Digital Business vs. Brick and Mortar: Where the Money is Now

(MENAFN)

The business world is evolving at a rapid rate as more technological innovations are introduced into everyday life. This has led to entrepreneurs trying out new ways of doing things—digital enterprise models—alongside the traditional methods.

While these changes haven’t totally eradicated the ways things were done, we have seen some challenges from new innovations like e-commerce, online shopping and online stores. This new enterprise model has shown that it can offer customers convenience and 24/7 accessibility. It is also less financially consuming as compared to brick and mortar businesses that often require a substantial investment in rent, inventory and staffing.

So as someone who wants to go into the business world, what is the best way to thrive? Where is the money now? To answer this, we would look at the merits and demerits of both models while also helping you understand where the real financial opportunities lie today.

What are Pros and cons of running a business online

As it stands, we have to admit that running an online enterprise comes with several advantages over brick and mortar stores. Here are some of the most notable pros and cons of going digital.

Pros of going digital:

●     Low Setup Cost: This is usually because of the low setup cost it requires—especially since there’s no need to pay rent on physical locations or rental shops.
 

●     Global Reach: Online enterprises are not restricted to a specific location and as such they can reach a global audience. This allows for more business growth where they can render their products or services to consumers regardless of their locations thereby making it highly scalable. According to stats, “e-commerce accounts for 19.9% of global retail sales as at 2024 with projection expected to reach 23.7% by 2030”.
 

●     Automation and Data Driven Insights: With the current state of innovation, online ventures have been able to use tools in automating their business. They have also improved on customer retention by using data driven tools that analyze shoppers’ behaviour, optimize online retail strategies while improving customer experience.

However, we also have to consider some of its disadvantages which include:

●     High competition: Online ventures are booming and this has led to a lot of competition as the entry level is a bit low. So standing out can be quite challenging for new brand owners.
 

●     Trust Issues: Due to the absence of a physical store, customers can find it hard to trust a new enterprise that’s just growing its identity. Most times, shoppers want to get a feel of what they are purchasing and without this, they may become skeptical about their decisions.
 

●     Business Model Suitability: We also have to mention that the online model is not ideal for all types of enterprises. Some retailers require transacting in person or rely on face to face customer services that cannot be replicated online.

All in all, we have to admit that these pros and cons are essential in the decision making of whether to start an online venture. However, most experts believe that a hybrid approach helps combat the cons while also promoting the pros.

The startup path: online or offline

As an entrepreneur looking to startup a business, the most important decision to make lies on your establishment’s  model. Since an online venture allows entrepreneurs to launch quickly with minimal rent or investment in physical stores, they can begin selling online or through an e-commerce platform in no time.

They also get to have an all in one system that allows them to have total control of the organization without needing too many staff. From there they can scale easily and customer service can be automated for efficiency.

In contrast, if you want to start a brick-and-mortar outfit, you would require careful planning for the one or multiple physical locations. This also means that you’d need to hire more hands and manage in-person customer service.

A brick-and-mortar business can excel with face-to-face customer service and a strong customer experience, particularly in industries where consumers prefer to inspect products and services before purchase.

So, the final decision between online establishments and brick-and-mortar stores lies on the target consumer, budget, and long-term goals. While some retailers opt for an omnichannel approach, combining one physical location with a robust online presence, to enjoy the advantages of both models.

Money traps to avoid

Every successful business idea requires a start-up capital that would help bring it to fruition, however, there are usually financial pitfalls that could such up the funds. This is the same for both online and offline businesses.

For most brick and mortar stores, the cost of rent for multiple locations stores could become a huge financial disadvantage in the long run. There’s also the issue with overstocking inventory which can strain finances especially if shoppers don’t follow through with purchases.

Online organisation also have traps which can come in the shape of overspending on digital ads, neglecting online presence, or relying solely on automated customer service. Failing to provide opportunities for face-to-face interaction, even virtually, may reduce trust and engagement and thereby lead to the loss of start up funds.

This is why it’s essential to understand these money traps and plan carefully so you can balance your investment between physical stores and online sales.

Things you need to do absolutely right

As a new entrepreneur trying to break into the commerce world and make money, there are certain things that are non-negotiable. So here are a some of the things you need to get absolutely right:

●     Consistent customer experience: This is an integral part of your organisation and you have to ensure that you pull all the stops to make it happen. According to the founder of Land’s End, Gary Comer, : “Think of one customer at a time and take care of each one the best way you can.”
 

●     Manage cashflows and operational cost: To succeed, you have to make sure that you manage your cash flow and operational costs. This includes the funds spent on rent for brick-and-mortar stores and the digital marketing campaign you undertake for your online retail outfit.
 

●     Invest in building trust: Ensure that as you grow your customer base, they get to have trust in whatever you offer. So, if you decide to switch up your approach, they can easily adjust with the new changes.

Other things to do right include;

●     Focus on product and services that meet real consumer needs

●     Choosing the right enterprise model for your goals

Comparison of online and brick and mortar businesses

There are several factors that contribute to the differences between online and offline brands and an important factor is scalability. This is because an online brand can reach a wider audience without the limitations of physical location.

We can see this with how the casino industry is run where online casinos and affiliates offer convenience and digital access which lets the players enjoy their services from anywhere. A good example is what Slotsjudge is doing with their services where they offer visitors some of the best online slots reviews out there. These reviews help gambling enthusiasts find some of the most trusted platforms that offer rewarding slot titles. This level of detail is a major advantage to online businesses as it builds trust and helps users make informed decisions.

This is not the case with traditional casinos, as they mostly rely on players walking into their physical locations and enjoying the gaming atmosphere. They are also able to provide face to face customer services and a physical presence that caters for everyone regardless of their digital accessibility. However these brick and mortar casinos require heavy investments in acquiring physical locations to service their customer base.

These slight differences have prompted many retailers to adopt the hybrid approach where they offer their customer base access to physical and online stores.

Internet lifestyle vs. Traditional lifestyle

At the end of the day, the decision on choosing an Internet lifestyle or a traditional approach can be seen in how consumers approach most organizations today. The brands that offer online services enjoy more convenience, flexibility and the ability to manage multiple online stores without spending so much on personnel.

This mode also allows them to work from any location while shoppers get easy access to their products. Just like Tolman Geffs, Co-President of the Jordan Edmiston Group said, “People don’t call it ecommerce anymore. It’s called Omni-commerce, and it’s the idea that digital permeates every step of the purchase chain, from product discovery, to trial, to pricing, to actual purchase.”

In contrast, a traditional approach involves boxing the enterprise into a rigid and fixed location that is usually cost draining. There’s also the stress of managing physical presence, delivering front facing customer services and security. This is often less flexible for everyone involved, however, it offers tangible interactions and a stronger local community. 

MENAFN27092025008435017657ID1110118258