Brick-and-Mortar
The phrase “brick-and-mortar” denotes several concepts in the spheres of business and commerce, which are all interconnected. Firstly, brick-and-mortar means that a business has a physical incarnation in a form of a shop or a store, and uses its own manufacturing or warehousing facilities. But in general, a brick-and-mortar business refers to a traditional type of business activity, which involves an actual operating store or an office working directly with customers, as opposed to e-commerce basing solely on online activity.
In most cases, brick-and-mortar is used to contrast a conservative, long-established business method of working via shops situated in buildings with more contemporary forms of business like online shops or transitory business forms. The term might also be found in the pre-Internet era as well, distinguishing traditional businesses from those working on a mail ordering basis.
What is Brick-and-Mortar business
A brick-and-mortar business is typically a retail store, or a chain of retail stores, or a service office of an entity, and it might operate in various business spheres, from grocery retail to banking. The core feature is that it has an actual location, and there’s direct interaction between employees and customers, and the entity’s products are usually available for customers to be observed and personally inspected before purchasing.
The term itself originates from the Herman Melville’s novel Moby Dick, and mentions typical materials used for building construction, although the term describing a business model refers to all kinds of buildings, not only those built of the mentioned materials.
Stores and offices functioning as key elements of brick-and-mortar business provide people with a variety of advantages. A visitor of such a place can demand for a salesperson’s assistance and advice, have a good look at a product he or she intends to buy, in most cases it’s available to try a product before purchasing and select the most attractive option from a line of similar products.
The emotional aspect of purchasing products from a store is also important for some people, as it provides a special experience and an immediate satisfaction from buying. At the same time, as the traditional business model requires more expenses due to the necessity to maintain and pay for its physical locations, as well as the need to pay salaries to a larger number of employees, the prices in such stores and offices are often higher than the prices for the same or similar products from the retailers working online.
Brick-and-Mortar current state
Businesses operating as brick-and-mortar are obliged to present their income and other data in regular reports to certain state institutions of their jurisdictions. Organizations like these traditionally report it over specified periods of time (usually once a quarter and annually), evaluating a revenue from their departments existing for a period longer than one year, typically in comparison with performances over previous periods. On a larger scale in terms of macroeconomics, brick-and-mortar organizations performance is usually assessed once a month, while the results of e-commerce are reviewed per quarter.
According to the information received in recent years, the revenue of brick-and-mortar businesses declines, while the income of the Internet-based companies is increasing. Latest reports show that the sales of e-commerce organizations are of more than $500 billion over the year.
The decrease of brick-and-mortar business is generally connected with more favorable prices of their online-only competitors, the convenience of products being delivered right to a customer, a wider choice of goods, and general availability of such resources. As a result of the rise of e-commerce, several well-established retail chains were forced to reduce their presence, or even shut down completely.
The growing decline of brick-and-mortar has received massive press coverage in various media, but despite some losses, such a model of commercial activity is far from gone. Many services are practically impossible to be made available online, with some instances being beauty parlors, gas stations and car washes, restaurants which main feature is their ambience, etc. The abovementioned institutions and similar places still work successfully nowadays, so the brick-and-mortar method is changing, but isn’t going to disappear any time soon.
The major changes happening to traditional retailers are connected with moving some of their activities online, giving their visitors a possibility to shop via the Internet, or providing them with online catalogs, or ordering delivery. This creates a hybrid business system, which gets more and more popular, as many online-only retailers are getting some brick-and-mortar elements as well. It’s now becoming a common practice for large organizations which started as e-commerce entities to open actual stores. Although it happens in lower levels and sometimes is limited to one or several stores only, a movement towards convergence between two systems is difficult to be dismissed.
