Click or Brick: Is Ecommerce the Clear Winner of Retail?

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For today’s consumers, ecommerce shopping seems to be all the rage. With the frequent news in the payments industry about ecommerce trends and the mobility of payments, it’s not unlikely that one might assume that ecommerce is disrupting retail and will wipe out brick-and-mortar retail as we know it sooner rather than later.

Or will it?

Ecommerce retail might seem like the more popular choice over brick-and-mortar retail, but both forms of retail will continue on into 2018, with an emphasis on digital integrations everywhere – from brick to click. Brick-and-mortar retail is not dead or dying despite what you may have heard, but rather, it is evolving to be a collaborator with the booming ecommerce environment. There is no way to declare a true winner between ecommerce retail and brick-and-mortar retail now or in the future because, ultimately, the real winner is omnicommerce, or an omnichannel retail strategy.

Online retail and brick-and-mortar retail both bring their advantages to a business, but the number one thing that consumers want from any business is a choice, and omnicommerce gives them just that. Understanding the pros and cons between ecommerce and brick-and-mortar will help to illustrate how both channels come together in order to create a seamless omnichannel experience for both business owners and their customers.

Brick and Click Statistics

If you need proof about how neither form of retail is headed for the ultimate end, here are some enlightening ecommerce and brick-and-mortar statistics to reinforce this theory.

According to the Census Bureau data reported by Forbes, the total quarterly retail sales from ecommerce have been steadily rising year after year since 2000. In the third quarter of 2000 alone, ecommerce generated $7.3 billion in sales. By the third quarter in 2010, that number had risen enormously to $43.5 billion. ecommerceIn Q3 for 2017, the total quarterly sales yielded nearly $116 billion. This accounted for almost 10% of retail sales for the quarter. Based on these numbers alone, it is clear that ecommerce is doing well, but there’s more to consider.

Brick-and-mortar is still doing well in the retail world by accounting for 94% of all retail sales, even as ecommerce retail continues to rise. One major contributor to this result? The return process. In fact, it’s also been reported that most global millennials, or about 70%, prefer to shop in brick-and-mortar stores, and over 77% of Gen Z consumers in the U.S. have also said that brick-and-mortar stores are their retail preference.

ecommerce Furthermore, nine out of the top ten U.S. retailers are all physical chains. Brick-and-mortar stores have also been noted as being more profitable and generating higher conversion rates than ecommerce retail. Factors such as shipping and handling costs and the potential price of returns help to form this data, as these are not costs typically associated with a brick-and-mortar experience.

This data is a good start to showing why ecommerce and brick-and-mortar both bring something useful to the table, but the consumer likes and dislikes are what make those statistics a reality. To that end, we will explore the pros and cons of brick-and-mortar vs. ecommerce.

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The Pros and Cons of Different Retail

It is no secret that going online or on a mobile app to make a purchase is a retail preference for many consumers, and businesses have taken notice. Particularly with the recent holiday season, it was the goal of several businesses to ensure a top-notch online payment processing experience for shoppers everywhere. This year going into the high volume shopping season for the holidays made online and offline retailers compete heavily for consumer attention, particularly on Cyber Monday and Black Friday. Beyond just this time of year, however, retailers are constantly looking to make the consumer experience better, online and offline.

Ecommerce offers a lot of advantages, but even with those advantages come some disadvantages, too. We take a look at some of the pros and cons of ecommerce and brick-and-mortar retail.

Ecommerce: Pros and Cons

Some of the pros of ecommerce are:

The ability to shop from the comfort of your own home or office is maybe the top benefit of ecommerce retail. From busy professionals young and old to parents of busy families or consumers who live in rural communities without a nearby shopping center, the ability to order everything you could possibly need online or via a mobile device can be a lifesaver (not to mention a time-saver).

Going to a physical store can take time for commuting, walking around the store and waiting in line to purchase or return an item. With ecommerce, many retailers make it a priority to provide a consumer with the smoothest possible processes that take up the least amount of time.

Pre-Stored Payments
With most ecommerce websites, customers have the ability to save their payments information within an account, or in a digital wallet if paying via mobile. This saves customers the need to pull out the plastic with every purchase.

Mobile Means More
Ecommerce doesn’t only mean shopping from your laptop; it counts for mobile, too. Mobile ecommerce can also offer money-saving and convenience opportunities for consumers. The Target app, now with Cartwheel, gives customers the ability to pay and use coupons within the same app allowing for a smoother checkout.

