According to Shopify, ecommerce revenues are expected to reach $4.8 trillion by 2021. This statistic may not be surprising, what may surprise you, however, is that although ecommerce continues to thrive, 90% of retail purchases are still made in-store. So, where does this leave small business owners?
Although there’s nothing wrong with solely running a brick-and-mortar store or an ecommerce business, many business owners have implemented a “bricks and clicks” business model—in which they combine physical and online operations into a single retail strategy. How does a bricks and clicks business work? Is it worth investing in for your business?
We’re here to help.
In this guide, we’ll explain everything you need to know about the bricks and clicks business model, including tips for how to best implement this retail strategy, which you can also find summarized in the infographic below.
What Is the Bricks and Clicks Business Model?
As we briefly mentioned above, the bricks and clicks business model refers to the combination of a physical retail location (the brick) and an ecommerce sales channel, or online store (the click). This business model is also sometimes called “brick and click,” “click and mortar,” and “clicks and bricks.”
In essence, this business model allows small businesses to take advantage of two unique sales channels by implementing a unified retail strategy. This being said, combining both channels with the bricks and clicks business model gives businesses the opportunity to offer more shopping options to customers—while also increasing their earnings and potential brand reach.
Examples of Bricks and Clicks Businesses
With the growth of ecommerce, most large retailers have implemented the bricks and clicks business model—running retail stores as well as selling their products online.
Therefore, big-name companies like Target and Walmart could be considered bricks and clicks businesses, as well as retail stores such as Old Navy, Petco, and DSW.
This being said, although the bricks and clicks concept is most commonly applied to businesses with physical locations that then open an online store, there are examples of the reverse—popular ecommerce businesses investing in brick-and-mortar locations.
In this case, these stores are usually referred to as “clicks and bricks” and include retailers like Warby Parker, Casper, and Bonobos.
How Does the Bricks and Clicks Business Model Work?
As you can see by these examples, the bricks and clicks business model can encompass a variety of different types of businesses across many industries.
You might currently run a brick-and-mortar store and decide to start an online store to offer your products through an ecommerce experience as well. On the other hand, you might currently run a successful ecommerce business and decide to open a storefront to bring your products to customers in-person.
When it comes down to it, therefore, the implementation of a bricks and clicks model will likely be unique to your specific business.
This being said, however, regardless of how you implement this model, bricks and clicks generally functions based on a few common principles:
- Flexibility of operations: One of the goals of this business model is to offer customers flexibility that you wouldn’t be able to offer with a single channel. As an example, brick and click retailers can offer customers the choice of purchasing products online or in-store and having their orders delivered either to the store or shipping directly to their home. Similarly, returns can be streamlined in a brick and click model, giving shoppers the ability to make a return in the physical store to save on shipping costs.
- Unified shopping experience: Similarly, another goal of the bricks and clicks model is to provide customers with a unified shopping experience, meaning your two channels (your physical store and your online store) need to build upon each other in cohesion and offer greater value than you would receive by simply having one or the other alone. In this case, an example might be that syncing your inventory across channels allows customers to check if an item is in stock before heading to a store to purchase it.
- Improved customer experience: Both of these goals contribute to the larger principle of improved customer experience. Instead of catering to a single customer channel preference, the bricks and clicks model can cater to a wider range of customer desires. With two channels that work together, customers can access the best of both worlds and are more likely to find a shopping scenario—for example, ordering online and picking up in-store, that meets their preferences.
- Brand building and growth: Finally, of course, the ultimate goal of this strategy is the success of your business. By reaching more customers and providing a better experience, you’ll hopefully access increased profits and business growth. To this point, although perhaps less tangible, implementing the bricks and clicks model allows you to increase brand awareness and reach—especially through integrated advertising and marketing strategies.
Pros and Cons of the Bricks and Clicks Model
With all of this information in mind, before we dive into our tips for implementing the bricks and clicks business model, it’s important to understand the possible benefits and drawbacks of doing so.
In our discussion of how this business model works, we touched on some of the advantages, but we’ll list out both the pros and the cons here:
- Reach more customers: In addition to providing in-store experiences for customers, an online channel distributes goods far outside a local community to global consumers.
- Analytics can improve offerings: Using web analytics tools can help a physical store refine in-person offerings while meeting customers in a physical location can provide real-time feedback for a better online presence.
- Provide a better customer experience: The bricks and clicks model allows retailers to cater to a wide range of customer preferences while remaining competitive.
- Potentially cost-prohibitive: Operating both an ecommerce and brick-and-mortar location comes with additional overhead costs, such as buying a store security system and paying regular website management costs.
- Comes with a learning curve: For digital native or brick-and-mortar-only brands, learning how to leverage a new sales channel can present a challenge.
- Increased time investment: Inventory management across two channels, turning online analytics into action, and lessening discrepancies between the online and offline experience requires more time to implement and manage.
As you can see, although there are impressive benefits to turning your operations into a brick and click business, there is also a sizable investment when it comes to time, money, and resources.
Therefore, before you decide to grow your business with a new sales channel, you’ll want to evaluate the possible risks and rewards. In doing so, it may be helpful to talk to industry experts or business advisors, perform research into trends in your specific industry, as well as create financial projections.
Moreover, before diving into the bricks and clicks model, you’ll want to work on a detailed plan that specifies what actions you’re going to take, how you’re going to implement them, what resources and funds you’ll need, and how long it will take to complete these initiatives.
