Should You Open an Online or Offline Clothing Store?

Have you finally decided to pursue your lifelong dream of owning your own clothing business? If you’re just starting your entrepreneurial journey, one of the first decisions you’ll have to make is where you’re going to sell clothing. 

Will you open a traditional brick-and-mortar boutique or opt for an ecommerce store? What about a combination of both?

In this article, we offer an in-depth comparison of running online vs offline clothing stores so you can choose the best match for you. You’ll find out which option makes more sense in terms of cost, flexibility, marketing and more. 

And if you want more advice, check out our article on how to start a clothing boutique. 

Whola is a wholesale marketplace that makes it easy for online and offline fashion businesses to buy hot-selling inventory with just a few clicks. SIGN UP NOW and start shopping for the newest styles from our 90+ unique Australian brands!

OPENING AN ONLINE VS. OFFLINE CLOTHING STORE: WHICH IS BETTER?

Deciding whether to open an online or an offline clothing store is not a simple choice: both have their advantages and disadvantages. 

The right option for you will depend on your CUSTOMER AVATAR, what products you plan to sell, and the direction you want your business to go.

Let’s compare online and offline stores to understand which one is better for your fashion business.

THE ADVANTAGES OF ONLINE CLOTHING STORES

In recent years, online shopping has become an essential part of everyday life for many people across the globe. Its convenience and accessibility have transformed the way people purchase anything, from groceries to clothing. 

Additionally, in the past year and a half, the popularity of online shopping increased dramatically. According to a 2020 SURVEY on consumer ecommerce behaviour in Australia, 15% of respondents started online shopping because of COVID-19. The study found that around 2.5 million Australians shopped online for the first time during the pandemic.  

Online shopping is clearly here to stay, but what advantages does an online store have for you as a business owner? 

LOWER STARTUP COSTS 

One of the biggest advantages of setting up an online store is that it has significantly cheaper startup costs than a physical store. Building an online shop is essentially creating a website; you only need to pay for the following things: 

• Domain: starts from as little as $30 PER YEAR.
• Web hosting: between $150 AND $500 PER YEAR.
• Ecommerce website development: between $8,500 AND $20,000, depending on your requirements and the complexity of your store. However, if you have time to learn new skills, you can build a simple website yourself for a much lower cost. Here’s HOW TO GET STARTED WITH SHOPIFY, for instance.

On the other hand, setting up a physical store requires paying for rent, staff, utilities, etc (you’ll find an estimate of these costs below). This means, if you open an ecommerce store, you’re not spending an enormous amount of your budget straight away. Plus, you can set it up faster and start selling clothing items straight away.

FLEXIBILITY AND CONVENIENCE

Not only are online stores convenient and flexible for customers, but also for owners. Firstly, you can choose exactly when and where you work; you can adapt your working hours to your busy schedule and work remotely, from the comfort of your home or on the road. 

Secondly, you have more flexibility to choose in which markets to sell your clothing. An online store allows you to expand as a global fashion business: you can offer nationwide or even worldwide shipping to expand your customer scope. 

ABILITY TO COLLECT CUSTOMER DATA 

With an online shop, you can collect customer data to make the most of your business performance. You can optimise the shopping experience by monitoring your customers’ shopping behaviours. 

What’s more, data collection allows you to retarget your customers through online ads and email campaigns. Retargeting is an art of its own, but once you master it, you can use it to boost your conversion rates and increase your profits.

THE DISADVANTAGES OF ONLINE CLOTHING STORES

HIGHER MARKETING COSTS

As you don’t have a physical clothing store, you won’t have the space to represent your brand. Instead, you will probably have to run online marketing campaigns to increase traffic to your online store. 

While running ads on popular social media platforms like Facebook and Instagram can be a lucrative strategy when done right, they may not perform well at first. You could lose a lot of money if you don’t have experience in digital marketing. 

Similarly, Google ads can be quite expensive (especially if you’re targeting competitive keywords), and it can be hard for small businesses to outbid ecommerce giants like Amazon. 

