Selling to the consumer

Physical channels are ways of selling in person, such as shops and face-to-face selling.

Shops and face-to-face selling

A shop lets customers visit, browse and interact with goods first-hand. You can see, feel, try on or experience a product before buying, such as trying a guitar in a music shop. Shops can stock a range of goods, and sales staff can advise and answer questions. A shopfront can also advertise the business to passers-by.

Face-to-face selling happens in shops, and when salespeople visit customers instead of customers going to them. For example, a salesperson might visit a home to demonstrate a sewing machine. It gives advice, demonstrations and reassurance, building trust and a relationship. It is especially important when a product or service needs explanation, demonstration or personal trust.

Location and footfall

Footfall is the number of people who pass by a business's premises or step through its doors. It matters because a shop needs customers to come in. Higher location costs add to expenses and can lower profit unless the site brings in enough extra sales. Large city centre sites are typically the most expensive places to locate a retail store. Premium brands may choose them deliberately for visibility, prestige and high footfall, because a busy, visible site can bring in enough trade to cover the higher costs.

Advantages and disadvantages

Digital channels are the ways a business sells using the internet or other electronic technology. The main ones are e-commerce, a business's own website, social media marketplace sites, online auction sites and downloads. They are growing fast because they often cost less to run, are quick and cheap to start, and reach customers worldwide.

How e-commerce changes place

E-commerce is any business transaction carried out online, including sales to other businesses. It has changed how consumers shop and how businesses plan place: many no longer need to be near their target market or pay for an expensive store.

An e-tailer is a retail business that sells its products to customers over the internet. You can target anyone with internet access, wherever they live, and cheaper premises keep costs down, so many e-tailers start and stay home-based. Two friends selling handmade phone cases from a spare bedroom, for example, reach customers in several countries with no shop rent.

Advantages of digital channels

• Reduced overheads such as rent, heating and shop staff, which can allow lower prices.
• Convenience: customers can shop at any time.
• A worldwide market, not just people who can travel to a shop.
• Full product information, such as sizes and customer reviews.
• Data about customer behaviour, such as the most-viewed pages.
• Fewer staff needed, since the website does much of the selling.

Disadvantages of digital channels

Buyers of physical goods must wait for delivery, cannot inspect products physically and may find it harder to ask questions. They need a reliable internet connection, and some people lack access or do not want to buy online, whatever their age. The business faces the cost and time of setting up and maintaining online content, more global competition, packaging and posting costs, returns administration, fees, less face-to-face contact and technology failures.

Services can be delivered remotely too, giving customers wider choice, flexibility and no travel. A theatre company can charge schools to stream a recorded show, so a class hundreds of miles away sees it without a coach trip. But the actors get no reaction, and the provider may not notice mistakes as easily as in person.

Online marketplaces and online auction sites are digital selling platforms where a business lists products for customers to find and buy. A social media marketplace site lets a seller reach a much wider audience than their own followers, usually in return for paying a fee to the platform. For example, a two-person enterprise making left-handed guitar straps could list them on a marketplace and be found by musicians in other parts of the country who would never see a poster in their local music shop.

Marketplace drawbacks

Marketplaces bring competition from many other sellers, so your product can be hidden among similar items. Platform fees reduce the money kept from each sale. Some potential customers may not use or trust the site, and the site may attract the wrong audience. Keeping prices, photos and stock information up to date takes time. Bad reviews are public and can damage trust, while a technology failure can stop sales completely.

Auction sites and larger platforms

An online auction site lets private individuals and enterprises set up a store and sell by bidding. A fixed-price purchase option lets a buyer pay a set price without bidding, which suits customers who want certainty. Auction sites usually charge a small fee to host a store and another fee for each sale, so sellers must build those costs into their prices. Some enterprises trade exclusively through an auction site, using it as their only place to sell. Small e-tailers can also sell through larger online platforms. This gives a wider audience and the platform's established reputation, but adds fees and competition and gives less control over how the product is presented and sold.

Downloads are a digital channel in which goods or services are supplied to the customer as a full download or a stream. The customer buys them often through an online marketplace or an app store, and the item is delivered electronically rather than as a physical good.

Because nothing is packed or posted, there is no physical delivery wait: once payment goes through, the customer can use the product within minutes. Downloads can be digital entertainment, software or published content, and they are not only apps — anything that can be streamed or downloaded counts.

What can be sold as a download

Why businesses use downloads

Downloads let a business sell to customers in many locations, provided each customer has a suitable device and an internet connection. There is no packaging or posting to arrange and pay for, and the same file can be sold again and again.

There are drawbacks too. The business still has to set up and maintain its online store or its listing on a platform, and it may pay fees to a marketplace or app store on each sale. It also faces competition from other digital products, which customers can compare and switch between easily. Customers may need help with access or compatibility, such as a file that will not open on an older tablet, and some prefer a physical copy they can hold or give as a gift.

For example, a small animation studio sells a downloadable short film for school assemblies. A teacher three hundred miles away can show it the same day, so the studio reaches schools no shop could serve. However, the studio pays the platform a fee on every sale and spends time replying to buyers whose older phone will not play the video.

Choosing a selling channel means deciding where and how customers will buy from you. The channel must be accessible to your intended target market: if your customers do not use a particular website or cannot easily travel to a shop, that channel will not bring in sales, however good the product is.

Product type pulls you one way or the other

Digital channels may be less suitable for products that need to be seen, felt, tried, smelt or tasted before purchase. A customer cannot feel how a rucksack sits on their back or handle a wooden toy to judge its finish through a screen. Physical channels may be more suitable when a product needs trial, personal advice or a demonstration before purchase — for example, fitting a child's bicycle helmet or showing how a sewing machine works.

Weigh up the whole picture

A digital channel is not automatically cheaper: website upkeep, platform fees, packaging and posting all add cost. A shop does not automatically attract more customers: a website can reach a wider market.

Using both channels

Many businesses use both physical and digital channels rather than choosing only one. A business selling handmade wooden garden games could run a stand at weekend craft fairs so customers can lift the pieces and feel the finish, then take orders on its website from people who saw the stand or found it online. Customers can browse in person and buy online, or see a product in a shop and order it later. The right mix depends on the target market and the product.