Brick and Mortar vs eCommerce—Heated Competition or Opportunity?
Updated · May 31, 2022
The physical and the digital. Brick and mortar vs ecommerce. Is one better than the other, or is there a harmony that can give you the best of both? To find out, join us as we discuss the differences between the two.
What is eCommerce?
eCommerce, also known as electronic commerce, is the buying and selling of goods and services via the internet.
eCommerce can be anything from buying a toaster online to booking a hotel room or ordering food through a delivery app.
eCommerce has been around since the ‘90s, but has really taken off in the past few years, spurred on by increased smartphone users globally.
What is Brick and Mortar Business?
Brick and mortar is a term used to describe businesses that have a physical presence, as opposed to online-only businesses.
This can include both brick and mortar storefronts and other types of businesses with physical locations, such as salons, warehouses, or distribution centers.
Brick and mortar can be thought of as best embodying “traditional” commerce. Rather than browsing an online store and clicking on items, you walk through a physical store and interact with shop attendants.
eCommerce vs Brick and Mortar—Key Differences
As you can imagine, there are some key differences between brick and mortar and ecommerce. Both have their advantages and disadvantages.
There is a middle ground, but for the differences below, we will be comparing wholly offline to exclusively online businesses.
Brick and mortar stores are confined to one physical location, or more if they’re a chain.
Regardless of how many branches a brick and mortar store has, the fact remains that in order to shop there, customers must physically go to the location, which is of a particular size.
This limits the number of customers a traditional brick and mortar store can have to those who are physically nearby.
eCommerce stores on the other hand are online, and so can be “present” in everyone’s home. Anyone with an internet connection can buy from an online store, and barring any shipping restrictions, receive their products easily.
Being bound to a physical storefront has another restriction, which is a maximum capacity. The store can only fit so many customers and only hold so much stock.
Now while ecommerce and brick and mortar stores can both run out of stock, an ecommerce store has the liberty of allowing customers to order from storage.
In a brick and mortar store, a customer is more likely to walk away if they don’t find what they want.
A brick and mortar store, however, will have to physically add to the store, or look for a new location. This process is way costlier than modifying a website and takes far longer, which can hinder retail growth.
With ecommerce, there's more flexibility. Online stores can offer a wider selection of products because they're not limited by physical space, plus there’s more room for experimentation.
For example, an ecommerce store can dropship in order to test products, which means no money down on poor sales, whereas to test products, a brick and mortar store would have to buy some stock, which could go to waste if there’s no interest.
While ecommerce vs brick and mortar stores can both make use of the same marketing channels, a huge difference is the fact that ecommerce marketing can be “interactive.”
A user clicks on an ad for an ecommerce store, and boom, they’re on a landing page being directed to make a purchase. It’s instant. Short of having someone standing outside a store to usher customers in, physical stores just don’t have the same ability to capture attention…
Holding Customer Attention
While ecommerce stores may be better at capturing customer attention, holding it is an area where brick and mortar wins out.
By the nature of the internet, an ecommerce growth rate can be staggered because users are desensitized to simply clicking away. This makes optimizing bounce and exit rates difficult.
With a physical storefront, however, customers can better engage with products by physically holding them, and salespeople can talk to them in order to try and convince them to buy.
Due to needing a physical space, and all the costs that come with it (rent, electricity, etc), brick and mortar stores have higher overheads.
There’s also more risk of low-level crimes like shoplifting, and smash-and-grabs. Being in densely populated areas also poses the risk of environmental hazards, such as unrest.
An eCommerce strategy faces none of these risks, as stock is generally held in warehouses, which are more secure, and in lower population environments, which means they’re more predictable.
Brick and mortar stores typically operate during “business hours”, during the day, and close for the night. They’re also often closed on major holidays, or may need to close due to unforeseen circumstances.
eCommerce stores have no such limitations. An ecommerce store is open 24/7 365. While the customer may face a delay in actually getting their item, there’s no delay in them purchasing it, as there is with a brick and mortar strategy.
This means that an ecommerce store is more likely to see impulse buys too, as people left to their own devices could be browsing at 2AM if they desire.
Brick and mortar stores accept cash, credit, and debit cards. eCommerce stores accept the same, but they also allow for the use of payment gateways such as PayPal and Stripe.
This difference is beginning to disappear, as more brick and mortar stores begin to accept alternate payment methods, however. This brings us to our next point…
This term refers to a business that has both a physical presence and an online presence.
In other words, it is a brick and mortar business that also does business online. The advantage of being a click-and-mortar business is that it allows companies to have the best of both worlds.
It can allow a brick and mortar store to expand business across borders, funnel more customers to them, and automate aspects of their business like order fulfillment.
Let’s also not forget that some businesses can’t be completely digitized. Beauty salons, auto shops, and so on need physical stores.
Therefore they can’t go online completely, but they can digitize aspects of their business, such as their advertising, or by creating websites that make it easier for customers to book appointments and get more information.
So who wins the brick and mortar vs ecommerce battle? eCommerce seems to have the clear edge, but as we’ve said, some businesses must be physical, and so, the best path is to make use of both old and new to take a business to the next level.
While we believe both will exist alongside each other for some time yet, the future of ecommerce promises to bring them closer together.
Garan is a writer interested in how tech reshapes the environment, and how the environment reshapes tech. You'll usually find him inoculating against future shock and arguing with bots.