I've been back/forth on same. I believe the answer is both.

The panniers come in handy for stuff like groceries. I like to keep the lock, repair kit, some spare clothes, and tubes in the bags. Having the spare clothes is handy when weather changes. Some stuff, I don't like to carry on backpack (e.g. tennis racket).

If I need to carry something expensive like a PC, then I get out the backpack. I find myself throwing the backpack on the pannier rack, often, though (just bungee it on).

I ride with street shoes often, so to combat heel strike, I buy shoes that won't his the bag. I only shop for shoes that have small footprint.