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What Are the Real Differences Between Retail and eCommerce?

March 29th, 2021 (Updated 06/20/2023) | 8 min. read

By Jochen Schmidt and Phil Urbanski

The Differences Between Retail and E-commerce 

Retail and e-commerce. Two titans that have been battling it out for some time now. 

They’re Batman vs Superman. Batman, the tough and down-to-earth brick-and-mortar stores doing their utmost to stay relevant in a changing world. Superman, the otherworldly e-commerce game-changers evolving how we sell and purchase. 

Or at least, that’s how it may seem. 

The Beginnings of Ecommerce 

It started in the 1990s when Amazon, Alibaba, and other e-commerce giants raised their heads. Since then, they’ve been rapidly growing and altering buying habits on a global scale. Gone are the days of visiting several stores to find the best price for what you need, or worrying about out-of-stock items and dealing with poor customer service. 

Instead, you could type a few words from the comfort of your home and see more price comparisons than you have time for. Buying became as simple as browsing and has only grown easier with 1 click purchases and next day delivery. 

2020 Changed the Game Forever 

High street sales have been declining for some time. The 2008 crash, rise of social media and millennial shopping habits all changed the way retailers marketed and sold products. However, Covid-19 in 2020 dealt a damaging blow to what was already a struggling industry.  Closure of stores around the world led to a great number of businesses shutting doors for good.  

Large industry names such as Lord & Taylor, Neiman Marcus, Pier One, Brooks Brothers, Sur La Table, Guitar Center, and Stein Mart were all forced to declare bankruptcy. An uncountable number of small businesses and local stores weren’t able to function and closed. Meanwhile, on the other side, e-commerce sales reached $4.2 trillion. 

Retail sales in 2019, a fully functional year, only came to $3.8 trillionDirectly comparing retail and e-commerce sales in 2020 is obviously unfair, given that governments worldwide ordered the closure of brick and mortar stores while e-commerce thrived. But given how large the gap between these two industries now is, and given that Covid could be here for a long time to come, it’s very unlikely we’ll see the high street bouncing back to what it was.  

What’s the Real Difference? 

Even as stores open once again at the tail end of the Coronavirus pandemic, retail will forever be impacted. With most of the world attuned to the value of e-commerce and the choice they have when starting a business, brick-and-mortar stores will struggle or most likely fail to return to their former glory. But are the two really so different? 

E-commerce may be growing at exponential rates while retail rolls in reverse, but depending on how you look at them, they share a lot of similarities. 

The Challenges of Selling in a Busy World 

Whether you’re the owner of a brick-and-mortar clothing store on a busy street or the owner of a clothing website, you still have competition. For the consumer, e-commerce offers an easy way to shop and an incredibly easy way to compare prices. But from the perspective of the seller, e-commerce offers the same challenges. Just in a different way. 

Depending on your product, customers will compare you to your competition in different ways, regardless of the medium. For an electronics retailer, you factor in location, cost, return policies, customer service, to name a few. Whereas online, you’re compared primarily on price, but also delivery and return options. 

In fact, online you may lose to a competitor offering a product $5 cheaper. But in a retail store, that $5 may be the cost of petrol on the drive to the competing store. Meaning that the customer is more likely to choose you. 

Omnichannel Experiences 

Not all businesses are purely one or the other. Many lie in the middle, opting to combine brickandmortar stores with e-commerce elements. The omnichannel strategy proves immensely successful, with a study of 46,000 people showing that 76% of consumers prefer to use multiple channels. A great example of this strategy was demonstrated by Starbucks in 2018. While Starbucks itself is a brick-and-mortar business, it found a way to boost sales by integrating a digital experience.  

The advantage Starbucks had was that its main audience is relatively tech savvy millennials, so digital integration would be well-received due to the customer demographic. The Starbucks app could be downloaded ahead of going to the store. Queue times, menus and drink customization options were all listed for users to make the most efficient purchase possible.  

They also ensured that a Starbucks card (which used to be a piece of cardboard) was now downloadable via the app, and rewards could be accumulated digitally. The app also allowed customers to locate their nearest stores if they were in an unfamiliar area. If that weren’t enough, customers could also add whatever song was playing in store to their Spotify playlist. Talk about an interactive experience! As of 2020, a quarter of all Starbucks sales were made via the app that’s 23 million customers.  

