Brick and Mortar
A business model in which the company maintains at least one physical location where customers can make in-person purchases.
What is a Brick-and-Mortar?
"Brick and mortar" refers to any genuine storefront that sells or offers goods and services to consumers in person, and the abbreviation "B&M" stands for "brick and mortar." The term "B&M stores" refers to a wide variety of establishments that can be found within shopping centers.
Examples of these types of businesses include coffee shops, bank branches, grocery stores, and clothes stores.
Virtual businesses are the antithesis of brick-and-mortar establishments because they conduct all of their transactions online and do not interact face-to-face with their customers.
Customers who shop with virtual businesses often do so through the company's website, where they can place an order, proceed with the payment, and then wait for the item to be delivered by the mail service.
The following is a list of the top five characteristics that set a physical store apart from an online retailer:
- A target that is not only reachable but can also be examined with relative ease.
- Independent, self-contained, and sometimes interactive billboards and other forms of advertising
- While shopping, friendly employees are available to assist you in any way they can.
- By using a physical layout and signage, it is possible to sustain the customers' interest and stimulate mobility across the establishment.
- An atmosphere that is in keeping with both the name and the brand of the store
Understanding Brick-And-Mortar
"Brick and mortar" refers to a business model in which the company maintains at least one physical location where customers can make in-person purchases.
As a result of the proliferation of online stores, the term was coined to describe this phenomenon. Storefronts made of brick and mortar are those in which a company has a permanent physical presence.
The following comparisons highlight the key differences between traditional and online enterprises.
Brick-and-mortar stores allow customers to visit a physical store to see, touch, and buy things in person, unlike online shops, which can help establish a reputation for providing exceptional customer service.
Brick-and-mortar stores allow customers to visit a physical store to see, touch, and buy things in person. Nevertheless, enterprises conducted offline and online might eventually steal ideas from one another.
Internet shops, for instance, can open up brick-and-mortar locations where customers may make purchases or pick up things they've ordered online and vice versa.
Traditional businesses may minimize their physical presence to increase their focus on Internet sales.
How does Brick-and-Mortar operate?
Even though brick-and-mortar stores and internet businesses are very dissimilar, these two types of businesses frequently work together in the real world.
Although many firms eventually incorporate both components, some enterprises remain exclusively one or the other, particularly when they are first beginning.
This is especially true when the business refers to its original beginnings or companies that have only recently opened their doors for business.
For instance, a web-based company may reach the point where it realizes it requires a physical facility in a city and then decides to open that facility. In this case, the company has grown to the point where it needs the facility.
On the other hand, a physical store may reduce the number of its locations to concentrate more of its efforts on conducting business over the internet.
However, even though online firms often have lower overhead costs when compared to their counterparts in the real world, there are still several advantages to having a physical presence.
Customers will have an easier time experimenting with new items, and businesses will have an easier time establishing a strong reputation for providing exceptional customer service.
Brick and Mortar Vs. Online Retail
There are two very different kinds of enterprises that go under the category of retailing: those that take place online and those that take place in physical storefronts. One of the sectors of the economy that is expanding at the quickest rate is online retailing.
Webshops, often known as brick-and-mortar retailers' online counterparts, are the physical equivalents of their online counterparts, known as web shops. Traditional stores made of brick and mortar have actual locations.
The key factor that is used to differentiate between the two kinds of retail enterprises is the location of the business itself. eCommerce platforms, including but not limited to GoDaddy and Shopify, are frequently utilized by online retail enterprises such as Amazon and eBay.
As a result of the fact that every website type offers something that cannot be found on any other website, the company is in a position to accommodate a wide range of customer experiences and different ways for customers to contribute financially.
Because of this, the organization can provide superior service to its clientele. It is of the utmost importance to give serious consideration not only to the most prominent benefits that may be obtained from any possibility but also to the most significant obstacles that may develop.
This is because it is extremely crucial to do so. There is no way around this precondition, so prepare yourself accordingly.
Benefits of Brick-And-Mortar Retail
We have a tonne of evidence to support our argument for physical retailers. So, the preferences of today's consumers are :
- Many categories of items are still something that the current buyer wants to touch and examine before purchasing. Customers become less reluctant and more deliberate in their purchasing selections when this is permitted.
- Customers who shop in-store want the personalized assistance they receive from the staff. Direct assistance generates more income and provides more opportunities to upsell or cross-sell to recipients.
- Compared to online retailers, B&M stores are often easier to purchase from. Comparatively, 21% of online cart abandonment can be attributed to unsatisfactory checkout procedures.
