Click and Mortar
Refers to a company with both an online and offline business, i.e., an e-commerce website and a physical store.
A click-and-mortar business refers to a company with both an online and offline business, i.e., an e-commerce website and a physical store.
Unsurprisingly, these companies offer their customers the benefits of quick and easy online transactions from the comfort of their homes and the convenience of testing products in person at a physical location.
In this sense, such a business model offers tough competition to traditional businesses that operate offline or online.
It is an omnichannel business model approach, meaning it provides customers with a seamless shopping experience regardless of how they choose to purchase different goods and services.
Currently, nearly all companies have an online presence - whether through an e-commerce website or simply through social media (for instance, an Instagram shop). However, many online stores don’t have a physical location for shoppers to go to.
NOTE
Click-and-mortar stores are also known as ‘clicks and bricks.’ We may switch between these two terms as this article progresses.
Differences between Click and Mortar and Offline Stores
Since click-and-mortar companies operate differently from brick-and-mortar stores, certain differences are likely to arise between the two.
The following section explains these differences.
The table given below maps out the distinguishing feature between the two business approaches:
| Click and Mortar Stores | Brick and Mortar Stores |
|---|---|
| Products are sold to consumers in person as well as online. | Products are sold to consumers in person, where they can physically touch and look at the product. |
| It allows for quick and easy shopping in the comfort of your home. | It requires stepping outside the house and physically going to the store to make a purchase. |
| Most businesses accept only digital payments through credit cards, bank transfers, or digital wallets. However, some may accept cash on delivery. | Payment is made in person and can often be done with contactless cards or cash paid directly to the cashier. |
| They are more likely to use online marketing strategies as a large portion of the business revenues come from online sales. | They may indulge in more traditional, offline marketing strategies. |
Hence, as the table suggests, both business approaches are different. Though they have some overlapping features, it is important to understand which one fits your company best before implementing it.
Examples of Click And Mortar
Let us look at a hypothetical example of a clicks and bricks business model.
Suppose Marco opens a pet clothing brand called ‘January Coats and Collars,’ which sells winter clothes and accessories for dogs and cats.
Although his brand was initially a direct-to-consumer business that primarily operated online, he became overwhelmed by setting up pop-ups at pet gatherings and shows.
To resolve this issue, he decided to open a permanent physical store on a popular street in New York City.
He gained more traction and expanded his annual sales by 60% while also reducing expenses on digital marketing and building brand recognition.
His brand, January Coats and Collars, is an example of a clicks and bricks business approach.
In this case, Marco’s store serves as a showroom for his products. Consumers can bring their pets in to try out coats or collars before purchasing.
Such stores also often have kiosks allowing consumers to place online orders inside the shop.
Although the business started as an e-commerce company, Marco transformed it to realize the benefits of both the physical and online stores.
NOTE
In the real world, companies like Best Buy, Walmart, and Nordstrom are all examples of clicks and mortars as they allow shoppers to make purchases online or in person at their convenience.
Legislations for Clicks and Bricks
Just like businesses that operate solely online, clicks and bricks businesses must ensure that their online sales comply with online purchase regulations.
Similarly, purchases made from their offline stores must comply with consumer rights regulations.
The Federal Trade Commission of the US sets clear guidelines on advertising, both online and offline, protection of consumer information, and deception.
Since the onset of COVID-19, many businesses have transitioned from a pure brick-and-mortar approach to online and offline stores, expanding the e-commerce space.
Banks further facilitated this transition by offering cash-back credit to online purchases beyond gas and grocery shopping.
While this shift has several benefits, it is important to ensure that companies making this transition are regulated sufficiently, and consumers’ rights are protected.
Certainly, the requirements for each company vary depending on their business activity, location, and governing body. However, a few licensing requirements are common for many companies:
- Basic business operation license - license from the city or local county where the business operates.
- DBA/fictitious business name registration - filed with the state or local jurisdiction.
- Special state-issued business licenses - for companies that sell firearms, liquor, gasoline, and lottery tickets.
- Health department permits - for restaurants and firms that sell food items.
NOTE
The list of compliance regulations is long. Yet, it is important for companies following the clicks and bricks approach to ensure that it complies with the regulations that apply to them.
Advantages and Disadvantages
The following section considers the pros and cons associated with click-and-mortar stores.
Let us first consider the advantages:
- Brick-and-mortar stores are bound to the customers within a certain geographical location. By adding an e-commerce platform for its stores, the company can expand its consumer base and outreach.
- On the other hand, consumers are often hesitant to buy certain products online and prefer testing them in person before making the purchase. In this scenario, having a physical location where consumers can try out the product (e.g., clothes, shoes, electronics, etc.) before making the purchase is advantageous.
- Additionally, allowing for face-to-face interaction when needed as well as the convenience of online shopping, helps build consumer trust.
- Most click-and-mortar firms tend to have a competitive edge over rivals who follow a strictly in-person or online sales approach.
- Having an e-commerce store in addition to a physical location allows goods to be sold virtually to any consumer within the company’s shipping zone, allowing the company to maximize sales.
- The company can increase its prospects for cross-selling and upselling products by adding more touchpoints and sales channels through which customers can learn about and purchase from the company.
Now, let us look at the disadvantages of this strategy:
- Monitoring and streamlining different operations associated with both online and offline selling can be challenging and time-consuming.
- In the case of e-commerce platforms, customer information is vulnerable to cybercrimes. Hence, it is important to ensure that the company’s digital platform has tight security and an efficient technical team to support it in case of a breach.
- Shifting from a brick-and-mortar business to incorporating an e-commerce platform can be costly in upgrading the website, developing an app, and hiring more staff to assist with the operations.
- Shifting from an online store to incorporating a physical location is associated with additional costs in terms of insurance for property, liability, etc.
Additionally, compared to their online counterparts, physical firms incur extra expenditures such as utility bills, transportation expenses, employee benefits, salaries for more staff, etc.
Key Takeaways
- A click-and-mortar business strategy is one where the company incorporates online and offline shopping for its customers into its operations.
- Unlike brick-and-mortar stores that sell their goods and/or services in a physical location, click and mortar allows for easy shopping.
- Here, the customer can choose whether to go to the physical location to purchase the product or buy it online from the comfort of their home.
- Best Buy, Walmart, and Nordstrom are all companies with physical stores and e-commerce platforms for their customers. They serve as a good example of click-and-mortar companies.
- Like any other business, click-and-mortar stores must abide by certain regulations. However, these may vary depending on the laws under the geographic locations that they operate within.
- The biggest advantage of click-and-mortar stores is that they allow consumers the choice of experiencing the product in person before buying it while also providing the option of buying from the comfort of their homes.
- The biggest disadvantage of this business approach is the challenges accompanying an expansion of operation from a physical store to an e-commerce platform and vice versa.
- Overall, the likelihood of a company surviving the transition to this business approach depends on its management and how well its operations are under control.
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