Brick and Mortar

Brick andmortar businesses offer goods and services through physical outlets. The term is used to demarcate physical stores from e-commerce outlets like Amazon. Customers consider brick and mortar businesses more credible.

It is the traditional way of buying or selling goods. When it comes to the relationship between buyers and sellers, brick-and-mortar outlets still do better than e-commerce. Characteristically, a brick-and-mortar business has a high cost of setting up. Additionally, operating expenses are also higher than other business models.

• Brick and mortar is an ancient business model where goods and services are sold to customers from a physical outlet.
• The physical stores have a footfall of local buyers. These customers can personally see, touch, and feel the products.
• There can be different forms of brick-and-mortar outlets: supermarkets, grocery stores, convenience stores, departmental stores, superstores, discount stores, and specialty stores.
• Due to large-scale storage problems, they offer a limited range of products.

The term brick and mortar store are used often. These stores operate from a building. Think of that age-old grocery store operating much before e-commerce started delivering stuff at the doorstep.

This business model traces all the way back to 800 BC when Greek merchants traded at the city center. From 1700 to the 1800s, many "mom and pop shops" ran across the US. Vendors also sold their produce at roadside stalls. The industry witnessed tremendous growth in the mid-1800s and the early 1900s. That is when the department stores came into existence.

Characteristically, in a physical outlet, customers can interact with the seller face to face, clarify doubts, and try out products before purchasing them. As a result, recurring customers develop a relationship with the outlet. Owing to familiarity and credit history, the stores even allow purchases on credit. Unfortunately, physical stores suffered losses with the advent of the digital world. Now most customers shop online even for their necessities. However, traditional outlets will never disappear.

Now, a physical store can be set up in any of the following formats.

1. Supermarkets and Grocery Stores: This retail outlet sells household goods, food products, and consumables.
2. Convenience Stores: For daily necessities, convenience stores sell eggs, milk, fuel, etc.
3. Department Stores: These are multi-utility stores that offer a variety of products under one roof—electronics, appliances, clothing, jewelry, home décor, and accessories.
4. Discount Stores: These outlets offer the products at a very low price without compromising on quality.
5. Specialty Stores: These outlets offer niche products—for example, a dog food store.
6. Superstores: A superstore is a blend of all the above,  available at a single location.

#1 - Costco Wholesale

The most renowned US multinational company, Costco Wholesale Corporation, has a chain of big-box retail stores worldwide. The chain sells appliances, electronics, furniture, computers, outdoor living, jewelry, organic food, etc. It was designated as the world's fifth-largest retail chain in 2020.

#2 - AT&T Wireless

The US telecommunications company AT&T Wireless provides several services such as entertainment, account management, and parental controls. In addition, the company has many retail stores assisting customers personally.

Whether online or offline, every business requires marketing strategies to draw the attention of prospective buyers. Next, the product quality and the shopping experience determine whether the customer will shop again.  A brick-and-mortar store has a limited target market since it is mainly explored by local buyers. The best marketing strategy for such a business is to ensure high levels of customer satisfaction.

Alternatively, physical stores can advertise on local media, like newspapers, radio, and local events. In addition, the stores can send discount coupons, send emails, and call potential clients.

Recently, many physical stores have added ecommerce features to their business. They are resorting to social media marketing, targeting prospective buyers on Instagram, Facebook, and similar platforms.

The physical stores have a legacy. It is still the widely accepted business model throughout the world. Following are its advantages:

1. Personalized Experience: The customers can easily view, feel and select products in person before making a decision. Physical stores are an experience, each with its own unique ambiance. These factors especially benefit products aimed at children.
2. Credibility: Customers can physically visit a store in case of grievances. As a result, physical stores have more credibility over e-commerce and other business models.
3. Customer Satisfaction: Many customers still prefer nearby stores for daily utilities. Customers derive satisfaction out of the instant purchase, by picking the product personally rather than ordering it online.
4. Word of Mouth Publicity: if the customers like a product or service, they recommend it to friends and family.

The disadvantages of operating a physical store are as follows:

1. Colossal Investment: It is an expensive affair since setting up a brick-and-mortar store requires investing in infrastructure.  
2. Significant Operating Cost:  Operating a physical store requires various regular and recurring expenses like salary, electricity, advertisement, inventory, and property tax.
3. Restricted Customer Base: Because of the geographical limitation, a physical outlet can capture only target customers from its vicinity, shrinking its market reach.
4. Ecommerce Trend: Customers prefer saving time by opting for online purchases.  It is hard for traditional physical stores to compete with the convenience offered by e-commerce.
5. Open Hours Restraint: The physical stores have fixed timings for opening and closing every day. Also, many such outlets have a day off every week. Therefore, unlike the online shopping platforms, customers cannot shop at any hour of the day.
6. High Product Prices: Since the fixed costs associated with such businesses are high, the prices of the products sold are higher than those offered by an e-commerce store.
7. Limited Variety: Since most physical stores have large-scale storage problems, they offer a limited range of products.

Historically, physical retail stores were the only business model known to the consumers. However, with the evolution of the digital era, e-commerce has rapidly emerged as a more convenient way of shopping. E-commerce businesses sell their products and services online using shopping websites and social networking sites.

Compared to physical stores, e-commerce has a significantly larger clientele, expanding across a country and beyond. Setting up an e-commerce enterprise costs less.

The brick-and-mortar stores predominantly prefer traditional payment methods like cash and card payments. In contrast, ecommerce businesses primarily accept payment through online transfers and cash on delivery. E-commerce enterprises resolve issues by employing robust customer relationship systems to interact with and assist online customers. They offer SMS, emails, phone calls, and chatbot support.

This has been a guide to what is brick and mortar and its Meaning. Here we discuss brick and mortar businesses, marketing, stores, and how they work. You can learn more about from the following articles -

• Business Structure
• Business Operations
• Types of Business Entities
• Business Expenses