Last month we saw how one Sydney business that had started life as an online-only concern prospered by opening a physical store.
A similar story is shared by Dean Salakas, owner of The Party People, a bricks and mortar and online party supplies store. Dean has been careful to measure the returns from his on and offline operations and shared the pros and cons and how he is ensuring his business meets the needs of his customers.
“It is always assumed that online is more profitable than bricks and mortar but my response is always, firstly, have you tried both and second, if so, have you closely measured the ROI of each? You may find some surprising results, as I did,” said Dean.
Dean explained the considerations for his online store followed by bricks and mortar and how they compare.
With an online store:
- You still need a warehouse and to space to hold stock.
- It takes significant time to pick an item, communicate to customer if not available, get in touch with them, follow up, offer alterative, handle returns.
- There is fierce pricing competition online.
- If you lack the digital marketing skills in house, the cost of outsourcing will squeeze already tight margins.
- Customers online can be more demanding than offline no matter how much information you provide on your website or social media pages. Ignore customer queries or complaints at your peril!
An offline store allows you to:
- Meet and greet customers and understand their needs and build real relationships.
- Create an in-store buzz and a great customer experience.
- Ensure strong passing trade sales through careful choice of location.
- Build a relationship with the community around you.
- Double up space as storage for online sales.
- Get staff to work on online store during quiet times in store.
- Easily answers questions about products in store.
- Save time and money as you don’t need to to pick items, incur package or postage costs, or deal with returns, damages and faulty items.
Online customer support can be a huge drain on time and therefore increases the cost per sale, thereby reducing the ROI. It also relies on having staff suitably trained and able to deal with customer issues in a knowledgeable and polite manner – outsourcing to a call-centre or online answering services, may not always be cost effective.
“I actually removed my online chat facility from my website as the amount of time taken to answer questions where the answer was already listed, was simply not justifiable – questions such as dimensions of products, shipping terms – all of which were clearly detailed. I just think that customers have become so spoon-fed and are far more lazy now online,” explained Dean.
What is clearly evident from each of the case studies is, that they would never remove the online presence in favour of purely bricks and mortar. They simply wouldn’t survive without online yet equally would not with purely online; there is most definitely a balance to be struck and a way to compliment the two. The need to show your customers that you are on trend and can provide a choice for all shoppers is important, not to mention opening up the scope to sell overseas and beyond the immediate locality.
Hear how another store owner tackles the balance of on and offline marketing, in Part 3 next month.
Susie Campbell, Founder, Little Black Book Marketing
