Online Store versus Brick & Mortar (Part 2)

Behind the Boutique Kristina Nissen Online vs B&M Part 2

A couple of weeks ago I wrote a piece highlighting four reasons we chose to open Ellie & June as an online store rather than a traditional brick and mortar (B&M) store.  As a recap, we chose the online solution because of lower capital requirements, testing the market, more flexibility, and the rise of e-commerce.  Naturally, I recommend that you indulge yourself in the entire post here.  Go on, do it!

For the sake of your sanity and mine, I decided to split the post up into two parts.  The first part would speak to the advantages of an online solution, while the second would speak to the advantages of the brick and mortar solution.  Welcome to the second post 🙂  In our situation, e-commerce was the more viable solution, but that definitely shouldn’t undermine the serious advantages of having a physical location.  Many of which I wish we could enjoy now.  So below, I’m listing four reasons a B&M location is better than an online store.  Sit back and enjoy!

Location-based marketing (B&M Store Wins)

Hands down, the most difficult part of having an online store is successfully marketing it.  There are probably an endless number of amazing and innovative online offerings out there that no one knows about.  Some may never be discovered, and they’ll fail not because they weren’t bringing something valuable to the market, but because no one knew about it.  I would argue the biggest advantage of a physical location is location-based marketing.

In my last post, I admitted that I would love to see Ellie & June in a physical location in the near future.  I also admitted that I would be selective in finding said space, and wrote briefly about the trends in various mall classes; but for kicks, let’s imagine I already had a store on Newbury Street (I’m in Boston by the way). Its location alone would stand to market to thousands of people a day, just by being there (all other things equal of course). Can I market myself online? Of course, but it will always be active.  I’m taking about being passive here (at a minimum) and still getting traffic.  If I went passive I may as well be put on the moon.

Ease of entry for competitors (B&M Store Wins)

It’s easy to get into the online space. On a scale of 1-10, with 10 being starting your own oil and gas E&P company, I’m here to admit that getting into the online space is about a basis point.  That means that someone else with an idea marginally better than yours can easily get up and running and take away your customer base. It can mean high saturation. For example in my space (online retail), I’ve seen many online boutiques for women that offer the same clothing for the same low prices. Is there a need to have that many boutiques offering the same items? I don’t know, the market will determine that; but it will continue getting saturated until consumers shake out who they prefer to do business with, until they consolidate, or until they offer something the next boutique doesn’t have.

With a physical location, the barriers are high.  Much higher than an online store.  This means that if you’ve got that storefront on Newbury Street, you’ve earned the right to be there.  Someone’s going to need more than just a marginal improvement to what you offer and a lot of resources to pop up across the street and take your customer base.  It still happens, don’t get me wrong, but not at the pace that it can/will online.

Legitimacy (B&M Store Wins)

Like I just said, you earned the right to be there.  Either by growth or upfront capital, you’ve staked your claim to compete with the B&M folks.  There’s legitimacy behind your store or brand that people won’t question the way they do if you’re online.  You’ve got inventory they can feel, mannequins they can see, dressing rooms, people working for you, registers, and bags to take goods home.  Ironically, online businesses may have all of those things too, but they have to earn that confidence from strangers much more than B&M locations do.  I absolutely 100% can appreciate and respect this. If you’re online, you’ll have more convincing to do, period. Especially in the beginning. Obviously online stores like Revolve and Shopbop (owned by Amazon) don’t have this problem anymore.

Brands exclusive to B&M (B&M Store Wins)

When I started doing purchase orders for Ellie & June, I put in an order for two styles of toddler shoes only to find out that the brand recently decided to sell only to retailers with physical locations.  This happened twice with shoes (although in all honesty I am so grateful this happened)!  As I moved on to other brands, I learned that some brands simply aren’t interested in doing business with exclusively online stores. They prefer either a) that their items be sold exclusively in physical locations or b) to work with retailers who have at least one B&M location. My observation?  Whether or not a brand wants to work with an exclusively online store will depend greatly on the stage of their business and the price point of their products. As brands get more established and have higher price points, they start to get very selective about who carries their items (understandably so).

Okay, I’m going to stop here. Did you make it this far?! I feel like I could sit here for days discussing every nuance 🙂  Happy to be more specific or take feedback in the comments section!

Have a wonderful Thursday my friends!! Thanks for reading, I love and appreciate you all!

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