The Brick and Mortar Digital Dilemma

brick and mortar retailer

According to Wikipedia, Brick and Mortar retailers are defined as: a company that possesses or leases retail shops, factory production facilities, or warehouses for its operations. More specifically, in the jargon of e-commerce businesses in the 2000s, brick-and-mortar businesses are companies that have a physical presence (e.g., a retail shop in a building) and offer face-to-face customer experiences. The term is usually used to contrast a transitionary business or Internet-only presence, such as fully online shops, which have no physical presence for shoppers to visit, talk with staff in person, touch and handle products and buy from the firm in-person.

Since the Internet emerged as a ubiquitous form of communication and commerce, brick and mortar retailers have tried to capture the essence of the pure e-commerce business through investment in operations, online properties and leveraging 3rd party technologies. This is where the brick and mortar digital dilemma comes in. Brick and mortar has something that pure e-commerce does not which is in-person physical presence where customers can browse, buy, touch, smell, interact with people among many other significant advantages. These advantages do come with a premium overhead price that e-commerce does not invest in. Brick and mortar requires people and inventory to be stocked in premium physical location(s) so customers actually come into the store which is referred to as in-store traffic.

Like e-commerce websites, when customers go into physical stores they have a high propensity to buy something. Creating web and in-store traffic is a common goal that both business avenues share. The world has and is still changing to the point where e-commerce has support from brick and mortar and brick and mortar also is investing heavily in their e-commerce business. The point is, these businesses are very different in their core revenue generation, in fact, they are probably exact opposites. Where brick and mortar is on average 80% in-store and 20% online, e-commerce tends to be 100% online revenue generation. But with more support from brick and mortar businesses, you could say e-commerce is 80% online and 20% supported by other businesses which may be e-commerce (such as Amazon) and brick and mortar(e.g. Target & Walmart). 

Currently, we are heading toward the point where brick and mortar retailers are experiencing a burgeoning growth in their e-commerce revenue. That revenue, as cited by a recent Star Tribune article, is growing substantially. However, the bottom line in the article is that the new revenue is still less than or around that 20% of total revenue. Customers will once again be back to shopping at brick and mortar stores because they enjoy all the attributes of people, physical locations, and having all their senses with them while shopping.

The time to invest in online advertising to drive in-store traffic is now. Why is this so important? Brick and mortar stores are not e-commerce. They need to support the 80% of revenue that still walks through their front door. While e-commerce is important to brick and mortar, it should be looked at as creating a new physical location (expansion) and not as advertising. E-commerce is an investment that requires ongoing maintenance and awareness. Advertising online is so critical because if you are not in front of your customers, your competition is. In fact, if you are not spending your advertising dollars online, you are missing out on the opportunity to protect the future of your brick and mortar business. It’s like the old adage, if a tree falls in a forest and no one is around to hear it, does it make a sound? Well, one thing is for sure, if you do not advertise online, no one will hear you, including your customers. 

Contact us today for a free business discovery today and see what the Internet can do for you! Sales(at)trybrick(dot)com

Star Tribune Article