Definition of Brick and Mortar
Brick and Mortar refers to the business model where the business stores have a physical presence, and the customers have face-to-face experience. The products and services are offered to customers who come in person to the shop/stores. It works in opposition to the e-commerce business system.
How does it work?
Brick and Mortar is the traditional way of running a business where they have any store or outlet at least in one physical location in the form of office buildings or shops where customers come in person to buy the products or experience the service. It is more of a retail shop where a customer visits the stores and interacts with the store executives, experiences a demo or trial, and gets more satisfaction in the purchase. Still, there are customers who prefer visiting shops in person rather than online shopping where they feel it is more trustworthy, and they can experience better customer service.
Example of Brick and Mortar
Walmart is the best example for a brick-and-mortar store where customers have the option to go and buy the products directly from the store, and they have their store at multiple locations and have made it accessible to the customers. Simultaneously they have their online business, and it is growing at a rapid scale. Business models which operate in both ways can attract customers of all segments.
Challenges of Brick and Mortar
Brick and Mortar stores have a tough time with more e-commerce participation in the later years, online retailers like e-bay, Amazon, etc., have gained more popularity and customer population as the products are offered at a cost lower than the Physical retail stores. With more customers moving towards online shopping considering the price efficiency, the physical stores are forced to reduce the price of the goods to compete with the digital players and end up with less or no profits. Therefore, many Brick and Mortar stores are parallel creating their digital presence in order to sustain in the market and offer more facilities to the customers.
E-commerce vs Brick and Mortar
E-commerce and Brick and Mortar are both considered retail stores; they vary a lot in how they operate.
Operational Model
The Brick and Mortar business model operates via physical stores; they have at least one physical location in the form of store/ outlets where the customers can visit and purchase the products, whereas e-commerce is a digital medium where the customers purchase the products through the vendor’s website and the products will be delivered to the home/ required location of the customer. Running the physical stores comes with more cost than e-commerce, as the operational expenses of running a store would cost more, and it would be tough to match the price of e-commerce players.
Business Transactions
The payment for transactions is made either in cash or online via debit cards, credit cards, Net banking, UPI, etc. Most online shopping transactions are done online, whereas, in brick and mortar stores, both cash and digital payments are accepted. However, there are customers who still don’t prefer online payments through websites as there is always a chance for fraudsters and scams happening in online transactions.
Promotion
Promoting and marketing vary a lot when it comes to e-commerce and brick and Mortar. E-commerce prefers advertising through online and digital marketing like paid search, social media, e-mail marketing, etc., whereas brick and mortar prefer their marketing through customary techniques like brochures, television, newspapers, billboards, radio, and also they prefer digital marketing when they simultaneously operate through digital means.
Customer Connect
Brick and Mortar stores have physical interaction with their customers when they visit the stores and help them in their selection and answer all their queries, whereas, in e-commerce, the customer support representative can be reached only for specific cases; otherwise, most are virtual assistance. And also, the customer can try the products and experience the demo in the case of brick and mortar stores; the same is not possible with e-commerce; for any defective goods, the same can be returned within a specific period.
Benefits
- Customers have a better shopping experience as they can purchase the products instantly instead of waiting for delivery, and also they can speak directly to the customer representatives and get answered to all their questions. It is very convincing to take guidance from a person rather than virtual assistance.
- Customers have the option to try the products before buying (E.g.) Apparel. They can touch and feel the products and experience the trial and demo of the products. (E.g.) TV, music players, etc.
- Customers have better trust over payment processes happening towards physical stores as some fraudulent activities do happen in online shopping.
- Better customer relationships and trust can be built with the operation of physical stores as they meet in person and the representatives establish connect with the customers.
- Shipping products comes with a big cost and also in case of return of goods it includes a double charge. Also, there are chances for goods getting stolen during shipping and also getting materially different products as sales returns; all these can be avoided in a brick and mortar store. The returns can be avoided mostly in brick and mortar as the customers try the products, and also returns come with no cost as they directly visit the stores for the same.
Disadvantages
- With more e-commerce participation, there is a shift in customer base; customers save the traveling time to stores through online shopping.
- Brick and Mortar has more operating costs as they have a physical store; it comes with rental cost, maintenance cost, staff cost, etc. Therefore, it may impact the price of the goods as they have to cover the operating cost.
- Building and running a brick-and-mortar store takes more time, and it comes with more competition.
- E-commerce stores operate 24×7, and all 365 days customers can place the order anytime whereas brick and mortar store has limitations with respect to the timing of running the stores.
- Scalability is limited with brick-and-mortar stores as the physical stores are set up in a particular location. However, expanding the stores in multiple locations means more investment and time is needed, which restricts business growth. Also, the customer experience is limited to the people near the stores.
Conclusion
Brick and Mortar stores have their own advantages in doing business; they provide a better customer experience and easier to earn the trust of customers. Moreover, with a growing digital presence, it is good to accompany the physical store with an e-commerce store as now the customers have the option of both visiting the store as well buying online.
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