The obvious conclusion one might draw is that considering opening a physical high street store would be madness. Actually, it's not quite that simple. Depending on the industry, and on what a business can offer, there are cases where focusing on a physical store actually makes sense. There are also cases where a purely online business will struggle to compete with large established competitors. The following are some of the factors to consider.

Can You Compete Online?

Certain industries are dominated by a few established players when it comes to online commerce. Estate agents are a good example. If you wanted to start an estate agency and decided to focus on online sales, what can you offer that established online agents can't. There are several obvious advantages to working face to face. On the other hand, if you try to compete with well-known online agents, you will struggle to stand out.

Another example is speciality stores that sell goods like art supplies or fishing gear. People do shop for these products online but they do so when they know what they want and are looking for the cheapest option. If you are selling speciality products, and you can't compete on price, you will struggle online. Research shows that people only look at the three online stores they know best before making a decision. So, if you are not one of those three, you're not in contention anyway.

On the other hand, there are people who still buy all these products in store - in fact, they often prefer it. If you are opening a business in a niche where you have expertise, then your expertise is your biggest asset. And you'll be able to use your skills better in a high street store than online.

Does Competition actually help to grow your business?

It's now widely recognised that, for some industries, more competition is better for everyone.

Online gambling is possibly the best example. Moving online has allowed the industry as a whole to reach more people, while also cutting overheads. Online casinos like Betway have come into their own by focusing their efforts on online marketing and on pushing innovations like "live" casino games to get a younger audience onboard.

Similarly, online marketplaces like eBay have also done better online than their bricks and mortar counterparts ever did. They took the local newspaper classifieds global. That means more sellers can reach more buyers. And that means every tiny niche in the world now has access to a global marketplace.

The challenge for a start-up business is that this type of business requires a large budget. If you don't have the budget to compete at this level, you are better off building a niche business - and a high street presence might be an advantage.

Can you offer an experience?

Many believe that high streets will continue to lose ground to online retail. Business Insider disagrees, stating that "experts say high streets will adjust rather than disappear - expect to see more coffee shops in supermarkets, DJs in clothes stores, and other "experiences" to draw people in"

Amazon, which is expected to be responsible for nearly 45 percent of U.S. e-commerce sales in 2017, is famously now opening physical bookstores. They are doing so for several reasons, one of which is providing the experience they can't provide on their website. They have realised that there are certain customers who want the experience of a physical bookshop.

Desk and laptop 

As business becomes more automated, one of the best ways for a company to differentiate itself is by doing things automation can't. That includes providing an experience and face to face contact. In the future, as people use their mobile phones and PCs to do more, they become more isolated. Bricks and mortar businesses may provide a refuge from that isolation.

According to Statista, in June 2017, online sales accounted for 16.2% of all retail sales in the UK. And, while online sales account for as much of 79% of music, books, video, and electrical appliance sales, other sectors have far lower online penetration. Clothing stores sell around 14% of their goods online, household goods stores around 10%, and less than 5% of food is sold online.

So, while growth comes from online sales, over 80% of the UK's annual 358 billion GBP in retail sales are still offline. That means there are still lots of opportunities offline.


While many large high street businesses are struggling to compete with online competitors, for smaller businesses, high streets might be an opportunity. This is especially true if the business' main asset is its owner. If you have experience in an industry, that experience may be wasted if its hidden behind a website.

That doesn't mean you can't sell online too. But for a new business, establishing a presence may be easier on the high street.