Expanding Your Online Store to Brick-and-Mortar

by J.B. Maverick

2 min read

A number of successful online ecommerce small businesses eventually consider expanding by opening a brick-and-mortar retail store. An example is the health and beauty retailer, Well.ca, which decided in 2016 to open a retail shop in Toronto. There are some clear advantages to having a “real world” presence. For example, studies show that physical stores where customers can personally interact with sales staff enjoy up to a 20% higher conversion rate. There are a number of factors to consider — both positive and negative — in making the decision about whether to expand your business from online to brick-and-mortar.

Advantages of a Retail Location

Having a multi-channel business obviously offers advantages, such as increased reach, over selling your products through a single channel. As previously noted, a retail storefront affords the opportunity for salespeople to interact with potential customers to a significantly greater degree than is possible with a strictly ecommerce operation. Retail stores also offer the advantage of customers being able to see your products in-person and handle them, which is generally more convincing than any online photo. With a retail store, you can conduct sales operations that simply aren’t available online, such as in-store demonstrations. A retail store may also offer your small business the chance to develop the patronage of more local residents where your small business is headquartered. A physical storefront also generally raises the overall profile of your brand image.

Primary Factors to Consider

There are definite, sizeable obstacles that have to be not only overcome, but handled well in expanding to a retail storefront. First, you should realize that running an online business and a retail business is roughly equivalent to operating two separate businesses, so you should seriously consider if you can give adequate attention to both. The obvious consideration is cost. No matter how small or simple, a retail store requires a major capital investment. Commercial leases often require a multi-year commitment. Another significant cost is staffing your store, which requires not only paying employees, but also abiding by all applicable hiring and employment laws wherever you decide to establish your retail location. Hiring retail employees is different from hiring online employees whose primary skills may consist of IT and web-related expertise. Since your retail employees will be personally interacting with customers, their ability to do so well is a major consideration. Factors such as the ability of your employees to get to work during inclement weather may also be a consideration. Location is another key consideration for setting up a retail store. In a big city, the difference between the success and failure of a retail store can be a matter of a few blocks. Try to identify where many of your existing online customers do their real-world shopping. Since retail stores have limited space, it’s important to carefully consider what kind and level of inventory you can carry. You may not want to make all of your online products available in your retail store, due to space limitations. You also have to carefully design the store layout to be maximally effective at drawing in potential customers and converting them to actual buyers.

References & Resources

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