This document discusses five more differences between offline and online stores. It begins by reviewing five differences covered in part one: location, construction, size, presentation, and personnel. It then explores five additional differences: data, fulfillment, payment, security, and regulation. Specifically, it notes that online stores can gather vast amounts of customer data but may have information overload issues, they must still store and ship physical goods for e-commerce but also deal with volatility in orders, payment introduces increased risk of fraud but new mobile payment systems may help, security risks involve technology vulnerabilities rather than physical theft, and regulation is more complex for online stores without a physical location across borders. The document concludes by advising respecting offline and online differences and

1. Five MORE Differences
Between Offline and
Online Stores
Charles E. Crouch
© Charles Crouch 2004-14

2. A short review of Part 1:
Photo: Microsoft

3. While we’ve been building offline
stores for thousands of years...
Fast Food Restaurant, Pompeii, 79 AD
Online stores are barely 20 years old!
Dell, circa 1996
Images: C. Crouch, telegraph.co.uk

4. When going online, we find that things are
different. In part one we saw five ways
offline and online stores are not the same:
Location
Construction
Size
Presentation
Personnel
Photo: C. Crouch

5. Location
Offline stores have a physical location that
requires customer commitment in time
and effort to go there, making them more
likely to buy.
Existing virtually where competitors are
only a click away, online stores must work
harder to acquire committed customers.
Photo: iStockPhoto

6. Construction
Offline stores occupy physical spaces that require
time, money and space to construct. Modifications
are costly and done infrequently.
Since it has no physical presence, an online store can
be quickly built and new features easily added.
However, skilled people are required to construct
both store types.
Photo: iStockPhoto

7. Size
Offline stores must be large enough for the
merchandise, staff, customers, and inventory.
Online stores are sized by bandwidth, processing
power, and data storage. It is easier and faster to add
size to an online store.
Photo: C. Crouch

8. Presentation
All merchants must display their offering to
attract customers and encourage them to buy. In
offline stores customers can use all their senses
while making a purchasing decision.
For an online merchant the main connection with
your customers is through a screen, making the
visual presentation even more important.
Photo: C. Crouch

9. Personnel
Offline stores must hire,
train and manage staff for
face-to-face service.
Online stores also use
staff to provide a pleasant
experience, but they can
work virtually from all
over the world. In both
cases staff require ongoing
management attention.
Photo: C. Crouch

10. Here are five MORE ways
offline and online stores differ
Data
Fulfillment
Payment
Security
Regulation
Photo: C. Crouch Photo: C. Crouch

11. Photo: C. Crouch
Offline stores get valuable customer data through
personal contact. The feedback is immediate and
follow-up questions can be asked.

12. Data
Online stores can gather vast amounts of data
about their customers, often in real time.
can be used to provide a customized experience for
each visitor.
However information overload is a frequent
problem as too much uncoordinated data is
available to make good
Photo: Microsoft

13. Fulfillment
Offline stores must deal with
physical goods requiring:
• storage in good condition
• attractive display
• pick, pack, & delivery
• customer
Photo: C. Crouch

14. Fulfillment
Like offline, online stores must attractively display their
goods, but using a screen interface. Firms selling
physical goods often need a warehouse with the same
issues of storage, picking, packing, shipping and returns.
But online stores also must deal with...

15. Volatility
Since online stores are open 24/7, they can be subject
to wide swings in order levels. This problem is
compounded when they offer little or no information on
availability and make promises for prompt delivery which
they cannot meet.

16. Payment
Offline stores receive payment in several ways,
cash and credit cards being very popular. Because
sales staff can check the credit card and the
person presenting it, the merchant’s exposure to
fraud is limited.
Photo: iStockPhoto

17. Payment
Online stores frequently accept payments by credit
card. Because the physical card is not present and
all information is passed digitally, the possibility of
fraud is increased, and higher processing fees are
charged by card companies

18. Payment
With the growth of mobile, new
payment systems are being
introduced that combine ease of
use with increased security. These
may be used in both offline and
online stores.

19. Security
Offline stores use
physical means such
as guards, tags and
alarms to protect
both goods and the
store itself.
Photo: C. Crouch

20. Security
Online firms may have to protect warehouses,
but the bigger risk comes from the complex
technology they use. Exposed to attacks from
around the world, this technology can fail.
Much of the value in online firms is the data
they contain, making theft easier and exposing
companies to massive loss and public
exposure.
Photo: iStockPhoto

21. Regulation
Offline stores are regulated by the body of
laws and regulations which are applicable in
their physical locations. In general these
regulations will change slowly as governments
and regulators usually act according to slower
time frames.
Photo: Microsoft

22. Regulation
Sales
HQ
Prod.
Develop.
Phone
Test
R&D
Online stores exist in a more fragmented virtual
world. It is not clear who has jurisdiction over a
firm which is split across many countries, often
has no physical presence, and can change parts at
frequently to meet changing conditions.
Image: Ktrinko, Wikimedia

23. Putting it All Together
Respect the differences between
offline and online stores
Use them to your advantage
Keep your customers’ needs at
the top of your store criteria
Photo: iStockPhoto

24. Other Presentations
on SlideShare
Photo: C. Crouch

25. Questions Comments and Suggestions?
Charles Crouch
info@charlescrouch.com
CharlesECrouch
www.charlescrouch.com
Photo: iStockPhoto