Of course, not all businesses have the capital to invest in such a huge omnichannel strategy, but it does give food for thought about how businesses can effectively digitize sales.  

Click and Collect 

During the pandemic, and for quite some time before, click and collect was a growing solution for overcoming the distance between retail and e-commerce. The price comparison and ease of access e-commerce provides, combined with the in-store experience and customer service of retail, are a dream match for some. 

Buying solely online can be a difficult experience. Choosing clothing online and receiving it only to find out it doesn’t fit is an issue many of us face. Whereas, buying in-store can take the lion’s share of the day just to find the right items. 

By marrying the two, you can reserve an item online, where browsing is comfortable, and try the item on in the store before taking it home. 

What’s more, you can find the best deals or add discount codes online that may not be available in-store. And receive the customer service you’d expect in the store, including help with purchasing matching items or getting styling advice. 

Similar to the Batman and Superman comparison we began with, the two are stronger together. 

Pricing Is More Important Than Ever 

Whether your business uses one or the other, the relevance of pricing never changes. Especially if you use both in harmony. With the right pricing software, you can align online and offline prices to avoid potential disasters. Customers don’t just buy products online OR in a store. 

They research purchases and get a general feel for how much money they’ll be spending if they visit your brick-and-mortar store. While the cost your business incurs selling either in retail or e-commerce changes, this fact won’t appease customers who notice the difference. 

Should a potential customer see your online store is cheaper than in-store, not only will your store become near irrelevant but it will reduce their confidence in you and their loyalty. The larger your business and the more products you sell, the more difficult this organization may appear. 

Yet, pricing software is designed to manage this process with ease. Taking a load off your mind and allowing you to focus on other areas of the business. 

Identify Pricing Opportunities 

As your business takes on the challenges of an omnichannel approach to selling, identifying pricing opportunities is key. But, to do so requires accurate insights into your pricing, margins, customer, and product segments. You may have all this data. You may even regularly look into it to seek out these opportunities. But it can be an incredibly time-consuming and laborious process. 

Using pricing software modules, such as PriceAnalyzer, offers an alternative – with vast functionality to identify margin leakage and price increase opportunities with complete visualization throughout the price waterfall. It integrates seamlessly with Excel, data warehouses, and other pricing data sources. 

Allowing your business to function at peak performance and never miss a pricing opportunity. 

How PriceAnalyzer Can Help Your Business 

There are the four key features to PriceAnalyzer that will help your business not only survive but grow in our changing world. 

Track Performance 

By creating benchmarks based on a variety of factors including customer segments and products, you can keep track of how your pricing is benefiting your business. 

As with any area of your business, KPIs and metrics are necessary for justifying any action or expense. And PriceAnalyzer offers that in spades. 

Customizable Interface 

PriceAnalyzer offers the ability to design unique role-based dashboards for profit and margin analysis, accessible by your whole team. 

You can customize to as much detail as you want, for the needs of your business. 

Real-time Updates 

Update data in real-time and provide instant insights for specific pricing questions as they arise. 

Doing so could be the difference between seizing an opportunity or missing one. Compared to manually sifting through data at a suitable time and acting on it later, PriceAnalyzer offers real-time action. 


Finally, PriceAnalyzer offers the ability to generate ad-hoc reports whenever you need them. 

While 2020 certainly changed the way we shop and sell forever, having the right software can enormously speed up and ease the sales process.  

Jochen Schmidt and Phil Urbanski

Freelance Pricing Professional & Senior Business Development Representative , Pricefx

Jochen Schmidt has over a decade of experience in strategy consultancy and advisory in addition to pricing and software. Over 7 years with Pricefx, he held several positions including Solution Strategist Manager for the EMEA region and spearheading the global retail industry team as a subject matter expert. Throughout his career he has held various positions at specialized consulting companies, providing value to clients by advising on pricing strategies and implementing pricing software. In his free time, he is a passionate cook, beach volleyball and volleyball player, spending most of his vacations travelling and hiking. Phil Urbanski is currently a Senoir Business Development Representative at Pricefx. Phil is a logistics and supply chain professional with background in sales and ERP optimization, with extensive experience leveraging creative problem solving and relationship building skills to find optimum customer solutions.