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Some of the cons of ecommerce are:

Tedious Returns
Despite promises of smoother processes via ecommerce retail from businesses like Amazon and Madewell, many ecommerce customers are still finding themselves spending time in stores when trying to do a return. In fact, one of the biggest hangups from online holiday shopping is the lack of a sufficient ecommerce return process. Surprisingly, many retailers still do not include shipping labels or efficient communication for dealing with returns. This can make for a tedious and time-consuming con of ecommerce retail.

Difficult Communication
Ecommerce provides multiple options for communication, like chatbots, email contact and form fills. However, ecommerce communication can be more difficult if a customer needs assistance with online payment processing or problem-solving in the moment.

Uncertain Security
There are many things businesses can do to ensure proper data security and secure payments on their ecommerce sites, but sometimes the level of security can be uncertain or contain holes which can be unnerving to customers.

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Brick and Mortar: Pros and Cons

Some of the pros of brick-and-mortar are:

Real-Time Shopping
The great debates over choosing a size, color or any other ecommerce shopping head-scratcher is eliminated with brick-and-mortar. Shoppers can ensure that they are getting the right product or service in real-time, saving them time and potentially money trying to start a return process.

Real-Time Communication
Forget form fills and watching your email inbox or dealing with an auto menu phone call. With a brick-and-mortar location, there is instantaneous person-to-person customer service to assist with anything a customer might need.

Exclusive Incentives
It is typically easy to find an online coupon for ecommerce, but there are certain promotions that are only offered in-store, keeping incentives to save money and keep foot traffic alive.

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Some of the cons of brick-and-mortar are:

For all of the busy bees, going to a brick-and-mortar store location can take a great deal of convenience out of the shopping Not always as convenient as an online payment processing experience

Physical Store Means Physical Wallet
Payment information cannot always be stored in a brick-and-mortar store, unlike ecommerce. Not all brick-and-mortar stores have the option of using mobile payments or NFC tap and go checkout technology, so this can be a drawback for some consumers.

Why Omnicommerce is the Winner

Different customers will have different shopping and payments preferences. While some might solely enjoy the speedy efficiency that online retail has to offer, many continue to appreciate the physical presence of a business and the ability to get what they need in real time. No one way is better than the other way, which is why it is extremely beneficial for businesses to consider multiple ways to pay and shop, otherwise referred to as omnicommerce.

What exactly does omnicommerce do that ecommerce and brick-and-mortar can’t do alone? A case study by Harvard Business Review has shown research that omnichannel customers love using a retailer’s many touchpoints to create the perfect retail experience. By this, it is meant that the consumer is able to use a mobile app to compare prices or use a coupon, as well as buying online and picking up in-store OR the consumer may make a purchase in-store and arrange for at-home shipping. A channel-rich environment helps to drive customer engagement by providing a multi-option approach to retail which creates a seamless customer experience. A blend of conveniences from both channels is what ultimately results in that goal being met.

Omnicommerce in 2018 will be a blend of brick and click after 2017 laid the groundwork for a new year full of digital integration. According to Pamela N. Danzinger of Forbes, 2017 laid the foundation, and 2018 will keep building the house.

2017 was the year of digital discovery; 2018 will be the year of technology and more integration of it into mainstream retail. It will be the year where we see retailers create new operating models that are less focused on their store vs. the web and more focused on creating experiences that give customers more control and convenient ways to shop… The acceptance of omnichannel trade and digital-savvy merchandising is a requirement for success. However, it is not only acceptance of new ideas, but also the need to review old systems and procedures.

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Omnicommerce is already benefiting multiple businesses. For example, Nordstrom is leveraging their brick-and-mortar presence to build up their flourishing ecommerce presence by opening smaller stores with limited inventory, helping to drive traffic to their online retail option. Also, a Casper mattress that previously was only available online can now be found in Target store locations. In the debate of ecommerce vs. brick-and-mortar, omnicommerce is the real winner.

The Payline Effect

Payline helps your business be at its very best by providing everything you may need to let your customers pay the omni way. Are you interested in online payment processing? We have what you need. Considering entering the brick-and-mortar world? We’ve got you covered. Whether you decide to focus on ecommerce, stay solid in brick-and-mortar or try a dual-action business, we are a payment processor that is ready to help you every step of the way. Your customers will appreciate that they have more ways to pay and your business will appreciate having a reliable payment processor like Payline at its side.

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This piece was written by Lauren Minning, Content Specialist for Payline.

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