- Customers who shop in physical stores buy a product and immediately take it home, and they greatly appreciate this. On the contrary online buyers must wait for the product to be dispatched. Next-day delivery is a top priority for eCommerce.
- Shipping and fulfillment expenses for brick-and-mortar stores are significantly cheaper. A product is out of your control once it has been sold.
- Your audience can receive unique, branded experiences from a brick-and-mortar business. Online simulations of live events are frequently unreliable.
- In contrast, you may make your brand's internet experiences come to life in your physical store. Or provide a POS kiosk with the internet store.
Brick-and-mortar retail can sometimes seem to be a thing of the past due to the growth of eCommerce. However, we are all vying for the same customer's attention across all online channels; consider SEO, PPC on social media, and email marketing for online stores.
Yes, there are increasingly more US-based online shops. And absolutely, the number of physical places is still declining. But don't be deceived by these figures.
Even though not everyone buys online, B&M establishments still accounted for 84% of all retail sales in 2019. During COVID, eCommerce experienced a dramatic surge, but we cannot guarantee that this growth will continue.
Customer preferences for online versus offline buying are about evenly balanced. We'd even argue that it's changing: As NPR recently noted, several online-only companies are starting to open actual storefronts to increase their market share.
What challenges are faced by Brick-And-Mortar retailers?
Running a physical store has numerous difficulties, primarily due to high operating costs. The operation of e-commerce sites is extremely costly. However, they are insignificant in contrast to those of physical stores.
On average, let's understand how much it costs to maintain a physical location. Various cost components include -
- Cost of leasing and upkeep of a physical storefront where clients can shop. Online sellers don't have to worry about business expenses brought on by equipment, displays, and additional merchandising costs.
- For new B&M enterprises, fees for utilities, insurance, licensing, taxes, and other regulations can pile up quickly.
- A significant expense for physical establishments is labor. You can't afford to cut corners on this investment. Without competent employees, your store won't be able to provide your customers with the value they demand.
In addition to these expenses, running a physical business presents several logistical difficulties, such as:
- Failure to provide constant customer service (unlike with eCommerce)
- Possibility of in-store stockouts that would delay purchase delivery
- Limited local talent pools make it challenging to assemble teams.
These difficulties cannot be avoided. They are an inevitable part of operating a physical store. Merchants must continuously improve their skills to best deal with them to succeed in the Brick and Mortar retail sector.
The Retail Catastrophe
Due to numerous economic causes, several brick-and-mortar retailers have shut down or significantly reduced their retail presence starting in 2010 and going forward. Retailers in the US announced 9,302 shop closings in 2019, up 58% over the previous year.
Three main variables have impacted the retail apocalypse process:
1. Move to online shopping
Many business owners are rethinking the future of brick-and-mortar businesses in light of the growth of electronic commerce (eCommerce) and online firms.
Owners of physical establishments have been influenced to concentrate more on their online presence by the rapid growth of eCommerce.
2. Alterations in spending patterns
The alteration in consumer buying patterns is another aspect. Due to the 2010s' explosive expansion in the travel sector and the emergence of freelance platforms, many consumers have switched their disposable income spending from material items to traveling and dining out.
3. COVID-19 Period
Numerous retailers have been forced to close their physical sites due to the COVID-19 pandemic.
During the lockdown caused by the coronavirus, internet shopping has boosted the number of customers, which has caused brick-and-mortar businesses to switch from physical locations to eCommerce.
How to Run a Successful Brick-And-Mortar Store?
Traditional B&M stores are an endangered species. Consumers nowadays seek more than just "a location to buy products." If that's all they want, they'll likely just buy it online and do it conveniently in their own home.
They seek a better overall experience from their neighborhood shops. Here are five strategies to ensure your retail establishment gives customers more value.
1. Use strategic merchandise placement
Merchandising is about arranging items, signs, and other decor in your store to encourage interaction and sales. Merchandising's essential components include:
- Displays in the interior and outside
- Product pictures and advertising signs
- Use of color
- Light
- Store design
Strategic marketing here is essential to:
- Bring in more leads
- Convert prospects
- Boost average order value and client lifetime value
Your store must be well-organized, with sections, items, and prices readily visible. Potential shoppers won't be able to find what they're looking for if the store is organized like a rummage sale. They probably won't even attempt.
Putting attention-grabbing, high-value products on display can draw in your audience.
Cross-merchandising draws clients and can influence them to purchase related goods. For instance, retail store outfits are frequently made of multiple clothing items and accessories.
2. Provide more purchasing and fulfillment alternatives
Lack of delivery and payment alternatives is one of the main causes of cart abandonment among online shoppers who instead decide to shop in-store. Therefore, giving clients these options will go a long way toward bringing them inside your store and converting them.