How to Implement the Brick and Click Model: 8 Tips for Success
As we’ve mentioned, much of the implementation of the brick and click model will be unique to your business and industry.
First and foremost, of course, the process will depend on whether you’re adding an ecommerce arm or retail location to your existing strategy. As you might imagine, the latter will be much more involved, requiring you to decide where to put your store, finding a location, purchasing or renting the real estate, etc.
By comparison, adding an online store to complement your brick-and-mortar operations will be a much simpler process. In this case, the first step will be creating and launching your ecommerce website—or adding products with a shopping cart element to your existing website.
Overall, however, regardless of your specific situation, there are some areas of your business you’ll want to focus on when implementing the brick and click model. Here are eight tips to help you do just that:
1. Use a robust point of sale system.
The right point of sale system is integral to any brick-and-mortar business, and therefore, any bricks and clicks business. You’ll want to ensure that your existing POS, or any system you purchase, is all inclusive—allowing you to integrate key parts of your operation—payment processing, inventory, team management, etc. across online and offline channels.
Ideally, your POS system will be able to integrate directly with your ecommerce website, giving you the ability to manage your retail location and online store all the more seamlessly. To this end, all-in-one POS systems like Clover or Square are great for managing brick and click businesses.
2. Level up your merchandising.
To promote your products both online and offline, you’ll want to ensure that you’ve thought about your merchandising and the best way to draw customers in through each respective channel.
For your brick-and-mortar store, you’ll want to think about how your displays are placed, which products you highlight throughout the store, and how customers will best navigate the space. For your online store, on the other hand, you’ll want to focus on product photography, descriptions, and the best way for customers to virtually complete the order process.
Of course, your ultimate strategy will be different for your online store compared to your retail shop, but in both cases, your brand’s feel, style, and messaging should be consistent.
3. Keep inventory consistent.
As we discussed above, one of the biggest benefits of the brick and click model is that it offers customers the ability to browse online and purchase in-person and vice versa. To ensure that customers have an ideal experience, therefore, it’s important to keep your inventory consistent and synced across both channels.
Again, the right point of sale system can help with this process. Depending on the type of business you run, you might also opt to invest in a separate inventory management software.
4. Make shipping and returns easy.
Not only will you want to offer shipping and returns for both online and in-person purchases, but you’ll want to make sure that you do so in the easiest way possible. Ideally, customers should be able to place an order online or in-store and have it shipped to their home, as well as be able to return items by mail or in-person.
To this end, you’ll want to establish your shipping and returns policies from the beginning and make sure they are properly communicated to customers. Additionally, you’ll want to make sure you choose the right shipping provider who can make the process as simple and as affordable as possible—for you and your customers.
5. Don’t skip mobile optimization.
If you’re adding an ecommerce branch to your physical retail location, you’ll want to ensure the website and shopping cart process you create are both mobile-friendly. Customers should easily be able to browse your online store and complete orders using their mobile devices, whether tablets or smartphones.
6. Leverage your analytics.
As we mentioned earlier, one of the benefits of the bricks and clicks business model is that it gives you the opportunity to access web analytics and use these tools to improve your in-person and online experience.
Therefore, when you create your online store, you’ll want to see what kind of analytics tools the ecommerce platform offers and determine the best way to track and gain insight from your sales and customers.
7. Focus on customer engagement.
In order to implement the brick and click model, you’ll want to encourage feedback from your customers and engage them in any way you can. Not only will focusing on customer engagement give you access to insights you can use to improve both arms of your business, but it also will make your customers feel appreciated, heard, and hopefully, encourage brand loyalty—in which they buy from your business again and again.
This being said, you might engage customers by sending email surveys, creating a cross-channel loyalty program, offering in-store and online discounts and promotions, as well as by encouraging feedback and interactions on social media platforms.
8. Create a singular brand experience.
Of course, the goal of a brick and click business is to create a singular brand experience across two very different sales channels. So, what can you do to achieve this goal?
Ultimately, by following all the tips we’ve listed here, you should be actively contributing to reaching that goal. Specifically, however, you might also think about how you integrate the “offline” and “online” from a business branding perspective. How do you inform customers of your online store within your physical location?
How do you advertise across both channels? How do you ensure that your brand is consistent in both places?
Overall, these are questions you’ll want to ask yourself as you go through the process of implementing a brick and click strategy—the unified brand experience should always be top of mind.
At the end of the day, with the retail industry constantly changing, it’s likely that the bricks and clicks business model will become more prevalent among small and large businesses alike. After all, by implementing an omnichannel sales strategy, the hope is that you’ll access more customers, more sales, and eventually, more profit and business growth.
This being said, however, before you decide to add a “bricks” or “clicks” element to your current business model, you’ll want to determine whether it’s the right path for your business to take—especially considering the investment in time and resources.
Ultimately, if you do decide it’s right for you, it’s important to create an implementation plan ahead of time and focus on some of the high-level areas—like your point of sale system, inventory integration, and customer engagement strategy—that we discussed above (which are also illustrated in the infographic below).
Randa Kriss is a senior staff writer at Fundera.
At Fundera, Randa specializes in reviewing small business products, software, and services. Randa has written hundreds of reviews across a wide swath of business topics including ecommerce, merchant services, accounting, credit cards, bank accounts, loan products, and payroll and human resources solutions.