Online Vs Offline Businesses: Pros & Cons

Online Vs Offline Businesses: Pros & Cons

Let’s admit it not everyone can really differentiate between an online and offline business. The line between the two is often blurred. And honestly, I believe that knowing what your business is exactly is quite important!

On another note, we know quite well that the online industry is evolving rapidly and businesses need to cope with technology before they get wiped out.

Therefore, I will get you rid of those common misconceptions about the meaning of the terms and will detail the Pros and Cons of each!

I- Knowing your Terms 

“Brick & Mortar” (Commonly known as Offline Business)

The famous and traditional way of doing business: it’s when you deal with your customers face to face in an office or store (that you own or rent).


The small grocery store or the local restaurant in your neighborhood is examples of an offline business.


“E-Business” (Commonly known as Online Business)

It’s mainly when you carry out your business operations using web technologies such as:

  • Intranet: a private network where employees share work-related documents to facilitate collaboration.
  • Extranet: the same concept as intranet except it allows authorized people outside the company to access specific areas in the system. In this case, we would be talking about partners, suppliers and so on.
  • Internet: the global network to reach the mass, target audience, clients, users and so on.

E-business and E-commerce are usually considered to be the same, although they are not. E-commerce is basically the trading part of e-business. In other words, e-commerce is the concept of buying and selling over the internet.


Businesses such as Expedia, Amazon, Makhsoom, and AliExpress are examples of online businesses.


“Click & Mortar” or “Brick & Click”

The business model by which you integrate online and offline operations. This usually includes a physical store and website. When a fashion store or restaurant allowing you to order online opens a website to sell online, then the business is considered as


Brick & Click. Businesses such as Aishti, Exotica and nabilnet are examples of “Brick & Click”


II- Pros & Cons

Now that you know the differences, here is the good and the bad in each of the business models:

“Brick & Mortar”

Pros

  • Increase trust: having a store is like having physical evidence that you are a real company, especially when people are still cautious of web based companies. Also, makes customers feel secure that you are financially stable by having a store or office.
  • Tangible product and services are still the best at conversions: the best way to hook a client into making a purchase is to give them that examination option where they can touch and see the product.
  • Walk-ins: It’s easier for customers to just walk into the store if they like something displayed, or if they have heard someone talking about the cool available collection. Ultimately, offline business increase chances of customers entering the store and by default might lead to more sales.

Cons:

  • High Cost:  renting or owning space demands maintenance and human resources which can cost quite a lot.
“E-business”

Pros:

  • Overcome geographical boundaries: having your business online will definitely be easier to reach customers your target market (Wherever that is) and work on your SEO (Search Engine Optimization) to start getting traffic on your website
  • 24/7 running business: You online business welcomes customers anytime, which means you are welcoming revenue all day everyday!
  • Customer intelligence: Owning an online business gives you easy access to online marketing tools and analytics that allow you to get insights on your customers’ preferences and real-time reports and numbers.
  • Rapid growth potential: retail is much easier if you are doing business online; with a good digital strategy and operational plan you will be able to cater to the growing demand.

 

Cons:

  •  Buying without trying: besides the fact that buying products online can be done without any hesitation, some products like clothes, shoes, furniture and so on  demand physical browsing before making the purchase decisions.
  • Advertising cost: Online Marketing can get your message through to your target audience in no time. However, it requires quite a generous amount to spend especially if you are competing in a concentrated market.
  • Customer Trust: With all the competition around you and easy access to practically anyone it can become very difficult to establish a good reputation especially when there is no face-to-face interaction with your customers. considering a well-thought customer service, with not only live chat features since phone and email conversations can be very effective in building relationships between your employees and users.

“Click & Mortar” or “Brick & Click”

Pros:

  • An answer to all needs: some customers prefer shopping for products before buying and others are more than happy to just browse online and buy. Having both online and offline presences helps you get the best of both worlds.
  • Meet new customers: if your brand is doing well online and you are willing to expand or vice versa, you will get the chance to reach a new customer base who might have not heard about your product or service before and therefore expand your market share.
  • Second chances: whether your customer liked an item and did not have the time to buy it from your store, or whether your customer saw the item online and wanted to double check physically, you are getting that second chance you need to lock down the sale!

Cons:

  • Increased cost: additional expenses are bound to come up either from expanding online or opening an extension offline. It is a challenge to control the cost and you need to make sure you have a realistic budget plan.
  • Operations overflow: implementing online and offline business models will be more demanding in terms of flow operations, staff operations, order, delivery and so on.

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