What is a Brick And Mortar Retail and how it works


Tipswalet. What is a Brick And Mortar Retail and how it works –  Later we are increasing with the word Brick-And-Mortar in the business world? Do you really understand what it means? And what are the goals of this type of business? And how can it be said to “grow old but still gold”? Well, let’s discuss one by one so that we can provide enlightenment as well as good business opportunities for you.

What are Brick And Mortar

Brick and mortar ever with? This sentence refers to traditional roadside businesses that offer their products and services to their customers directly. Usually, they are people who need goods urgently. These customers will come to the office or store owned or leased for the business. Local grocery stores and corner banks are examples of brick and mortar companies. Brick-and-mortar businesses find it difficult to compete with most web-based businesses like Amazon.com Inc. This is because usually, these businesses have lower operating costs and greater flexibility.

Understanding Brick And Mortar

Many consumers still prefer to shop and explore in a physical store. In brick and mortar stores, consumers can talk to employees and ask questions about products or services. Brick-and-mortar stores have the ability to offer a shopping experience where consumers can test products such as video games or laptops at BestBuy or have lunch at Nordstrom cafes while shopping at the store. The brick-and-mortar business also gives consumers instant satisfaction when a purchase is made.

Another reason why this business can survive is the security of banking transactions. Some consumers worry about using their credit cards online and often associate legitimacy with brick-and-mortar businesses. They assume that physical presence can foster a perception of trust. However, there may be a disadvantage for companies running brick and mortar stores including costs associated with building leasing and employees. In addition, the brick and mortar business must also think of other costs for conducting transactions, and utility costs such as electricity, heat, and water.

Measuring the Performance of Bricks and Mortars

Don’t underestimate, On a per store basis, retailers who are publicly traded usually report the same-store sales, or comparable store sales, in income reports that are arranged quarterly and yearly. This financial metric provides a performance comparison for stores established from retail chains over a specific period of time. Bricks and mortars are usually shaped like restaurants, grocery stores, and general goods stores, using these numbers to evaluate their financial performance to guide corporate decision making regarding their stores for business progress.

At the macroeconomic level, the U.S. Census Bureau releases monthly retail sales figures and e-commerce retail sales figures every quarter. For all of 2018, retail & food service sales totaled more than $ 714 billion for general goods stores, which include department stores, warehouse stores, and supercentres. The growth rate is quite low, which ranges from 3.2% compared to 2017.

Non-store retail, which goes beyond traditional brick and mortar, such as direct sales and e-commerce (door to door) posted 2018 sales of almost $ 679 billion for the year. The growth rate from 2017 to 2018 is at 9.6%.

[Important: Although many brick and mortar stores find it difficult to compete with most web-based businesses such as Amazon.com, or E-bay, companies like Costco compete and grow. It offers services to its members such as buying online and picking up at the store. This is one strategy that is quite interesting considering that similar companies are unable to survive due to circumstances]

Digest and Summary of the material above:

Brick and mortar refer to traditional roadside businesses that offer their products and services to their customers directly. This service is provided to customers who come to offices or stores owned or rented for the business.

Brick and mortar stores have a hard time competing with most web-based businesses like Amazon.com Inc. and E-bay. This is because usually, this business has lower operating costs and greater flexibility.

However, the importance of brick-and-mortar models has given confidence by several large online e-commerce companies that opened physical locations to realize traditional retail excellence.

A Brick-and-Mortar Example that is Successful Today.

The perspective that brick and mortar businesses will not be able to survive coupled with the presence of the Amazon will make it possible for people to think that the brick-and-mortar business model is old-fashioned. However, it was all flatly denied by the presence of Costco. This company proves that the trend is not true.

Costco Wholesale Corporation (COST) is a retailer company with a membership system. These companies charge annual fees ranging from $ 60 to $ 120 for each customer or their member. Consumers receive cost savings and service benefits to become members. Costco has almost 100 million members and the update rate of 90% of these members is great right?

Costco beat Amazon at the top internet retailer in a consumer survey conducted by the American Customer Satisfaction Index. At least, Costco has sold 10,000 products on its website and offered consumers the choice to buy online and opt in stores, which helped offer its members an attractive alternative to Amazon.

The Future of Brick-and-Mortar Companies

The rise of e-commerce and online businesses has made many people consider the condition of the future brick-and-mortar business. Judged, this type of business should also use services electronically to facilitate their business. For example, some brick and mortar grocery stores, such as Safeway, allow customers to shop for groceries online and send them to the front door in just a few hours. The increasing prevalence of this hybrid business model has spawned branch terms such as “click and mortar” and “brick and click.”

Despite considerable sustained growth in the wider brick-and-mortar landscape, many traditional retailers close shops across the country including Gymboree, The Limited, Radio Shack, and Gamestop. Not only was Sears bankruptcy, but Payless ShoeSource declared bankruptcy and liquidated all of its 2,100 units.

Read Also: 5 Chance Online Business With Low Risk And Low Capital

On the other hand, the importance of brick-and-mortar models has given confidence by several large online e-commerce companies that opened physical locations to realize traditional retail excellence. For example, Amazon.com Inc. has opened brick and mortar stores to help market their products and strengthen relationships with customers. They realize that good relations with consumers will expand their business. In addition to opening a cashier-free grocery store in Seattle and dozens of bookstores across the country, Amazon also bought Whole Foods food in 2017 for $ 13.7 billion. This is a step that many analysts say is an act of urging Amazon to strengthen its physical retail presence.

Great Reason To Make Brick-and-Mortar Adapt in a service business.

That is the reason, some types of businesses, such as those operating in the service industry, are more suitable for brick-and-mortar forms. Business fields such as hair salons, veterinarians, gas stations, car repair shops, restaurants, and accounting companies will be more advanced by using this system. It is important that marketing strategies for brick-and-mortar businesses highlight the benefits consumers have when buying at a physical store.

Obviously, the retail landscape has changed, and brick-and-mortar stores must adapt to the changing technological landscape to avoid becoming the next Sears or Payless.

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