Term

What is Brick and Mortar?

3 MIN READ

Brick and Mortar

The term brick and mortar (also known as bricks and mortar or B&M) refers to companies or businesses that have at least one physical location (for example, a  retail shop in a mall or a building) and therefore can offer face-to-face customer experience.

In comparison with online shops, brick and mortar stores allow customers to visit a physical shop in order to see, touch and buy goods in person, which can help build a reputation for good customer service. However, brick and mortar businesses, as well as online shops, may eventually incorporate aspects of each other. For instance, online shops can open a brick and mortar location for customers to buy or receive products purchased online, and vice versa. Brick and mortar businesses may scale back their locations and focus on online sales instead.

Examples of brick and mortar stores 

One of the examples of traditional brick and mortar business is Tesco. Founded in 1919 in the United Kingdom, Tesco has operations in 11 other countries and roughly 6.800 shops. Customers can visit these stores to buy anything from groceries to electronics, clothing, and cleaning supplies. Tesco’s branch in the UK even offers customers to purchase travel insurance or take a mortgage. Combined, Tesco stores have approximately 450.000 employees and net income of around £1.320 billion.

Another example is Costco. Costco provides an annual membership for its customers, which allows them to receive cost savings and service benefits for being a member. This loyalty program has successfully attracted 100 million members with a 90% renewal rate.

Retail apocalypse 

Starting from 2010 and onward many brick-and-mortar stores have been closed completely or greatly scaled back a retail presence due to various economic factors. In 2019, retailers in the United States announced 9,302 store closings, which is 58% higher than in 2018.

There are 3 major factors, which have influenced the process of the retail apocalypse:

Shift to ecommerce

The rise of electronic commerce (ecommerce) and online businesses has led many business owners to reconsider the future of the brick-and-mortar business. The rapid development of ecommerce has also influenced owners of brick and mortar stores to focus more on their online presence.

Changes in spending habits

Another factor is the change in consumer spending habits. Because of the booming growth of the travel industry in the 2010s and the development of freelance platforms, many consumers have shifted their disposable income’s spendings towards traveling and dining out from material purchases.

COVID-19 pandemic

The COVID-19 pandemic has forced many retailers to shut down their physical locations. At the same time, online shopping has increased the number of customers during the coronavirus-related lockdown, which has also made brick and mortar businesses shift from physical locations to ecommerce.  If you want to find out how to build your own ecommerce business you can also read our Ultimate Step-By-Step Guide

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