Here, there are two things to consider:
- Let clients use their preferred payment methods to make transactions. This necessitates considering alternatives like mobile and smartphone payments in addition to cash, cheque, and credit card payments.
PS: You only need to offer the payment methods that are worthwhile adopting; you only need to offer some of them. - Consider providing various payment systems and procedures, depending on your sector and target market. Customers who require more time to pay for their goods may be drawn to installment plans, lines of credit, etc.
Additionally, you should provide fulfillment and shipping choices.
For instance, click-and-collect is a choice that is gaining popularity. Purchase online and pick it up later in-store.
The retail performance also depends on facilitating returns as easily and in a customer-friendly manner as possible. A quicker returns and exchange procedure results in happier consumers and uses less of your resources.
Even exchanges and store credit may be used in this situation. The key is finding out what works best for your company and what your consumers value most.
3. Deliver an original or inventive in-store event.
You won't attract customers to your store if it's "a place to buy products."
How can we create experiences that your target audience simply can't obtain anywhere else to draw them into the store?
Simple: Special in-store occasions.
For instance, Home Depot provides workshops for kids that guide parents and kids through simple creative projects.
However, by today's standards, it's critical to go further. Your goal should be to give customers an immersive in-store experience rather than just presenting stand-alone events.
For instance, Nike's "Nike Live" stores provide a range of cutting-edge experiences, like a "sneaker bar," where clients can create unique designs before buying, Areas with quick service for clients on the go, and VIP customers can use digital vending machines.
Customers have a good incentive to enter the store and stay there to explore what else the company has to offer, thanks to such creative experiences.
4. Boost Local Businesses with Digital Marketing
It ought to be abundantly evident at this point that opting for Brk n Mrtr versus e-commerce does not entail a rejection of the digital world as a whole.
On the contrary, you must use digital marketing to drive customers into your business and encourage in-store transactions.
Concentrating on local SEO, email marketing, and PPC ads makes sense since, unless you are a franchise retail chain marketer, most of your consumer base will be localized.
Organic and local SEO allows small retail businesses to become very visible.
Beacons and geofencing strategies can help draw nearby people and passersby to your store. Based on particular behavioral triggers, these technologies enable sending push alerts, Google Ads, and other promotions to specific customers.
Additionally, changing to become more interactive is digital signage. Your in-store consumers can view real-time information on digital signs, including queue positions, product availability, and more, about embracing digital transformation.
5. Boost the In-Store Experience Using Technology
Digital technology is used for more than just "wowing" in-store customers, although that certainly is part of it. Additionally, it is to increase customer engagement throughout in-store experiences or, at the very least, to minimize dull times.
This holds true for both the shopping and browsing phases of the client experience and the buying phase. Each engagement in the "art of shopping" comprises several phases. Here, the client:
- compares comparable goods
- compares product prices
- evaluates store guidelines, terms, and conditions
Giving away free WiFi, interactive digital displays, and other information-gathering tools makes browsing less tricky. Your consumers will find it simple to complete their transactions.
Home Depot is progressive by using a mobile app to provide information about specific retail locations.
Additionally, a computerized POS system streamlines the goods purchase process. Thanks to mobile POS systems, customers won't have to wait in line or meet your staff anywhere in the store because they can practically meet them there.
Finally, you must provide your customers with an omnichannel experience, with your physical store serving as just one component. Make each visit an extension of their relationship with your brand rather than a one-time interaction.
This should help you decide what to prioritize as you start your first retail business. But this is just the tip of the iceberg.
Conclusion
Brick-and-mortar businesses have been largely overshadowed by the rise of Internet shopping, which has significantly taken their place as the traditional function that brick-and-mortar enterprises traditionally had in the retail industry.
The rise of brick-and-mortar stores has been largely overshadowed by internet shopping. The number of online customers has increased significantly during the past several years.
How millennials interact with the goalposts and their high expectations regarding digital screens, individualized shopping experiences, and mobile technologies can be directly attributed to the moving of the goalposts.
This is also a direct cause of the shifting of the goalposts. In addition, the high expectations millennials have are directly attributable to the interaction described above.
Your physical retail stores can be a useful addition to your online store, which, in the long run, can benefit both of your enterprises. This can be a win-win situation for everyone involved.
To run a successful brick-and-mortar business, entrepreneurs should focus on the strategy for merchandise placements, providing alternate products & services, and providing original and inventive products & services.
Boosting this local business with digital marketing while developing and deploying technological services to enhance user experiences, delivery efficiencies, and better cost savings is the way to go for B&M operators.
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