Bricks and Clicks, Advantages of Bricks & Clicks Business Model

6th July 2021 0 By indiafreenotes

Bricks and clicks, or omnichannel retail strategy, is a jargon term for a business model by which a company integrates both offline (bricks) and online (clicks) presences, sometimes with the third extra flips (physical catalogs). Many retailers also offer telephone ordering and mobile phone apps, with most providing telephone sales support. The wide uptake of smartphones made the model even more popular, as customers could browse and order from their smartphone whenever they had spare time. The model has historically also been known by such terms as clicks and bricks, click and mortar, bricks, clicks and flips, and WAMBAM, i.e. “web application meets bricks and mortar”.)

Bricks and clicks is a term for a business model by which a company integrates both offline (bricks) which means shops and stores plus online (clicks) presences. Additionally sometimes retailers add a few extra flips added such as catalogue, telephone ordering and mobile phone apps and telephone sales support. The initiation of mobile web has made businesses operating bricks and clicks businesses very popular, because it means customers can do tasks like shopping when they have spare time and do not have to be at a computer. Most of the bricks and clicks customers like to use mobile shopping sites. A common example of the bricks and clicks model is when a chain of stores allows the customer to order products both online and physically in one of their stores, also allowing them to either pick-up their order directly at a local branch of the store or get it delivered to their home.

An example of the bricks and clicks model is when a chain of stores offers consumers a choice of purchasing products either online, or physically, in one of their stores, which may subsequently be either picked-up at one of their retail stores (click and collect, curbside pickup), or delivered. The model has many alternative combinations, as well as the related omnichannel concept of showrooming where customers try on clothing in person but the actual purchased product is ordered in-store on the retailer’s website and delivered to their home later. By the mid-2010s, the success of the model had discredited that the Internet would render traditional retailers obsolete through disintermediation.

Home delivery

The default model in e-commerce is one of browsing and ordering online, with goods sent from a warehouse, or in some cases, a retail store. One of the first known purchases from a company arguably operating a bricks and clicks business model was a Pizza Hut pizza ordered over the internet in 1994. The great surge in adoption of the bricks and clicks model came around 2000, with large retailers, such as Walmart, starting websites that allow users to browse some of the same goods that they would find in store from their personal computer screens.

Advantages

Bricks and clicks is beneficial to various segments. For example, supermarkets often have different customer types requiring alternative shopping options; one group may wish to see the goods directly before purchase and like the expediency of quickly shopping, while another group may require a different convenience of shopping online and getting the order delivered when it suits them. Thus, having a bricks and clicks model means both customer groups are satisfied.

For companies

The bricks and clicks model has typically been used by traditional retailers who have extensive logistics and supply chains, but are well known and often respected for their traditional physical presence. Part of the reason for its success is that it is far easier for a traditional retailer to establish an online presence than it is for a start-up company to employ a successful purely online one, or for an online only retailer to establish a traditional presence, including a strong and well recognised brand, without having a large marketing budget. It can also be said that adoption of a bricks and clicks model where a customer can return items to a brick and mortar store can reduce wasted costs to a business such as shipping for undelivered and returned items that would traditionally be incurred.

For consumers

A bricks and clicks business model can benefit various members of a customer base. For example, supermarkets often have different customer types requiring alternative shopping options; one group may wish to see the goods directly before purchase and like the convenience of shopping in person on short notice, while another group may require a different convenience of shopping online and getting the order delivered when it suits them, having a bricks and clicks model means both customer groups are satisfied. Other previously online-only retailers have stated that they have found benefit in adding a brick-and-mortar presence to their online-only business, as customers can physically see and test products before purchase as well as get advice and support on any purchases they have made. Additionally, consumers are likely to feel safer and have more confidence using a bricks-and-clicks business if they already know the brand from a brick-and-mortar store.

Disadvantages

For firms

A major factor in the success or failure of this business model is in the control of costs, as usually maintaining a physical presence paying for many physical store premises and their staffing requires larger capital expenditure which online only businesses do not usually have. Conversely, a business selling more luxurious, often expensive, or only occasionally purchased products like cars may find sales are more common with a physical presence, due to the more considered nature of the purchasing decision, though they may still offer online product information. However, some car manufacturers such as Dacia have introduced online configurators that allow a customer to configure and order complete cars online, only going to a dealership to collect the completed car, which has proven popular with customers.

“On the other hand, an online-only service can remain a best-in-class operation because its executives focus on just the online business.” It has been argued that a bricks and clicks business model is more difficult to implement than an online only model. In the future, the bricks and clicks model may be more successful, but in 2010 some online only businesses grew at a staggering 30%, while some bricks and clicks businesses grew at a paltry 3%. The key factor for a bricks and clicks business model to be successful “will, to a large extent, be determined by a company’s ability to manage the trade-offs between separation and integration” of their retail and online businesses.

For consumers

  • Some argue that online shopping, which makes price comparison easier for customers, encourages a ‘race-to-the-bottom’, where retailers only compete on price, with quality and service deteriorating as a result. This is especially prevalent when comparison shopping websites such as mySupermarket allow prices to be compared without even visiting a retailer’s website.
  • The prices listed online may not match the prices listed offline. The reasons for this include mis-management, and economics (overhead cost of an online purchase and an offline purchase is different). This may result in confusion and deviations of expectations for the buyers.
  • Buyers may end up buying more items than they need, because online businesses are able to show them more items, more promotions, and more advertisements.