A recent Internet Retailer magazine article noted that large retailers like Nordstrom and Macy’s have boosted their online sales in 2011, sometimes as much as 40%. That’s incredible when you consider that is an increase of a few hundred million dollars in some cases. So why are people increasingly choosing to shop online instead of shopping at their local stores? There are three key advantages that online retail stores have over traditional brick and mortar.
Many people would consider stopping by a local store easier than ordering something online and getting it shipped. However,
there are a few reasons why most people consider it easier to buy online. For one, it doesn’t require you to actually go to the store. Just to go to a store, you need a way to get there, and for most people this is driving. Not only do you waste gas driving to the store, but it takes precious time out of your day. Compare that to shopping online, which on many major sites has become a one click affair. There’s no need to drive to the store to pick up an extra hair comb, just choose one online, click once, and voila, it’s on its way. This brings us to another aspect of convenience: speed.
This is one area that traditional retail has a leg up over online retail. By shopping in stores you get instant gratification and you get to hold your purchase in your hand the minute you buy it. But this advantage is slowly being negated by the expanding field of eCommerce order fulfillment. A few years ago, it wasn’t unusual to wait for a week to get your product delivered, too long for many consumers. Today however, a online retailer with high-quality online order fulfillment can usually get your product to you within 1-2 business days. Sometimes, you can even receive it the same day you order it. This has eroded the attraction of shopping offline, and it is one reason why more and more people are choosing to shop online.
Is buying something online cheaper than buying it offline? In many cases it is. Depending on the state, many online stores do not charge sales tax, giving a huge competitive advantage to online retailers. Oh, but you still have to pay for shipping don’t you? Not necessarily. Many stores will offer free shipping if you purchase a certain amount. Others will offer yearly subscription services that offer free shipping for every item bought. Even when this is not the case, online buyers have the ability to easily compare prices for the best possible deal. When your competition is only a click away, there is a huge incentive to offer the lowest possible prices. Price has always been a critical component of ensuring sales.
Can’t find that special edition Chiapet in your local Walmart? No problem, because it’s very possible you’ll find it online. Specialty items and almost everything under the sun is sold on the internet. This is because online retailers do not have to hold inventory in every location, as they do in brick and mortar. The internet also makes it easier for specialty sellers, because they don’t have to maintain a physical storefront to sell their product. Lastly, international commerce is a big factor online. People selling on the internet are not competing with neighborhood stores, they are competing with everyone else selling similar product, whatever country they may be from. The ability to get your order shipped overseas is incredibly common these days.
In short, online retail provides significant and decisive advantages over traditional brick and mortar, so it shouldn’t be a surprise that large companies are seeing huge increases in online sales. Will there always be people for whom a 2-day delivery is too slow? Yes, and there will always be people who enjoy shopping in stores and browsing as well. But the shift to online retail is not something that can or should be ignored.
How has the internet made your online business possible?