The retail industry has faced big transformations in the past few years. Even though traditional stores remain the foundation of the shopping experience, there is no denying that e-commerce is on the rise.
According to Statista, in 2023, global e-commerce sales reached $5.7 trillion, and this figure is projected to reach $8.1 trillion by 2026.
This is because many customers make their purchases through Internet channels. This raises an important question: Should you use e-commerce to grow your company?
Let’s discuss the details below.
Source: Bright Pixel
Ecommerce vs. Retail Sales: What’s the Difference?
E-commerce has been growing at double-digit rates every year, far faster than traditional retail sales growth. Compared to digital platforms, traditional retail is growing, although at a slower rate, due to the industry’s maturity and physical constraints on growth.
There are certain differences in both sectors. Let’s get into the details.
Source: Hostinger
E-commerce
- A Department of eCommerce Retail states that e-commerce sales are expected to account for 14.3% of all retail sales in the US alone by 2024.
- Digital wallets are predicted to dominate 54% of global e-commerce payments.
How do e-commerce sales work for customers?
- Browsing: Customers visit an e-commerce website or market to look for the products or services they need.
- Selecting: After exploring different options and categories, they select an item as per their choice.
- Adding Item to Cart: Once the selection is finalized, they can add a specific item to the cart for a final purchase.
- Checkout: After adding items to the cart, customers proceed to checkout; this step includes entering dedicated information such as addresses.
- Payment Options: Users can securely enter their payment details, for example, their card details. A secure and encrypted gateway is designed in the application and website for safe transactions.
- Confirm Order: After the payment is done, the user receives a confirmation and a time for delivery. They are also provided with tracking information to track their order.
For Seller?
- Processing Order: The seller gets a requirement for a new order through the same application or website. It then verifies the customer’s information and payment.
- Checking Inventory Details: Later, they check if the required item is in stock or if they have to order from somewhere.
- Packing/Shipping: Usually some firms handle the packing step, but if not, then the seller has to pack the item securely and ship it to the customer’s address through a shipping carrier.
- Order Status: Once the order is shipped, the seller updates the status of delivery and tracking data.
Source: Statista
Retail:
Facts: The unit sales volume of retail is decreasing by around 2%.
How do retail sales work for the customer?
- Browsing: The customer enters the store to look for certain products they need or want.
- Interacting with the product: They pick items and check their significant details, like clothes, so they can try them on and test electronics for proper power supply.
- Salesperson Assistance: Customers sometimes take advice from salespersons or ask questions regarding particular products.
- Selecting an item and checking out: Based on their needs and the guidance of the salesperson, they can select an item and proceed to checkout. They can pay the bill through different options like cash, card, online payment, etc.
For Seller?
- Greeting and Guidance: Greet and make the customer comfortable in the store.
- Product Knowledge: They have to answer their queries appropriately.
- Convincing for Upselling and Suggestions: Sellers or shopkeepers can also suggest other items for higher sales.
- Processing Transactions: At the checkout stage, sellers can scan items to calculate their cost and provide comfort of payment to the customers.
- Customer Service: After purchasing, if any issue arises with the product, the seller should provide proper assistance and support for return or exchange, whatever suits the product.
Source: Collider
Pros and Cons of E-commerce
In 2024, e-commerce will continue to grow due to shifting customer behavior and technological advancements. Here, we examine the benefits and drawbacks of online shopping using the latest statistics and trends.
Pros:
- High-Level Convenience: Shopping online is highly convenient, as you can take out your electronic devices, like a phone or tablet, and with a few clicks you can buy a product. Research by Oberlo says that about 50% of online sales are conducted through mobile devices.
- Wider Range of Selection: There are N numbers of options available in online stores, so you can effectively purchase by exploring them all.
- Competitive Pricing: e-commerce fosters competition; that’s why it has substantially lower costs than others.
Source: GeeksforGeeks
Cons:
- Lack of Physical Interaction: Online shopping can be a disadvantage for some products, such as furniture or clothing, because you are unable to physically inspect them before buying.
- Shipping Charges: Shipping charges are added to your final bill and differ for several items.
- Exchange or Returns: The return and exchange process can be more complex for online purchases compared to simply taking the item back to a store.
- Security Concerns: The risk of online data breaches and fraud is higher in online shopping.
Source: iThink Logistics
Pros and Cons of Retail Stores
Retail stores are a type of conventional commerce where products and services are sold directly to customers through physical locations. Businesses must comprehend the benefits and drawbacks of maintaining brick-and-mortar locations as the retail industry changes more. There is a 10% traffic boost encountered in the retail stores.
