the model

The principal difference for consumers between a trip to the store and buying online is that buying online doesn’t require amassing a list of needs to spur purchase. In fact, consumers tell us the bulk of internet shopping consists of their meeting single needs, while the bulk of in-store shopping consists of multiple needs, albeit often in the same general category. So, the question becomes: which needs will consumers move online, and which will they collect for a physical trip to the store?

Online shopping today is easier than going to the store for most consumers. They have endless selection, they can compare prices across retailers without making another stop, and they can order whenever the need arises, even if their baby is asleep in the next room. So, all things being equal, internet-savvy consumers would likely move as much as they feel comfortable online. 

But everybody will still have a need for a bricks and mortar store for some occasions. 

Let’s look at the two factors that have a disproportionate effect on the choice to go online or offline:

Perceived urgency: How urgently does the consumer want or need her items? Urgency can be driven by true high need, such
as dinner for that night, or wants and cravings that consumers want to satisfy immediately, such as the video game that just came out. High perceived urgency will drive consumers to a bricks and mortar retailer, as online retail often has more of a lag to fulfillment.

Trust: How much does the
consumer trust the item will match her needs? Books, for example, are usually as promised. The book you order will be exactly the book you get. Other products are perceived as more risky, especially where fit or quality varies. Produce and apparel, for example, are often low trust purchases. High trust will allow the purchase to move online faster, while low trust will drive her to the store.

So, in Figure 1, needs that fall in the top left box [high trust, low urgency] will be the first to see substantial sales shift online, and many of those trips already have. We call that quadrant the online sweet spot. 

There are certainly numerous factors at play in the decision to move a need online. Some are about access to online purchasing, both access to the internet and having a credit or debit card to be able to transact. Other factors are in whether an item will ever be profitable to move direct; large volume, low price items like paper towels may just not have the right economics to offer online. And finally, consumers will be considering more than just urgency and trust. Factors like price perception and store loyalty play a big role in store choice. However, all of those factors are evolving with the rapid growth of online retailing, and aren’t nearly as big sticking points as bricks and mortar retailers hope.