Digital versus brick-and-mortar is a major subject of discussion and debate these days. New start-up companies have been making inroads into the market for consumer goods of all kinds. The older brick and mortar companies are not as savvy about developing technologies as the new generation of entrepreneurs who are into e-commerce. As a result they are losing market share to the start-ups, which also have the advantage of giving consumers the entire experience from beginning to end – browsing for products to the final purchase.
Negligible cost of overheads
One thing that works in favor of e-commerce is the low or negligible cost of overheads as compared to brick and mortar companies. They can just charge lower prices on the products – the vertical integration gives them the scope to cut down expenses and push up sales and hence profits. The other advantage these companies have is the consumer experience which they own and can hence exploit to their benefit.
If brick and mortar companies view e-retailing as competition then they will lose out – so the way forward seems to be for them to enter the area of digital retail channels and work in conjunction with e-commerce companies to bring the best to consumers, whether it is products and services, customer or shopping experience. It will be helpful to the older companies if they offer customers the satisfaction they are looking for in the form of online-shopping.
Complementing one another
We need to start looking at this from a different perspective now – instead of viewing digital retailing as a replacement for brick and mortar selling, we need to see them s complementing one another. In fact digital retailing should become another channel of selling that can add to the customers shopping experience.
Research and observation studies have shown that consumer shopping behavior is changing very fast. They do their product experience online, check with friends and colleagues for product feedback, look for online product reviews, visit outlets to test the products and then buy online. And finally they look for a nearby shop or place for after-sales service. So if the two types of retailing work together, they can make the entire sopping experience more satisfying for the customers which would result in higher sales and greater profits for the retailers.
In-store activities and displays
When customers visit stores, they tend to spend more time, they are relaxed and more open to what is on display. So stores can enrich this experience with in-store activities and displays and merchandising and this will motivate customers to buy. A digital retail outlet is more suited for customers who do not have much time, who look for convenience and bargain prices, and retailers can use their digital presence to increase customer interaction and spread the word through online sharing. Digital communication also helps retailers understand their customers better so that they personalize their offerings to them.
So rather than have these different types of retailing vying for the same space in the customers’ mind it will be to everyone’s benefit if they were to join hands and work together to provide a smooth, seamless experience to customers while ensuring higher sales and profits to retailers.