In-store vs. online shopping: Which channel do consumers prefer during the holiday season?

Written by Mary Berko on November 9th, 2022

Thanks to the Covid-19 pandemic, inflation, and shifting customer expectations, figuring out what shoppers want has never been harder. With the holiday season approaching, retailers will need to be extra meticulous with their selling strategies to truly meet their customers where they are.

Surveys indicating increased online shopping are at odds with reports of an expected uptick in physical store visits this season. New research from Wunderkind suggests that over two-thirds of US customers plan to shop online for their holiday gifts; however, Bluedot’s survey found that consumers ranked in-store shopping as the top retail method for 2022.

Either way, customers are looking for discounts and deals, hoping to save money during a time when high price tags on everything from grocery shopping to gifts are looming.

While we may not have a true idea of which channel has the upper hand this holiday season, the real question is, what can brands do to satisfy all of their customers?

The answer can be found in omnichannel retail. Instead of focusing on whether customers prefer online shopping vs in-store shopping, online merchants can help provide the best of both worlds.

Though there are advantages to both online and offline retail, an omnichannel approach allows brands the opportunity to reach (and delight) more customers. This blog is going to explore the pros and cons of online vs. offline during the holidays – and why omnichannel retailers have a definite edge.

Advantages of shopping in-store shopping

There’s nothing quite like an in-store shopping experience. It can feel as though the store is designed just for you, with a nice path for your shopping journey; whereas online shopping can feel a bit overwhelming with all the products and pages to flip through.

• Being able to touch/see products. Even with the recent virtual reality ‘try-on’ innovations, online shopping doesn’t hold a candle to the convenience of being able to touch, feel, and sample products before purchasing.

• More impulse purchases. When customers are walking through aisles or waiting to check out at a cashier, there’s an increased opportunity to physically interact with items. That means if a customer has their eyes on one item but another one catches their attention, they’ll be more inclined to add it to their shopping list. In fact, 8 to 10 in-store shoppers have made an impulse purchase, while 67% have bought multiple items when making impulse purchases.

• Don’t have to worry about shipping costs. Many retailers offering free shipping need to find a way to front the costs – either by impacting their profit margins or from consumers. No shipping? No shipping costs! Customers shopping in-store get to take their products home with them the very day they complete a purchase, and brands don’t have to worry about shipping expenses.

• Easier handling of returns. When a product is bought within a store, all a customer needs to do to return an item is bring it back. There’s usually a customer service desk or an associate who can help them out, which proves to be much easier than having to print out a return label and ship a product back themselves.

Disadvantages of in-store shopping

While interaction with products is always a plus, there’s still the commute and overall time and energy to take into account when going to a shop. For those on a tight schedule, or with little desire to see other humans, online shopping could be more promising.

• Inconvenient store locations. With the increasingly more digital era that includes working remotely, connecting remotely, and shopping remotely – customers may be less inclined to travel long distances to get to stores. With malls a good distance away from most towns, there’s a huge disadvantage. The convenience of buying items without ever leaving the couch is just too tempting.

• Stockouts. When a product is out of stock in person, it hits a bit differently than online. First of all, the customer has likely traveled to get to the store, and if they find an empty shelf instead of the specific item they had in mind, it could be devastating. This is a much different experience than the online space, where there’s usually a notification button for receiving an email when the item is in stock again.

• Congestion/difficulty navigating store spaces. After a few years of social distancing, many consumers are still wary when it comes to getting too close to strangers. If a store is overly crowded with aisles that are a bit too narrow, it could turn potential customers away. Or, if the store itself isn’t set up in a way that’s easy to navigate, customers could become frustrated, never finding what they’re looking for.

Advantages of online shopping

Apart from less gas spent on traveling and the ability to shop in our pajamas, there are plenty of benefits for consumers who choose to do their shopping online. Whether they’re looking to save time, money, or both, online shopping offers instant gratification and almost unlimited time to browse.

• Deal hunting/brand comparisons are easier online. In 2022, most consumers are looking for ways to save. Imagine having to check the price tags of multiple in-store items, keeping notes on a piece of paper, and driving from one store to the next. Online shopping makes this process a whole lot easier. With just a few tabs open and some extra time to spare in front of the computer, shoppers can compare and contrast as much as their hearts desire.

• 24/7 access to shopping and purchasing. Browsing shoes before work at 7am? No problem. Searching for sweaters after the kids are in bed? Even better! Online purchases can be made at virtually any time, which is a huge draw for both busy parents and young adults managing a hectic schedule.

• Access to a bigger pool of potential customers. While brick-and-mortar stores only get a certain amount of foot traffic based on the time of day and their location, the opportunities for traffic to an online site are endless. Online shoppers typically jump from store to store, researching and reviewing until they find what they’re looking for. With so many customers scouring the web for products, online merchants have the upper hand in gaining more potential customers.

• Social media offers great product/brand discovery opportunities. A lot of social media is geared towards online shopping rather than in-store shopping. Typically, posts or ads include links that bring customers directly to the product online – turning a simple scroll into the beginning of a buying journey.

Disadvantages of online shopping

The biggest disadvantage of shopping online comes from being physically removed from the product and the store. The results? Online retailers will need to work harder to build customer relationships and deliver a seamless experience.

• Difficulty testing products. Online stores, unless they are offering Try Before You Buy, will always have a disadvantage when it comes to testing products. No matter how many reviews a customer reads, or how in-depth a sizing guide is, there’s a chance that cute pair of jeans just won’t fit comfortably or may even look totally different in person.

