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Why People Buy Online

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There’s 3 reasons people buy online as opposed to offline: selection, convenience and price. You should deliver on at least one of them.

1) Selection

Amazon has an incredible selection: 110,000+ authors just in their Literature & Fiction section.

Limited shelf space isn’t much of a problem online – something that’s already turned entire industries upside down. Just think of the product selection available at Amazon or in the iTunes store.

Of course, you don’t need a lot of products to have a supreme selection. You can also offer very niched products online, since your potential customers aren’t limited by geography. You don’t need a massive selection (like Amazon), you can get by with a small but focused selection.

A wide range of products previously unavailable to a customer living in a small town in Georgia can now be found and ordered online with just a few clicks, because geography isn’t a concern anymore.

Takeaway: brick and mortar stores can’t compete on products they don’t have in their product catalog.

2) Convenience

According to a study by Nielsen Online, convenience is the single biggest reason people buy online during holiday seasons. It saves them time.

Want to buy that new toy for your kid’s birthday at 1:17 in the night? Go ahead. No driving to the store, no waiting in line, no opening hours to worry about. This kind of convenience is obviously a very good reason to buy online as opposed to offline (especially for people with a job who don’t have time off when the store is typically open).

Make your store really easy and painless to buy from (a few usability studies usually do the trick) and you could easily highlight convenience as one of your selling propositions. While convenience is something all online stores benefit from, surprisingly few actually use it as part of their marketing.

Takeaway: brick and mortar stores just can’t offer the same kind of convenience as online stores that deliver to your door and are open 24/7.

3) Price

People love a good deal. Unbeatable prices were a huge factor in making online shopping mainstream and it of course remains one of the main reasons people buy online.

Price comparison has become hugely popular. Here's a (slightly modified) Froogle comparison.

Lower operational costs has brought prices to a new low, and really, why pay more for a product than you have to? No wonder price comparison sites are so popular.

Due to the nature of e-commerce businesses – no expensive square meters, less employees, etc. – prices online tend to be lower than offline. If you’re a master at procurement and logistics this obviously represents a huge opportunity to you.

Takeaway: brick and mortar stores have higher operational costs making it difficult for them to compete on price with a well-oiled online store that don’t have these costs.

Conclusion

So there you have it. Selection, convenience and price. Those are the 3 main reasons people choose to buy a product online instead of buying it in a regular brick and mortar store.

Are you taking advantage of at least one of these benefits? Is there something we missed?

collin September 1, 2010 Reply to this comment

Its really a very nice post. I totally agree to your views. People buy online because of the wide range of selections available, no time limit, multiple products, money saver etc. I use to buy groceries for my restaurant online. It helps to me to compare various products under a single roof.

Thanks
Collin paul

OS July 27, 2011 Reply to this comment

While convenience is something all online stores benefit from, surprisingly few actually use it as part of their marketing.

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