact
- Gain information about customers
- Additional revenue stream
- Additional alternative to the high cost of acquiring customers in online retail
One thing is certain: Brick-and-mortar retail needs online retail to survive in the long run. Digitization is advancing steadily, and retailers should also move with the times. They must adapt to the demands of their customers and provide them with a wide range of products, because they have long been taking part in the process of digitalization. With the help of an online store, you become more visible and can thus expand your customer base. Young people in particular often look at the online presence first before visiting a store. However, anyone who decides in favor of an online store should also look after it just as well as the stationary store. Retailers don’t have to worry about the online store being too impersonal. With the help of personalized offers and personal shipping messages, they can establish close contact with their customers and get to know them better.