Pros:
- Tangible Interaction: Products are available for in-person inspection before purchase. When evaluating the quality, size, texture, or freshness of items like clothing, furniture, or fruit, this is crucial.
- Personalized Options: Salespeople can respond to inquiries, offer product knowledge, and make tailored recommendations.
- Try Before You Buy Options: You can easily try every kind of product before making a purchase.
Cons:
- Limited Options: There is a certain range for every product.
- Price Comparison Issues: You cannot easily compare the price of products in person.
- Inconvenience: The retail shops have a dedicated time for opening and closing, but they cannot provide 24/7 assistance.
Related: Ecommerce vs. Retail: What’s the Difference?
Can I Expand My Business Online?
Absolutely! Expanding your business to an online platform in 2024 can provide significant benefits. 95% of the population is all set to opt for online shopping until 2040. E-commerce is said to be a massive market and can help you grow efficiently.
Benefits of Expanding Your Business Online:
- Expand Customer Reach: With an online business, you can easily sell or purchase a product despite your geographical location. It provides you with exposure to endless opportunities.
- Target a Particular Audience: Use Internet marketing tools to pinpoint your potential clients with extreme accuracy using their demographics, interests, and online activity.
- Scalability: An online business can grow without limits. You can easily add or incorporate new products or categories in your system for a better customer experience.
- Lower Overhead: By unlining physical stores, you do not have to pay for huge rents, utilities, and staff. You can save a lot of money through this measure.
Real-time Success Stories to Inspire You:
- Warby Parker: This online-only retailer of eyeglasses upended the market by providing customers with stylish, reasonably priced glasses directly. It began operations in 2010 and has since expanded into a multibillion-dollar company with a dedicated customer base.
- Dollar Shave Club: This men’s grooming product online subscription business offers a practical and affordable alternative to major brands. After barely five years of launch, Unilever paid an incredible $1 billion to acquire it in 2016.
Create Your E-commerce Store Today.
There wasn’t a better moment to enter the online industry, since e-commerce is seeing rapid growth. You can reach a large audience and build a successful online store with the appropriate strategy.
Define your niche and target audience.
- Recognize the most recent market trends in the niche you have selected. To successfully position your offerings, analyze rival activities, determine client wants, and evaluate product gaps,
- Describe the perfect client profile. Take into account your preferences, internet behavior patterns, and demographics (age, geography, and income). This serves as a guide for your entire brand messaging, marketing tactics, and product selection.
- According to a recent Shopify report, 62% of online buyers look up things online before visiting a store to make a purchase. Comprehending digital behavior is essential for the prosperity of e-commerce.
Choose the perfect e-commerce platform.
- Look for and select an e-commerce platform based on your needs and financial constraints. Shopify, BigCommerce, Wix Ecommerce, and WooCommerce are a few of the well-liked choices. They all have different features, cost plans, and user-friendliness.
- Over 50% of global e-commerce sales are expected to be conducted through mobile devices in 2024. Choose a platform that offers a mobile-friendly shopping experience for your customers. [Source: Oberlo, April 2024]
Source: ConsultingWhiz
Conclusion
Due to its rapid expansion and worldwide presence, e-commerce offers firms a definite chance to prosper. Even with obstacles like rivalry and inventory control, a strategically designed web presence may cut expenses, increase revenue, and yield useful consumer information. In the end, the choice is based on your target market and available resources.
Read more: What are the Types of Ecommerce Retail Models?
FAQs:
1. Is Amazon Retail or E-commerce?
Amazon is both a retail and an e-commerce company. Although its core business is e-commerce, it also has retail stores like Amazon Go and Whole Foods Market.
2. What is the Difference BetInternetsical Retail and E-commerce?
Physical retail is the traditional method of conducting business in small or large stores. On the other hand, e-commerce refers to performing business through the Internet on websites or applications.
3. Is it better to Sell Online or Retail?
There are pros and cons to both online and retail businesses. Online or e-commerce is considered a trending business because of its pros like 24/7 availability, wider reach, and detailed customer data. However, it has some drawbacks as well, like high competition, the cost of marketing, and shipment and delivery costs.
Retail has its benefits, such as better customer relations, local market acquisition, and the significant advantage of impulse purchases as well. However retail has a smaller reach, fewer customer data, and a lower cost of inventory as well. You can choose your medium for performing business according to whatever suits best for your budget and business.
