Coping with the ‘rent of online’ – customer acquisition costs

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Bricks-and-mortar retailers may lament rent and business rates, but etailers have their own overheads: customer acquisition costs – and they are spiralling. George MacDonald investigates how they are coping with this digital overhead.

Bricks and mortar and multichannel retailers have long been accustomed to the burdensome costs of high street trading, such as rent and a business rates system seen by most as out of kilter with reality.

Selling online has frequently been seen as a lower-cost option, eliminating much of the rent and tax burden.

But life is becoming tougher for pureplay and multichannel retailers alike as the costs of customer acquisition rise.

Once the proverbial entrepreneur could build a business from their kitchen table, avoiding the punitive expenses associated with running physical shops.

But, while some retail start-ups thrive, establishing a profitable customer base is becoming more costly as businesses battle for attention and spend, and are forced to splash out more to draw shoppers through their virtual doors.

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