Join Whitney Johnson for an in-depth discussion in this video Deciding between online vs. brick and mortar, part of Entrepreneurship Foundations.
- Let's say you have your business plan ready, you know who your customers are and what you're going to charge them. Now it's time to set up shop. The question is, "Bricks and mortar, online or both?" It depends. Some businesses require a physical presence. Bricks and Mortar refers to a physical space, store or office customers can walk into during business hours. Bricks and Mortar being a figure of speech that derives from the traditional materials used in the construction of buildings.
If you require a storefront, you're going to start a spa for example there's no question, a physical space. When it's not so clear as you in have a consumer product or service that could be sold entirely online, in addition to web presence, do you also set up a store or push for retail distribution? My recommendation is start online if at all possible. The start up and overhead costs are significantly lower, frequently an order of magnitude lower.
You'll still have to work hard to acquire customers, but if you make the right amount of noise you'll have more people visiting your business than could possibly visit a physical space. And if you aspire to retail distribution or an actual storefront at some point, think of an online presence as your minimum viable product which is what online retailer Shabby Apple did. It seems obvious today but in 2006 when the site launched, it wasn't. Because Shabby Apple, a designer of shabby chic dresses, bypassed wholesale and retail distribution selling directly to customers online it became profitable quickly.
Only now seven years later with over two million dollars in online sales are they contemplating a storefront. If and when you decide on a Bricks and Mortar approach, here are a few things to consider so that you are more than a showroom for Amazon. The first step is to choose a specialty. Find a niche and cater to the enthusiasts. Specialize in something you know well, your distinctive strength and then offer exclusive items, events tied to goods or services tied to those goods.
For example, Best Buy's Geek Squad will install a home theater at a deep discount. It is essential that you offer something that Amazon or other large businesses cannot provide. The second step is to curate your inventory. Whereas an online retailer has the largest possible selection because it isn't constrained by inventory capacity. Too many choices can lead to shopper paralysis. Because you're the expert you whittle down the options, stocking only the best solution products.
The third step is to place an emphasis on noncommoditized items. Sure, you'll carry some mass produced items but focus on those that aren't, providing the best products at different price points. Also look for ways to provide additional value even something simple like a lollipop. The fourth consideration is to have a great website. Even though customers may want the gratification of shopping locally they're probably still going to check you out before they show up. Make sure they can find out when you're open, see images of your inventory and size availability and information about your return policy.
They may even want to know that you would deliver the product today. The fifth consideration is to emphasize exclusivity and/or privacy. Sometimes customers want their service or product providers to cater to their taste to feel that they have been invited to the club. Meanwhile Amazon may be able to give good service because it's tracking your every online move but it's also tracking your every move. When you purchase at a local retailer the transaction is relatively anonymous.
The final and most important consideration is to hire only superb customer facing employees employees who are knowledgable perhaps enthusiasts empowered to make it right for the customer always. Whether on or offline, customer experience is your battleground. The entrepreneur that can provide the most frictionless experience at the lowest cost will be the victor. What's going to work for you? Clicks or bricks?
- Cite the steps that can help you find an unmet need.
- Differentiate between a business and a hobby.
- Recognize how to decide between an online business and a brick and mortar business.
- Describe how to protect your intellectual property.
- Explain the best practices for hiring the right people.
- Recall the importance of tapping into networks of expertise.
- Cite the best practices for building a business website.
- Summarize the best metrics to use for your online business.