Shifting From Online To Offline Retail

Offline to Online

Most online small business owners are a little if not very apprehensive when talks of running an offline retail store or brick-and-mortar come around. While opening several store fronts may be a small dip in capital for major online retailers such as Zalora or Fashion Valet, the reality is that it is a costly task for regular businesses.

A question arises when a leading e-commerce company expands into physical retail: why? According to the CEO of Powell’s Books, Miriam Sontz says that book-buyers enjoy certain aspects of physical retail that online services are unable to provide.
Furthermore, there are some perks associated with brick-and-mortar retail that just doesn’t translate as well on the internet. The web sphere is a fast-paced environment where brands are unable to stand out on their own. Customers are unable to interact with merchandise, which leads to many returned purchases. For business owners, data collection is easier to discern when the people providing them aren’t anonymously browsing the web.
While the aforementioned perks can be appealing, realistically, physical retail is not an appropriate decision for every online business.
While no one understands your aims as well as you would, there are a few considerations to ponder before expanding into a brick-and-mortar storefront. Here are a few.


1. Location

“LOCATION, LOCATION, LOCATION!” The popular phrase has not lost it’s appeal throughout its’ decades of usage, and for a good reason. Particular cities, neighbourhoods and demographics may better suit your business model. This is where accurate customer data will assist you. Understanding who and where your customers are through purchasing trends will help you determine a suitable location for your brick-and-mortar store, and how to best approach the matter of setting up physical retail.

2. Supply & Demand [restrict]

Are you certain that this shift to brick-and-mortar stores will benefit your company in the long run?

Understanding customer motives helps determine if the move is ideal, but physical retail requires a significant investment of time and finances. We will discuss those aspects later, but for now, consider what your motivations are for doing so? Consider if the move aligns with your company’s ultimate goals before acting on it.

The most significant reason to move from e-commerce to brick-and-mortar distribution is usually customer demand where customer’s requests for a brick-and-mortar setup to be a stepping stone in their move. When online stores recognise a demand for their presence offline, this can instill the confidence to move into physical retail.


3. Time & Finances

While you may have defined a strategic business plan, a strictly planned budget will help to determine if brick-and-mortar truly is a viable option. Consider initial investments:

  • Staff
  • Down payment
  • Inventory & Stock
Then, consider ongoing costs like:
  • Operating hours
  • Utilities
  • Taxes
  • Monthly rent
When determining these, it would be wise to estimate a point where you will be turning over profits. If say, your goal is to turn-over in 1 year, then multiply your ongoing costs by 12 months and plan your budget accordingly. A safe rule would be to invest an additional 20% on top of your planned budget, to make way for any extenuating circumstances that may arise.

5. Online To Offline Retail

With a solid online store, it is likely that you are aware of your product inventory. However moving into brick-and-mortar retail requires you to rethink your game plan. Consider if not all, then which products from your inventory you would like to have. Shoppers are likely to investigate your online inventory before coming to the store, so if there are parts of your inventory that are not available, make sure to mention it. It is very easy to over or under estimate your capacity when first moving into physical retail, so be wary of this habit.

6. Unique Selling Proposition (USP)

Simply put, there needs to be some minor exclusivity that differentiates your online and offline retail channels. Adding new products to your physical store will create a unique stance for it. That feeling of exclusivity that comes with a product that is only available in one place will help to bring your online customers to your storefront.
The Otter Shop is a prime example in this department. The newly opened shopfront by Otter Products features exclusive product lines that cater to the demographic in their location. Combining this with their in-store customization provides visiting customers an experience that is exclusive to their brick-and-mortar outlet.

Actionable Takeaway:

The future of retail may lie in combining brick-and-mortar stores with e-commerce. Take it in the case of Love Bonito. Originally a blogshop, this online fashion retailer transitioned into e-commerce before finally opening their flagship store at 313 @ Somerset in Singapore, in 2017.

Knowing your customers and their demands well will help to ascertain the necessity of moving from an online space to setting up a brick-and-mortar store.

Once you’ve decided to set up your offline store, the next step is sustaining it. Read on about just how to do that here.



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