Our lives have changed greatly since the internet, including our retail shopping behavior. Nowadays, almost every retailer has an online store, so clients can shop wherever they are. However, this second universe introduces a visible gap between online and in-store shopping. In this blog post, we will explore the differences between online and in-store and how to combine the two to get the most out of each.

The differences between online and in-store shopping

Inventory visibility

Online stores have much more visibility as the sale point is usually integrated with the inventory management systems. On the other hand, offline or in-store retailing often lacks visibility since they still rely on periodic manual counts and less advanced systems involved, leading to discrepancies between actual stock levels and recorded levels.

Storage and warehousing

Online retailers usually take advantage of one centralized distribution center that stores and fulfills all purchases. But unlike the online store, brick-and-mortar stores must have their stock available in each location. This complicates inventory management as each location must have the entire collection with a full set of sizes, and items should be replenished frequently to avoid out-of-stock and sale losses.

Stockouts and overstocks

Usually, online retailers find it easier to monitor and adjust inventory levels to avoid stockouts and overstocks by using analytical tools. In addition, with online stores often having access to their entire inventory, stockouts are less common than in brick-and-mortar stores that depend only on what’s available in store. With this, brick-and-mortar stores tend to overstock due to the fear of stockouts.

Demand forecasting

In-store and online stores are also different in their forecasting abilities. Unless clients are registered to some membership, an in-store retailer cannot tell who the client is. This makes it difficult to predict future behaviors nor forecast demand. Moreover, when the inventory isn’t accurate, it’s harder to draw conclusions from it. The online store on the other hand can have more information about the client, such as age, location, how they reached the store, what they looked at, etc. This makes for easier forecasting as more information is available to decision-makers.

Customer behavior

Another amazing ability online retailers have is better customer behavior tracking which can provide better insights. While you can’t really expect employees to follow customers around the store and report every action they make, online sites can actually do so automatically! For example, what tabs they opened, what items they searched, how long they looked at each item, and what was eventually purchased. This is very powerful because it helps retailers sell more by understanding their client's behaviors and wishes.

Although we made a clear separation between the two shopping ways, in reality, clients combine the two to make up their own shopping experience, in what's called a phygital or hybrid shopping experience. This is a set of behaviors that create a synthesis between online and offline shopping. One common example is to check products and availability online before going to the store. Or the opposite, checking or trying on items in the mall but purchasing online at a later time.

By combining offline and online retailing, also referred to as an omnichannel approach, companies can achieve maximum results.

How to bring online and in-store together to increase sales

Unified inventory management

Implement a single, centralized inventory management system that synchronizes stock levels across all channels and the entire supply chain. This ensures customers see accurate product availability whether they shop online or in-store and allows you to get full control from end to end.

Click and collect (BOPIS)

Allow customers to shop however they like wherever they are. A common practice that helps retailers provide a smooth shopping experience is the option to click and collect; to shop online and pick up at the nearest store. This allows clients to save shipping costs and ensure the item they like is reserved for them, and in case they don’t like it, they can return it on the spot.

Ship-from-store

Some retailers ship items from their main distribution center only. This isn’t ideal since many clients live near stores but not necessarily near the warehouses, making clients wait longer for deliveries. Moreover, in case an item is out of stock in the distribution center the order will be canceled while the nearby store may have the item available. So having the ability to ship directly from the store can improve customer satisfaction and grow sales.

In-store technology

To bridge the “data gap”, many brick-and-mortar stores started integrating solutions such as RFID that enable them to track activities taking place in-store. For example, how many times a certain item was in the fitting room area, how many ended up purchased, etc. This allows retailers to improve their overall data collection to make wiser decisions.

Consistent branding and data integration

Providing a smooth experience to clients means no channel comes ahead of another. For instance, if you have discounts only on-site or only in-store, clients can be upset. Also, if you provide some kind of membership or loyalty program it’s important to let clients enjoy it in all channels and not only when shopping online or in-store. This will give your clients the freedom to shop however they wish and come back more frequently.

In conclusion, the ever-evolving landscape of retail has presented us with distinct disparities between online and in-store shopping experiences. However, the future lies in the seamless fusion of these two realms, as customers increasingly adopt a phygital approach. By effectively combining online and offline retailing strategies, you can create a cohesive, customer-centric shopping experience that maximizes sales and customer satisfaction while capitalizing on the unique advantages of each channel.