• Expensive shipping and delivery. When a package is delivered from a warehouse to a customer’s doorstep, somebody is fronting the costs it takes to move that package along. Whether it’s the brand or the customer, shipping fees can become quite expensive depending on the time of year and the desired speed.

• Less immersive brand experiences. Just like the human connection is more difficult through a screen, immersive brand experiences are harder to facilitate fully remote. Where a store can have ambient lighting, music, and even a particular smell – online stores don’t have these same added touches to help build out the customer experience.

The power of omnichannel: Combining the best of online and in-person shopping

What is omnichannel fulfillment?

An omnichannel fulfillment strategy is when retailers have the flexibility to sell their inventory through multiple channels. No matter what channel the customer has purchased from, an omnichannel fulfillment strategy streamlines the journey by processing all inventory in one system across all channels.

The results? A faster, more satisfying customer experience. Don’t believe us? A study by Bazaarvoice found that almost three-quarters of customers prefer hybrid retail over shopping wholly online or in-store – particularly a favorite among younger generations.

So, what’s the big deal about omnichannel fulfillment? Why do customers love it? Simply put, omnichannel fulfillment gives consumers multiple options to choose from – meaning they have more control over the experience they want.

For example, if a customer needs a product on the same day as they order it, an apparel brand with an omnichannel fulfillment strategy could offer that customer the ability to pick up their new purchase in-store, rather than waiting for shipping.

What does omnichannel retail look like in practice?

BOPIS and in-store pick-up

‘Buy online, pick up in store’ is an online to offline shopping strategy where customers can cut the inevitable waiting period between purchase and delivery almost completely out of their buying journey. Instead of choosing a shipping option with an estimated delivery date, customers opting for BOPIS can drive to their chosen store within a few hours to pick up their purchase.

In-store returns

Online to offline shopping doesn’t just include the shopping journey – it also comes into play within the post-purchase experience as well. If a brand has physical stores as well as an online presence, they may be able to offer in-store returns for online purchases.

This means a consumer can purchase a product online, and if they find it doesn’t fit well or isn’t what they were looking for, they can bring it directly to the store to return. No return labels, no mailers – just a simple drop off at the store.

Online research before arriving at a brick-and-mortar store

In this highly digital age, reviews are everything. A customer might be researching and reviewing a brand’s products for days (or weeks!) before they actually decide to make a purchase. If they’re headed to do some in-person shopping, they’ve likely already spent a decent amount of time on the brand’s website, social media pages, or review pages.

Retailers can take advantage of this consumer behavior by ensuring a consistent brand experience from their online to in-person environment, or even incorporating discounts and flash sales that customers might receive online (pop-ups on their site or newsletters) to use in store.

Social commerce

Did you know that worldwide consumers use social media on average about 147 minutes per day? Social commerce is the epitome of meeting consumers where they are – scrolling through social channels with their mobile devices.

Social commerce, also known as social shopping, is an omnichannel selling strategy where customers can purchase products directly through their favorite brands’ social media channels. Instagram, Facebook, and TikTok have all implemented digital storefront options which give brands the opportunity to showcase their products for sale in-app.

Showing inventory levels online at physical locations

In recent times of supply chain woes, brick-and-mortar shoppers seem to be playing a game of luck when they visit a store. Will their favorite type of shampoo be available today? Will the shelves be stocked… or barren?

Brands who have both in store shopping and online shopping could potentially qualm some of those worries with the simple trick of inventory visibility. Showing inventory levels of physical locations gives consumers the opportunity to jump in their car and grab an item before it’s completely out of stock.

How to develop an omnichannel fulfillment strategy

Choose your channels wisely

It wouldn’t be wise for a digitally-native brand to completely ditch their site and push their customers to shop in-store. Ultimately, your selling channels should meet your audiences where they already are. If you have a lot of sales coming from mobile devices, it may be time to look into social commerce, or at least optimize your website for mobile selling. Let the data drive your decisions for which channels to focus on… and choose wisely!

Make sure your WMS is up to the challenge

Your e-commerce technology plays a huge role in a killer omnichannel fulfillment strategy. If your WMS isn’t able to seamlessly integrate with your online site, your brand may be missing out on some valuable real-time order data and inventory visibility that drives a great omnichannel experience. Make sure your WMS and supporting platforms utilize the API economy to ensure automatic, to-the-minute updates.

Create a consistent customer support strategy

Customer success should be the same for every channel. Whether your audience shops online or prefers brick-and-mortar stores, your support team should be well equipped to meet the needs of your customers both in-person and online. For retailers, this means having consistent customer support like chatbots or live messaging online is just as important as ensuring store associates are ready to lend a helping hand.

Partner with a 3PL

An omnichannel fulfillment strategy has an incredible number of moving parts. To ensure the best customer experience every time, brands may find it beneficial to partner with an experienced omnichannel 3PL who has not only industry knowledge, but also scalable fulfillment technology. Partnering with a logistics provider can ease some of the complexity of omnichannel fulfillment, leading to an overall smoother operation for brands and consumers alike.

Online vs. in-store shopping: The verdict

The question is no longer in-store vs online shopping. Instead, it’s ‘where are my customers?’

It may seem like a simple question, but it’s actually quite difficult to predict exactly where your customers will be this holiday season… which means it would be highly irresponsible to put all of your eggs into one basket.

Opting to go the omnichannel route is the safest bet for retailers, no matter the vertical, as it gives customers the best of both worlds: online and offline.