HIGHER PRODUCT RETURN RATES

One of the main things missing from the online shopping experience is the ability to see, touch and try on clothing items. Sometimes, a style looks different in real life than in the picture customers see online, or it may not be true to size. 

As a result, it’s more likely that customers end up returning products purchased in online stores. As a store owner, this can impact your earnings, especially if you offer free returns and exchanges.  

Now that we know the pros and cons of online clothing stores, let’s take a look at what offline stores can offer. 

THE ADVANTAGES OF OFFLINE CLOTHING STORES

Although online shopping has become the latest purchasing phenomenon, physical clothing stores are still thriving. According to RECENT RESEARCH BY TOLUNA, 59% of Australians still prefer to shop for clothing in-store. 

Offline stores offer a real-life shopping experience that online stores can’t. For many customers, this is simply the best way to shop: they can feel the fabric, try the clothes on for size and be assisted by store clerks in person. But, what advantages does an offline clothing store have for owners?

A PHYSICAL SPACE

Having a physical space for your business automatically represents your brand and acts as a permanent marketing asset. 

Potential customers may pass your store every single day, and your current ones know exactly where to find you. 

As a result, with a physical store, you’re much less likely to need any sort of costly online marketing campaign at all.

LOYAL CUSTOMERS

The great thing about having an offline store is that you can build your customer relationships to ensure loyalty. By having real-life interactions as well as offering exceptional customer service, you’ll be able to wow your customers and offer a truly personal shopping experience. 

What’s more, the past few years have seen a major boom in “holistic retail”. Fashion stores are becoming more than just places to spend money: they’re turning into lifestyle destinations, offering other products and services such as coffee, flowers, beauty products and homeware. 

Customers can now find several different types of products and brands in one place, and spend an afternoon browsing and sipping coffee. Turning your store into a destination where people go not just to shop but to enjoy themselves is a great way to keep your customers coming back. 

On Whola’s online marketplace, not only can you shop the latest fashion labels, but you can also discover fabulous beauty, home and lifestyle brands to stock in your store. From luxury beauty brands like SWIISH BEAUTY to innovative eco-friendly homeware labels like SOL CUPS, Whola offers everything in one place.

LOWER PRODUCT RETURN RATES

Unlike online stores, in a brick-and-mortar boutique customers are able to see, feel and try on any item of clothing before they purchase it. 

This means that they can make more informed choices and only buy things that they’re 100% satisfied with. As a result, the likelihood of customers returning items is significantly lower than if you had an online store.  

THE DISADVANTAGES OF OFFLINE CLOTHING STORES

HIGHER OVERHEAD COSTS

The cost of maintaining a brick-and-mortar clothing store can be a lot more expensive than you’d think. Here are some of the basic overhead costs:

• Rent: Depending on the size of your store and its location, rent can cost anywhere between several hundred to several thousand dollars per month.
• Utilities: The annual energy bill can average at around $6,000 FOR ELECTRICITY AND $3,000 FOR GAS. 
• Staff: The average retail salary in Australia is $31.79 PER HOUR OR $62,000 PER YEAR. 
• Cleaning: Retail store cleaning costs around $30-$40 PER HOUR if you decide to outsource it.
• Fixtures: Depending on the quality of fixtures, this can range between a few hundred to a few thousand dollars.
• Repairs/renovations: The odd repair can cost a few hundred dollars at most. However, if you decide to have an entire store renovation, this could cost approximately $2,000/SQUARE METRE.
• Marketing and branding materials (signs, logos, etc): Not only do you have to pay for the physical store sign, but also the design services that come with it. Commercial signage companies charge BETWEEN $50 AND $60 PER HOUR for their services. 
• Insurance: The average cost of a business insurance package for retailers is around $100 PER MONTH. 

As you can see, there are numerous costs to consider when it comes to budgeting each month. 

