Online vs. Offline Retailing — Who Wins?
Online retail certainly has its advantages: low overheads, easy stock management, an almost infinite potential customer-base and a direct link to fans. Set that against the archaic high street shop and it looks like it’ll win hands down. But there are areas where the physical world can never be beaten.
Financial efficiency is one area where online retail is leagues ahead — for the obvious reason that you don’t need an expensive high street location, complete with branded refit to trade from. For online all you need is a website and a space, any space, to store your goods. But that’s not to say that a good digital shopfront is not expensive either. Web empresarios are quickly realising the value of their trade and the costs of building a good e-commerce shop can be eye-watering.
Stock management of a physical shop can also be a challenge. When we opened a physical pop-up we already had stock from online trading. After long days sorting the shop fitting and displays we thought we were ready to go. It was only on the opening night as shoppers started to arrive that we realised we hadn’t priced anything! We were used to the price being up on the site automatically through our digital stock management system.
A few months later, we needed to re-price items for our January sales. What took a few minutes on our e-commerce site took days in the physical one. Then we had to change everything back again a few weeks later… When you’re used to the sleek efficiency of an online shop, the manual labour and time wasted on menial tasks in a physical one can be a real frustration.
In a physical shop, managing staff takes a lot more time than you’d expect. Interviews can take days, then training can take even longer. In fact, training never really stops as there are always new things to be added or tweaked or changed.
The type of stock that sells in a physical vs. an online shop is subtly different too. Generally, products which have a higher price point due to material or build quality work better when a customer can see the product in the flesh, and feel how well they are made. It made us realise the value of having bigger pictures when selling online as a way of re-creating that in-your-face experience. Low value, impulse-buys like cards are also more successful in a real shop as postage costs and delivery times can deter; whereas products at mid-range price points sell best online. Hmm.
For any business, reaching and communicating with customers is key. Online the reach is potentially anyone with the internet, but it’s the communication which can be more difficult. Yes, you sign someone up on your mailing-list, get them to follow you and tweet them updates on new products, but there’s no substitute for a face-to-face encounter. In the physical shop we talked to hundreds of people about our brand, and had the chance to explain what we were about. It helped build our profile and we noticed that Google searches for ‘Howkapow’ were up very significantly in the time we had the retail space.
It’s practically impossible to survive in todays market with a physical shop alone. But while online selling might be efficient, it’s not always the best place for certain products. A physical shop can also get you closer to your customers and really help galvanise your brand. The jury’s out.
Cat How is a Creative Director and Co-Founder of Pollen Place — a unique workspace and event space based in central Bristol designed to nurture creativity and help people and their businesses grow. She is also Creative Director of branding and graphic design agency, Polleni. Cat studied at the University of Bristol and Central Saint Martins College of Art & Design. She has worked as a journalist and graphic designer for newspapers such as Metro, The Guardian and The Observer. Most recently, she was creative director of the e-commerce design business, Howkapow, she founded and ran with her husband Rog How. Howkapow was sold in February 2017. In that time Cat and Rog were running it, Howkapow was given accolades such as the “Best Online Shop for Stylish Homewares” (The Guardian); one of the “Top Ten Online Design Shops” (The Sunday Times) and their pop-up “The Best Shop To Visit In Bristol” (The Guardian).