The battle between e-commerce and brick-and-mortar stores has never been fiercer!
While Australians are still largely shopping in brick-and-mortar stores, online sales have increased by 23.4% over the last year compared to only 4.3% for physical stores.
The pandemic has undoubtedly accelerated the adoption of online shopping and cemented it as a permanent fixture of the Australian retail landscape.
Yet, Aussies still love the tactile and real-life experience in-store shopping provides.
So, to help you decide where to focus your time and resources when starting your business, here are the pros and cons of owning a retail store vs. an online store.
Pros & Cons Of Opening A Retail Store
Customers Prefer To Buy In-Store
A recent study showed that 73% of Australians prefer to shop in a physical location. That’s because they want to be able to see, touch, feel and try products before buying them. Also, some mention preferring to talk to someone directly to get advice on products or services.
It’s Expensive To Set Up
Opening a brick-and-mortar store involves significant spending. Some of the major expenses you'll have to consider when creating your business plan include:
- Rent
- Potential licensing and permit fees
- Store fixtures
- Decoration
- Initial inventory
- Equipment such as POS systems
- Janitorial services
- Signage
- Security systems
Pros & Cons Of Starting An Online E-Commerce Store
Easy And Inexpensive To Create
Creating a website is easier and cheaper than ever with e-commerce platforms such as Shopify, WordPress, or Wix. All you need to do is buy a domain, create an account on one of these platforms, and use their templates to design your website.
A basic plan will allow you to use essential features and start promoting your business online for only a couple hundred dollars a year. Besides, an online store allows you to avoid all the expenses listed in the previous section!
You’ll (Potentially) Miss Out On Many Customers
As mentioned before, 73% of Aussies prefer shopping in-store. So, while e-commerce is booming and habits are changing, only relying on online sales means that you’ll miss out on many potential customers who prefer to try items, feel products, and talk to sales representatives directly about any concerns they might have.
Verdict: Is It Better To Open A Physical Retail Store Or An Online E-Commerce Store?
While the final decision depends on your situation, goals, and budget, combining a physical shop and an online store allows you to benefit from the best of both worlds. You’ll be able to capture sales from both people who prefer to shop in-store for the experience and ability to touch and feel products and time-poor online shoppers who seek convenience.
Whether you run an online store, a brick-and-mortar shop, or both, you’ll want to consider buying business insurance, including Public Liability and Products Insurance, in the event one of your customers hurts themselves due to your business operations.
To find the best insurance cover for your needs, check out our instant quote generator, where you can get an estimate on market-leading insurance in seconds.
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