Budgeting Is Shopping Online Really Cheaper? The answer is often yes, and here's why By The Balance Editors The Balance Editors We’re a team of writers and editors with decades of experience researching and answering questions about personal finances. We believe everyone should feel confident when making money decisions, and that passion drives us to make The Balance the best place to learn about finances. learn about our editorial policies Updated on November 9, 2021 Reviewed by Robert C. Kelly Reviewed by Robert C. Kelly Robert Kelly is managing director of XTS Energy LLC, and has more than three decades of experience as a business executive. He is a professor of economics and has raised more than $4.5 billion in investment capital. learn about our financial review board Fact checked by Kyra Baker Fact checked by Kyra Baker Kyra Baker is a fact-checker with nearly 10 years of experience working and assisting on editorial projects within the culture, arts, and publishing spaces. For the past eight years, she has worked as a fact-checker at Art Papers Magazine, an Atlanta, Georgia-based art magazine. She leverages this experience for The Balance, fact checking content for accuracy across a variety of financial topics. learn about our editorial policies Share Tweet Pin Email In This Article View All In This Article Why Are Online Stores Cheaper? Advantages of Online Shopping Using Online Promotional Calendars What Is Showrooming? Browser Plug-Ins and Savings Frequently Asked Questions (FAQs) Photo: Johnnie Davis/ Moment/ Getty Images Shopping online can save you money, especially when you combine it with online savings codes, deals of the day, no-taxes-charged, and free shipping offers. Why Are Online Stores Cheaper? Retailers do not always offer the same deals in brick-and-mortar stores as their online counterparts, because the cost of running a physical store can be much greater than for an online store. Factors such as rent, electricity, payroll, fixtures, and shrinkage loss all contribute to the gross margin and overhead of doing business in a store. Retailers have found out that they can meet the needs of their customers with less operational expenses: an online location and not a physical store. Good online retailers then pass the savings on by cutting the cost of their products. What Are the Advantages of Online Shopping? Online shopping is a great way to find products that are from past seasons or that are being liquidated. Housing thoses type of products in a central warehouse allows the retailer to sell products longer. They can let them sit unsold without destroying the profit margin. This practice can then result in big savings for customers who do not need to purchase the most current products. Communication with online shoppers is often done easily with automatic responses to questions. That may be done with more professional and corporately trained employees than those found in brick-and-mortar stores. Customer service topics, such as return policies, are clearly stated on reputable sites to lessen any confusion. Well-trained live sales reps are available to those who have questions. There's no need for them to wait in long lines or to search aisles for a store worker. Note Websites that compare prices, such as PriceGrabber, enable shoppers to shop smarter. They're able to easily compare the prices of a product at several stores using one site. Shoppers not only get pricing information, but they also get product and site reviews to help them decide what and where to buy online. Many online stores waive sales tax charges or shipping costs in order to entice shoppers to make an online purchase. Reputable sites also offer toll-free numbers for customers who do not want to post their personal information and credit card numbers online. How to Use Online Promotional Calendars Online stores are on the same promotional calendar as brick-and-mortar stores. That means they also offer great seasonal sales and discounts. The after-Christmas sales rival those of local stores. Late winter sales often offer huge price cuts for the annual "white sale" events. The end of January and February is a great time to pick up winter items at a bargain as retailers make space for spring items. Throughout the year, big sales events are held during holiday weekends; these include the Fourth of July, Labor Day, and Memorial Day, just like the local stores. With more people heading online to do their shopping, the smarter retailers are responding in their own way. They may have improved user-friendly sites, more direct promotional events, and just some good old-fashioned customer service. Shoppers seem to be returning to a more back-to-the-basics concept in shopping: "Here is the product, here is what it costs you, and here are the advantages of shopping with us." Online stores are proving to be the best at adapting their promotions to meet a simpler approach. What Is Showrooming? One growing trend among shoppers is to go to a brick-and-mortar store to check out and compare the features of a product and they buy it online at a lower price. Several apps are available to shoppers to help them check competitors' prices both online and in the store. Note Some customers walk around the store with their smartphones and then ask the sales associates whether the store is willing to match prices. Amazon is a huge competitor for online and local retailers. With its vast amount of inventory in multiple categories, trying to convince a shopper to buy a specific brand is not the goal, like it would be for local retailers that are often limited by the brands that they carry. Amazon offers shoppers an opportunity to branch out beyond what is available at their local stores. Although showrooming can be a major source of frustration for brick-and-mortar operations, it has forced many local stores to improve their services. Walmart now has features on its mobile app that allows shoppers in the stores to scan barcodes, read customer reviews, and find out about the latest discounts that might lower a product's price. The app does not show competitors' prices, which still makes it a step down from what can be accomplished when shopping online. How Browser Plug-Ins Make Saving Easier Online shopping and saving have come a long way over the years. Today's technology has made it so that all shoppers need to do is shop, and the coupon savings are deducted automatically at the checkout screen. The plug-ins run in the background and are not even noticeable until there is a coupon available. With browser plug-ins that bring coupons to the shopper, missing out on extra savings is almost impossible. Frequently Asked Questions (FAQs) How do you stay safe when shopping online? Shopping online is relatively safe, but there are things you can do to add extra protection. They include knowing the warning signs for online scams, keeping your computer and mobile operating systems up to date, only shopping on encrypted websites, and not reusing passwords across multiple sites. It's also wise to avoid sharing credit card or other sensitive information over public Wi-Fi networks. What percentage of shopping is done online? Online retail shopping has steadily risen in recent years. In the first quarter of 2021, e-commerce accounted for just over 5% of retail sales. By the second quarter of 2021, online retail represented 12.5% of total sales. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. Walmart. "Meet Walmart+." Walmart. "Walmart Mobile App." U.S. News & World Report. "The Best Days to Shop in 2021." U.S. Census Bureau. "Quarterly Retail E-Commerce Sales, 2nd Quarter 2021."