Running your own business can be both exciting and exhausting. There are so many factors to consider that go beyond cash flow and hiring. Perhaps one of the biggest questions is where and how you want to sell your products or services.
Whether you’re just starting out or you’re exploring new ways to reach more customers, there are ultimately three business models to consider: eCommerce, brick-and-mortar, or a combination of both.
Establishing Your Business Model
When building your business plan, think about where and how you want to sell your products or services. And remember as you go through this exercise to keep one key player in mind: your customer.
Dedicate resources to target audience research before making your next move. Understanding who your customer is, along with their shopping preferences, will make a big difference.
eCommerce vs. Brick-and-Mortar vs. Hybrid
With a deep understanding of your customer, you can confidently move to the next step: deciding on the best format for your business.
As we previously mentioned, there are ultimately three options to choose from: eCommerce, brick-and-mortar, or a hybrid approach that combines the two.
Having an online presence seems to be a rule for organizations to succeed in today’s technologically-driven world. An online presence opens the door for a variety of marketing opportunities and customer touchpoints that are not easily accessible for a business with only a physical presence. Newsletters, email reminders, social channels — these are just a few ways to build a loyal customer base and continue to reach them with your latest and greatest offerings.
Before moving forward with an eCommerce strategy, however, be sure to consider the following:
It was once believed that physical stores would shutter after the massive online shopping boom associated with the pandemic, but the reality is actually quite different. In fact, 87% of retail sales happen within a physical store, and 94% of Americans prefer to shop in physical stores.
A physical shopping location is always a great option when you’re selling items that customers want to physically see and touch (and even test) before they buy. This also makes cross-selling much easier when a customer is perusing in a store instead of looking for a specific item online.
A bonus to the physical location is that customers are more likely to establish brand awareness and loyalty by having a direct experience with your brand.
One thing you need to ensure you plan for with regard to a physical storefront is the actual location. Finding the right location is key. Does your target audience live nearby? Does the location have foot traffic or road visibility? Consider characteristics such as these when you invest in a physical location to ensure you are set up for success.
Some additional considerations for a physical location, include:
Hybrid: A Combination of Online and Physical Shopping
The pandemic rocked our world in many ways, but one silver lining that came from it was the massive growth of buy online, pick up in-store (BOPIS). It furthered the opportunities associated with multichannel shopping, and opened the doors to new and creative ways for businesses to reach and engage with their customers.
Consider, for example, a sea glass-inspired art retailer. A traditional brick-and-mortar location near a beach may be a perfect location to catch those beach-goers and attract them to purchase an item to serve as a memory of their time at the beach. But that cements this artist as a seasonal business.
Introducing an online presence through both social channels and a website that enables online shopping, however, allows this same business to target customers during the off-season. Sharing summer-infused visuals and products can inspire the customer aching for the sea to make a purchase when that friendly email arrives in their inbox. And if they choose to pick up an item in-store during their next beach visit, they may be inspired to purchase additional items on the spot.
The opportunities for greater reach and potentially greater sales are not without costs. A business that offers a hybrid shopping experience will need to balance the costs and expectations associated with both an online and physical presence.
Perhaps one of the most challenging components of a hybrid shopping experience is real-time inventory management; we’ve all encountered a shopping experience that ends in frustration because the product that was promised for a same-day pick-up is suddenly out of stock. More often than not, the customer will go somewhere else to find what they need.
Additionally, ensure you’re taking necessary steps to protect yourself and your customers online, while also ensuring your cash flow can support any unexpected or new expenses.
Deciding the Right Business Format For You
Offering your customers a physical shopping location, an online shopping experience, or a combination of both is entirely dependent on your business goals. Take the time to understand your customers and their shopping preferences, as well as your products and services to ensure you’re confidently making the right decision for you.
Be ready for what comes next. Learn more about how to create a growth plan for your business.
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