Online shop vs physical store: why both are critical to the future of retail

Marc Allsop
blog featured image

Despite all the rumors, the high street isn’t dead. It never will be.

It’s suffered from the rise of online shopping and the Covid-19 pandemic – 16,906 stores closed in 2020, and sales shrunk by 11.1% – but that doesn’t mean physical stores are going to fade away.

Just over a quarter of all UK retail sales were made online this March. That’s a drop from the peak of 37.1% back in February 2021.

How people shop has naturally evolved as more options have become available. Some consumers prefer to shop online, some in-store, and some a mixture of both. And sometimes, their preferences change depending on the product. It’s much easier to buy a replacement lightbulb online than a new sofa which you need to try before you buy.

How retailers stay relevant, manage each channel, and bridge any gaps is crucial to future success. It’s not necessarily a question of online shop vs. physical store, but how both can work together.

Online and in-store: the positives and negatives


Being able to order a product anytime from anywhere with an internet connection is a huge benefit of online shopping.

Shoppers who live far away from a shop, rely on public transport, have mobility issues, or just don’t feel like making the journey don’t have to worry about travelling. Store opening times aren’t an issue either, so it doesn’t matter if you work unsociable hours or prefer to browse on your phone in bed at night – you’ve got a shop in your pocket whenever you want it.

Cost and choice

Customers usually pay for delivery and are sometimes charged for returns. Paying for the convenience of this can get expensive, especially when ordering from more than one retailer. But it can save some consumers money on travel expenses, and others don’t mind paying extra for the convenience of online shopping. It all depends on the person and situation.

Physical stores can be cheaper if you’re not sure what you need and would have to buy multiple options online. If a consumer wants to order a new item of clothing, they might buy it online in different colors and sizes to see what fits best. This can make them spend more upfront than they’d like to and leave them with money tied up in unwanted items while refunds are processed. This can also be costly for the retailer who has to have contracts in place with shipping companies to provide returns for purchases made online.

When it comes to the level of choice, you can’t beat shopping online, even with a flagship store. In the clothing market especially, a wider range and volume of sizes are available online. In-store, you might not come away with what you need because the product ranges and stock levels vary by store size and location. Sometimes it’s possible to check stock levels before visiting, but that’s not always accurate.

Read the 4-step marketer's guide to retail data analytics. Discover how to  transform your data into targeted marketing. 

The shopping experience

Online shopping can’t replicate the experience of going into a physical shop. The benefit of seeing products in person adds a sensory dimension to shopping. Check the size of the saucepan, find out how comfortable the sofa is, feel the fabric of the jumper, test the weight of the duvet, and so on. Online, this experience only exists through images and descriptions. These can be great indicators that a product is suitable, but don't compare to physically holding, touching, trying, or seeing it up close. If a brand is solely online, pop-up shops and experiential campaigns can help potential customers to get that in-person experience.

Shopping in a physical store allows for more personal interactions, too. Customers can talk to employees who can help advise what product will meet their needs. Chatbots can enable some level of online customer/employee interaction, but can't replicate the experience of having a face-to-face conversation.

There’s also more of an opportunity to increase brand awareness with physical stores. The visibility of a brand name can increase recognition, and stores can emphasize their branding with the use of colors, scents, design, lighting etc. With a guaranteed footfall past stores, potential customers will become more familiar with a brand.

The psychology of buying

People buy because:

  1. They want something
  2. They need something

Buying something might boost their confidence, mark a special moment in their life, or simply meet a need like putting food on the table or buying medicine for their hay fever.

Regardless of why they’re buying, the experience the customer gets when they buy and use a product will affect how they perceive the brand. If they’re pleased by the product and it meets their needs, they’re more likely to be loyal to the brand and draw from a positive experience next time they’re looking to make a purchase. If it disappoints them or doesn’t work, that’s going to leave a bad impression.

Retailers need to know what makes people buy and why they’re buying. That way, you can sell to them appropriately on every channel. It’s all about putting yourself in your customers’ shoes.

The future of retail

Forget online shop vs physical store. The future isn’t about rivalry, it’s about harmony across channels. It’s crucial to deliver a consistent customer experience to keep your customers happy. Retailers need to:

Personalize and engage

71% of consumers expect companies to deliver personalized interactions. It’s critical to treat each customer as an individual regardless of the channel they’re using. Accessing, analyzing, and using customer data to provide smooth and personal interactions, offers, and campaigns is the difference between having loyal customers and losing customers. Personalization is the key to winning the hearts and minds of your target audience.

Customers need to feel engaged with and excited by a retail experience. Retailers can do this by informing customers about new products they’ll be interested in and making customers feel that they’re getting good value from their shop. If retailers share how much a customer has saved and provide them with personalized offers, it can mean a lot for customers, especially with the rising cost of living.

Be prepared for omni- and cross-channel

A customer will choose which channel to buy from based on the product they’re looking to purchase, their location, time constraints, etc. Retailers need to flex to meet their needs and understand that when it comes to their expectations, they don’t differentiate by channel in the same way as stores. They might buy something online and pop into a store to return it – retailers need to be prepared and have the right infrastructure in place to give the customer a seamless experience.

Think in 3D

Customers need a way to experience, see, touch, and feel products. Think about how you can bring the physical to the customer to provide them with a better experience. This could be through pop-up shops, samples, direct mail, or experiential campaigns to give them a better sense of what the product is like in real life.

What to do next

Whether you’re operating in-store, online, or across both, you need to give your customers a consistent, personalized experience. The more channels you have, the more flexibility you can offer your customers and the more opportunities you have to leave a positive lasting impression.

The convenience of online shopping combined with the physicality of in-store shopping contributes to customer satisfaction. You need both to secure sales and loyalty into the future.

New call-to-action


Sign up to our blog digest for the latest articles straight to your inbox