Ecommerce businesses continue to gain steam, with global ecommerce sales expected to reach more than $5 trillion by 2028.
While some businesses will always maintain a physical presence, many opt to forgo brick-and-mortar locations altogether and sell exclusively from an online store. This is known as pure play ecommerce, a term originally coined to describe companies that focus on one industry or product line. Now it’s used to distinguish online sales-only companies from those that might have an online presence in addition to a brick-and-mortar store.
Should you put all your eggs in one ecommerce basket? Keep reading to understand what this strategy is, along with its unique benefits and challenges.
What is pure play ecommerce?
Pure play ecommerce refers to businesses that operate exclusively via digital channels with no physical retail presence. It doesn’t matter whether you’re selling your products on a custom-built website, online marketplaces, social media platforms, or all of the above: If you’re selling online only, you’re a pure play ecommerce business.
Pros of pure play ecommerce
- Lower startup and operational costs
- Focused digital shopping experience
- Efficient data collection
- Global reach
By focusing their time and resources on online sales, pure play companies may enjoy benefits that those with physical retail locations do not. Here are the main advantages a pure play business strategy offers:
Lower startup and operational costs
Without the need to rent physical storefronts, pure play online retailers don’t spend as much capital as brick-and-mortar sellers while they’re getting their businesses up and running. They also don’t have the ongoing operational costs associated with running physical stores—such as rent and labor—which can translate into lower prices for customers.
Focused digital shopping experience
By focusing on online operations, pure plays can invest in and optimize their online shopping experience.
From personalization to checkout design to order fulfillment, pure play retailers often excel at delivering frictionless and satisfying online buying experiences. Research shows pure play sellers tend to have better conversion rates across direct, organic, and paid search traffic than brick-and-mortar retail with a minimal online presence.
Efficient data collection
Because they manage only online sales, pure play ecommerce businesses can more efficiently collect and analyze customer data than physical businesses. Insights from this data can personalize the shopping experience, optimize marketing campaigns, facilitate better customer segmentation, or inform other data-driven decisions for the business.
Global reach
Pure play businesses are not limited by geographical boundaries like traditional stores, allowing them to reach a global customer base. Likewise, without as much infrastructure as businesses with physical stores, online businesses can expand to new territories more quickly.
Cons of pure play ecommerce
Pure play retailers must navigate an increasingly competitive market to attract and retain customers while also meeting rising customer expectations. There are a few reasonspure play sellers may be hesitant to remain an online-only shopping experience:
Costly fulfillment process
The ecommerce landscape is increasingly competitive. Pure play retailers must also manage rising consumer expectations around shipping times, which can increase order fulfillment costs and affect profitability. Ninety percent of consumers expect two- or three-day shipping options, and two-thirds say they’d stop doing business with a company after a late delivery.
In addition, returns and exchanges are more common with online purchases, with 21% of orders returned in 2021. For pure play sellers, returns are more expensive to process than in-store returns, where transportation costs are technically covered by the consumer.
These factors make it increasingly challenging for pure play companies to become or stay profitable.
Lack of in-store shopping advantages
While pure play ecommerce retailers typically excel at delivering frictionless and satisfying online buying experiences, some elements of the in-person shopping experience keep customers coming back to brick-and-mortar stores.
Being able to touch, view, and interact with products is one of the major advantages of in-store shopping. Plus, shopping in-store offers customers the instant gratification of walking out of a store with their purchase while saving on shipping costs. These are all important aspects of the brick-and-mortar experience pure play e-tailers cannot replicate.
Harder to increase brand awareness
Competing in crowded ecommerce markets can make it difficult to stand out. Not only that, but the advantages a physical storefront provides—such as signage, customer service reps, physical products, shopping bags, and foot traffic—literally put your brand in front of consumers and create tangible brand experiences that can drive growth and contribute to brand awareness.
Is pure play right for your business?
A pure play model can allow you to get your business up and running with fewer startup and operational costs than physical retailers. It can also be particularly effective for reaching Gen Z target audiences that prefer online shopping over the traditional retail landscape. By focusing on online sales only, pure play retailers can deliver a refined, seamless online shopping experience.
On the other hand, trying to attract and retain new customers in highly saturated ecommerce markets may be challenging. Shoppers may simply prefer to buy your type of product in-store where they can try things on or compare different versions. Rising consumer expectations around shipping times and the high prevalence of returns in online shopping can make it harder to become profitable.
Whether a pure play strategy is right for your business depends on many factors, including your market, your offerings, and your ideal customers—but it might just offer your retail business the framework it needs to get off the ground.
Pure play ecommerce FAQ
What is an example of a pure play retailer?
A pure play retailer in ecommerce focuses on selling only through online channels like social media platforms or their ecommerce store. Fashion retailer Adored Vintage is a pure play retailer. The business sells vintage and modern vintage-inspired clothing, shoes, and jewelry through its online storefront.
What is omnichannel in ecommerce?
Omnichannel retail is a strategy by which businesses integrate their sales channels to provide a seamless, unified, and consistent customer experience. That means a customer may shop in-store, through a mobile app, on social channels, or on an ecommerce site and have their data and preferences follow them from channel to channel.
Is Amazon a pure play company?
Amazon was a pure play company when it launched as an online bookseller. Since then, the business has expanded into physical stores while also moving into new markets by acquiring Whole Foods, a brick-and-mortar grocery store, for example.
Why is the pure play era ending?
As the ecommerce market matures and big, traditional brick-and-mortar retailers invest more heavily in online channels, many of the advantages of pure play are being eroded. Competition is increasing alongside customer expectations, and profitability is becoming more challenging for pure play retail due to expensive returns and the difficulties of standing out in a crowded field.
