Ditching The Store: From Brick and Mortar to Online

Economic uncertainties and advancing technologies have retailers wondering:  should they replace their stores with e-commerce sites? According to IBISWorld, an industry research firm, e-commerce and online auctions will see a 16.9% revenue growth by the end of 2009. However, a variety of factors are causing this growth. Could it be because retailers are leaving their stores behind and saving money by going online, or could it be because consumers are cutting back on gas and other expenses by shopping online? According to Raquel Guardia of BagItGirl Boutique, it’s both.

Guardia believes that leaving her storefront and going online was one of the best decisions she could have made for her business. At her physical location, she saw “a great influx of sales coming in.” However, after the economic downturn she decided to go strictly online and mobile, which allowed her to change her price structure dramatically. “The difference between our store compared to other stores is that we are able to sell below retail, and at 20 to 70 percent below retail we have new items that come in just like other stores do. So in this economic downturn we have actually seen a growth in sales versus a downturn in sales because of our price structure,“ says Guardia.

Of course, going online is just the first step in restructuring a retail business to turn a profit. BagItGirl Boutique is not only an online store, but also a mobile store. Guardia strongly believes that a combination of her online presence and community awareness has helped BagItGirl succeed. “Because we do charity events and private showings for women in their homes, we’re finding that we don’t have as much overhead,” says Guardia. “So certain things that were associated with traditional retail we were able to get rid of. In this downturn retailers really have to look at things differently, including their square footage. An online presence, rather than a typical store front, is where I’m seeing the market going toward because people are not driving as much.” Guardia believes the online fever is catching on, and even the wholesalers she’s working with have gotten involved. “I even got an e-mail from one of my wholesalers who is doing a webinar so their retailers will know what to do and how they can have a successful business during this economic downturn.”

However, no matter how much technology changes the way she does business, Guardia has some traditional advice for other retailers. “The number one thing is to listen to your customer and always change it up. And two, you are the market: really do your research and get your name out there; that’s the most important thing. And remember customer service! Customer service gets the customer back to you.”