Bricks-and-Clicks Business Model: Definition, Examples, Benefits, and Challenges

For new and existing businesses, it’s important to determine the business model your company operates within, as this defines how it brings in revenue. There are several business models available, and companies can choose to change their business model at any time to keep up with business and customer needs.

One type of business model that emerged with the creation of the Internet was the e-commerce business model. This model allowed entrepreneurs to easily sell products and services without investing in a physical storefront, while customers found online shopping more convenient.

As traditional brick-and-mortar stores saw the growing trend of online shopping, they wanted to find a way to implement this for their businesses, thus inspiring the “bricks and clicks” business model. We’ll go into more detail below about the advantages and disadvantages of implementing this model for your company.

What is the Bricks and Clicks Model?

The bricks-and-clicks model, also referred to as click-and-mortar, is a hybrid model that combines both the retail brick-and-mortar and e-commerce business models. Business owners following this model operate both an online website and a physical store.

By combining the benefits of both models, businesses can cater to clients’ diverse needs. It provides customers with the convenience of online shopping and the ability to browse, try on, or touch physical products before making a purchase. This model brings together two different sales channels and unifies them to create a better customer experience and increased sales opportunities.

 

Examples of the Bricks-and-Clicks Model

Most businesses don’t start with the bricks and clicks model; rather, they begin with one or the other and then add the online or physical store. Companies like Walmart and Target first started operating with their physical stores and then eventually added the online aspect. On the flip side, stores like Amazon and Warby Parker began as online-only stores and then opened up physical locations.

Almost all brick-and-mortar businesses today have an online presence. However, e-commerce companies don’t always see the benefits of opening a physical location. Although online shopping has become the norm for many people, several others still seek out the joy of in-person shopping.

Advantages of the Model

Let’s go through some of the advantages of following the bricks-and-clicks model.

Reach More Customers

By selling products or services both online and in person, businesses can reach more customers. The bricks-and-clicks model provides two different opportunities for people to discover your business. Physical stores allow local and more traditional in-person shoppers to organically find your store, while an online presence allows retailers to simultaneously market to consumers across the world. A store that operates through the bricks-and-clicks model is not solely reliant on local customers.

Increased Sales Opportunities

More customers, in turn, provide more sales opportunities. This model creates two sales funnels for consumers to go through. By reaching more customers and providing more opportunities for those buyers to purchase your product or service, companies can increase their revenue. An online store also allows customers to purchase items around the clock, rather than waiting for store hours.

Enhanced Customer Experience

One of the major advantages of a bricks-and-clicks model is the enhanced customer experience. The bricks-and-clicks model gives customers the benefit of shopping how they prefer. If a customer wants to buy an item online and pick it up in-store, they can. Or if they would rather buy online and have it delivered directly to their door, they have that option as well. Customers have the convenience of online shopping and the opportunity to see and touch a product before buying.

Additionally, the physical store allows retailers to offer personalized assistance and build relationships with customers. Customers can get advice on product features, help with sizing, and receive recommendations from knowledgeable staff.

This model also provides a better after-sales experience. If a buyer is unhappy with their purchase, they can easily return an item directly to a physical store. Rather than having the additional burden of mailing it in and waiting for a refund or a new item. This can help build customer trust and loyalty in the long run.

Disadvantages of this Model

There can also be a few disadvantages to implementing this model for your business as well. Here are some of the main ones.

Increased Complexity

With this business model, owners are essentially operating two businesses. If you start with one or the other, there can be a steep learning curve when adding a physical store or online aspect. You’ll need to make sure your branding and messaging are consistent, follow online trends for your online store, and ensure you have enough staff to run both physical and online locations. This can be challenging for business owners and can come with a significant investment of time and resources.

Additional Overhead Costs

Converting your business to a bricks-and-clicks model can come with a hefty price tag. The added cost of a physical store can include the location, hiring in-person staff, store security systems, and utilities. The added cost of an e-commerce site could involve building an app, investing in marketing, and routine website management. Retailers need to carefully consider the potential sales benefits of both channels to ensure that the costs of maintaining both are justified.

Channel Conflict

Bricks-and-clicks businesses do run the risk of channel conflict. One conflict is inventory-related. It’s important for businesses to maintain accurate inventory, as one channel could oversell or undersell if they are not in sync. Another issue is quality consistency across both channels. If customers have a bad experience on one channel, they are also less likely to purchase through the other. For example, if a customer receives a late package, they may assume customer service at your physical location is poor.

Conclusion

Like any business model, your business goals and industry will determine which model is best for you to follow. We hope this post provides insight into the bricks-and-clicks model and the advantages and disadvantages of implementing it. If you’re operating solely a physical or online store, you may want to decide if the next step could be going hybrid and expanding to a bricks-and-clicks business model.

Also Read:

The Advantages and Disadvantages of the Ecommerce Business Model

What is the Retail Business Model and How Does it Work?

Advantages and Disadvantages of the Brick-and-Mortar Business Model

 

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