LESS FLEXIBILITY

Choosing to have a physical clothing store means you won’t have as much freedom or flexibility with your time. Not only will you be working longer hours (8-10 hours per day, in most cases), but these hours will be fixed. 

Moreover, your shop will remain in a permanent location. Choosing the right location is a risky process, as issues may occur in the long run. For example, a competitor may set up their shop close by, or a road may be permanently closed that stops customers from easily reaching your store. Perhaps you’ll have to shut down due to unpredictable lockdowns! 

In short, a physical store is a permanent feature that you won’t be able to adapt quickly to your changing situation. 

BUYING FASHION ITEMS TO RESELL IN YOUR ONLINE OR OFFLINE CLOTHING STORE

Whether you decide to start an online or an offline clothing store, the next big decision you’ll need to make is where to BUY WHOLESALE CLOTHING FOR RESALE.

If you’ve read our guide to SOURCING PRODUCTS FOR YOUR FASHION STORE, you’ll know that wholesale marketplaces are the best way to find unique brands and stock your entire store quickly and efficiently.

Here’s why Whola, an Australian B2B fashion marketplace may be the right choice for you: 

• Choose from over 90 unique Australian labels: Whola offers hot-selling styles from some of Australia’s most unique clothing brands to keep your fashion store ahead of the competition.
• Everything you need in one place: From clothing labels to beauty and homeware, Whola has everything ready for you to shop whenever and wherever you need.
• 24/7 support teams dedicated to helping you: Our teams are specialised in supporting small fashion businesses and offering the best solutions for you.
• Geographic exclusivity guaranteed: We offer geographic exclusivity on specific styles and brands so you remain a one-of-a-kind fashion store in your area.

CONCLUSION: SHOULD YOU OPEN AN ONLINE OR OFFLINE CLOTHING STORE?

Now that you have a complete list of the advantages and disadvantages of online and offline stores, you should have a better idea of what will work best for you. 

If you still feel that both options offer something you really need, then why not explore the idea of combining the two? 

Although running an online and an offline store will give you the best of both worlds, you must ensure that you have a robust, synchronised system that can manage both online and offline operations efficiently. 

There are many stores out there that are living proof this can work. To find out more information on how to extend your brick-and-mortar store into the online world, CHECK OUT THIS ARTICLE.

FREQUENTLY ASKED QUESTIONS ABOUT STARTING AN ONLINE VS OFFLINE CLOTHING STORE

DO PEOPLE PREFER TO SHOP ONLINE OR OFFLINE?

Online and offline shopping behaviours are different across the globe. According to RECENT RESEARCH, 59% of Australians prefer to shop for clothing in physical stores. When it comes to groceries, a much higher percentage, 77% prefer to buy in-store. Overall, it really depends on the type of customer and the products being purchased. 

WHAT IS THE DIFFERENCE BETWEEN AN ONLINE AND AN OFFLINE RETAILER?

The main difference between an online and offline retailer is the place where you can purchase their items. An offline retailer has a physical store that you must go to in order to purchase items. An online retailer uses a website to present their items and you can only order these using the web.

IS IT CHEAPER TO START AN ONLINE STORE THAN A PHYSICAL STORE?

Yes, the initial cost of starting an online store is much cheaper than opening a physical store. You don’t have to worry about paying rent, utilities, repairs, or staff with an online store. Instead, you just need a domain and develop an e-commerce website – then you’re good to go!

HOW MUCH DOES IT COST TO START AN ONLINE VS PHYSICAL STORE?

Online stores are much cheaper to start than brick and mortar stores. You can start an online store with a few thousand dollars, especially if you decide to build your own website in a DIY way using a tool like Shopify. On the other hand, a physical store costs tens of thousands of dollars to even set up, due to factors such as rent, staff, insurance and utilities.

Whola is a wholesale marketplace that makes it easy for both online and offline fashion businesses to buy hot-selling inventory with just a few clicks. SIGN UP NOW and start shopping the newest styles from our 90+ unique Australian brands!