Brick-and-mortar stores are retail stores where business owners showcase their products using a physical storefront. Customers visit the store to view products, shop, and purchase goods.
What is a brick-and-mortar store?
A brick-and-mortar store is a commercial location where business owners display their products using a physical storefront. Customers visit the store to browse products, talk with sales representatives, try products, and buy goods.
How does a brick-and-mortar store work?
Brick-and-mortar stores sell products to customers who stop by and shop. The store attracts passersby with an appealing storefront (perhaps with eye-catching promotional displays). Here’s how that might look:
Once customers enter the store, they browse and interact with the products they are considering purchasing. There may be an option to try the item in the store’s fitting room.
Sales associates are often available to assist customers in this process. They may greet customers, answer questions, and check inventory availability. The ultimate goal is to lead the customer to the checkout counter to complete the purchase.
Brick-and-mortar stores can also function as centers for multi-channel retailers that offer experiences like in-store events, local pickup, online buying with in-store pickup, or online purchasing with in-store returns.
Advantages and disadvantages of brick-and-mortar stores
What are the strengths of opening a brick-and-mortar store? And what are the weaknesses? Let’s take a closer look at both.
Advantages
Access to customers who don’t shop online: Not everyone uses the internet. Sure, it has a global penetration rate of 92%, but there are still potential customers you could lose by going solely to e-commerce.
High operating costs: Retail stores come with significant costs such as rent, utilities, maintenance, and employee wages, which can be burdensome, especially for small businesses.
Competition: The retail industry is highly competitive, with other brick-and-mortar and online stores selling similar products, often at lower prices due to their larger scale and lower costs.
Brick-and-mortar stores vs. e-commerce
Brick-and-mortar stores have existed for centuries. They allow customers to interact with products and employees at first glance, providing instant satisfaction by getting products immediately.
E-commerce refers to buying and selling products online. It has become popular because customers can shop from anywhere at any time from the comfort of their homes.
Here are some differences between brick-and-mortar stores and e-commerce:
Physical interaction: Brick-and-mortar stores allow customers to physically interact with the product before purchasing, while e-commerce businesses do not offer this experience.
Operating costs: Brick-and-mortar stores incur higher operating costs such as rent, utilities, and maintenance. Online stores have lower operating costs but may have significant expenses related to website maintenance and warehouse technology.
Reach: Brick-and-mortar stores have limited reach, mostly to local customers, whereas online sellers can access a global market.
Delivery: In a brick-and-mortar store, customers receive the product immediately after purchase. In e-commerce, there’s a waiting period for product delivery.
Returns and exchanges: Returning and exchanging products can be more straightforward in local businesses, while online businesses may require shipping and longer waiting times for processing.
Types of brick-and-mortar stores
There are various types of brick-and-mortar stores, let’s take a closer look at these different types:
Department stores
Saks, Sephora, and Nordstrom are examples of department stores in the physical world. Department store sales in the United States were estimated to be around 11.4 billion dollars in April 2023, which is equivalent to the amount collected in April 2019.
Stores
Specialty Goods
An example of this is specialty goods stores like Home Depot, CVS, and Petco. In most cases, shoppers visit specialty goods stores after they have a specific item in mind.
Grocery Stores
Grocery stores are another example of retail in the real world. Brands like Walmart, Trader Joe’s, and Costco have a presence in most states.
Convenience Stores
Convenience stores are small retail businesses that operate for long hours and are located in easily accessible locations. They carry a range of everyday items such as groceries, snacks, candies, pharmaceuticals, sodas, tobacco products, and newspapers, and are often priced slightly higher due to their accessibility.
Examples of Brick-and-Mortar Stores
To understand how a brick-and-mortar store works and operates, let’s take a look at some practical examples. Here are some successful companies in the brick-and-mortar store space:
Wildling
Wildling is a German shoe retailer that opened its first physical showroom last year. It utilizes the Shopify POS system, which integrates seamlessly with its e-commerce platform, to display real-time inventory availability, manage stock, and track orders.
Beauty Heroes
Beauty Heroes was a successful online retailer wanting to open its first brick-and-mortar store. The company combined dual channels – online and offline – using a single point of sale (POS) system.
Neighborhood Goods
An increasing number of direct-to-consumer brands are collaborating with retailers to showcase their packaged goods to consumers in high-traffic areas.
Yardbird
Yardbird is an excellent example of a real-world business as an outdoor furniture company due to its success in enhancing customer experiences through a mix of online presence and physical retail.
Peak Design
Peak Design, which originated from Peter Dering’s idea to make carrying a camera easier, now operates both online and in physical stores in New York, San Francisco, and Japan.
Burberry
The luxury retailer Burberry opened its first physical store in Shenzhen, China, in 2020. However, unlike most retailers, it didn’t open the store with the vision of selling more products. Instead, the company aimed to provide immersive retail experiences for its customers.
How to Open Your First Brick-and-Mortar Store
Let’s go through seven steps you can take to open your first brick-and-mortar store:
1. Find the Right Location
It can be tempting to make an offer to lease a store in a busy shopping area. More foot traffic means more retail sales, right? Not necessarily.
There are various factors you should consider when choosing the right space for your store, including but not limited to: where your customers are located, traffic, competitors, and accessibility.
2. Choose a Point of Sale (POS) System
The next step in opening a brick-and-mortar store is selecting a point of sale (POS) system. This is the device that will allow you to accept payments from shoppers in-store. Platforms like Shopify POS accept most payment methods – including those made through mobile apps and credit cards.
The best part? If you’re opening the store to complement your e-commerce store, Shopify POS integrates seamlessly across both channels. The in-store technology keeps you updated on inventory levels, helping manage stock across different sales channels. You’ll also be able to offer click-and-collect services (like buying online and picking up in the store).
3. Hire and Train Sales Associates
Sales associates are the face of your store and are likely the first hires you will make in your store. They provide the first point of contact for any shoppers in the store who need assistance, help drive sales, and manage traffic to your store.
When
You find your first sales assistant, their daily tasks may include:
- Greeting customers and assisting them with their purchasing process
- Processing payments using your POS system
- Handling returns and product exchanges in-store
- Creating visual merchandising displays to attract passersby
- Promoting brand loyalty programs
4. Inventory Management
Inventory management is the process of tracking products available for sale.
Inventory management in retail is notoriously inaccurate. Retailers often struggle to sell out-of-stock products if inventory being sold through various channels isn’t managed.
Managing inventory can be challenging. It’s a balance between having too little inventory (and thus nothing to sell) and having too much inventory (which could become damaged, go out of style, or take up excessive space in your store).
Track in-store inventory by integrating it with your online inventory. For example, Shopify displays stock levels for each item as soon as it is sold either online or in-store.
5. Pop-up Store Experiences
Pop-up store experiences are a great way to test a brick-and-mortar store. Instead of committing to a one-year lease, other retailers offer their space to new businesses.
The DTC brand Gymshark tested its own pop-up store in London. In an effort to drive product sales and provide excellent experiences, Gymshark hosted free workout classes for anyone visiting the location.
Birchbox also opened its first pop-up shop to test brick-and-mortar retail. It hosted pop-up experiences in various locations across the U.S. and created a permanent store in the most popular site: New York.
6. Integrating In-Store Shopping with E-Commerce
We’ve briefly touched on the fact that you can use your physical presence to support online sales. Multichannel retailing – that combines both shopping channels – has become the norm rather than the exception.
The simplest way to do this is to collect your customers’ email addresses when they shop in-store. You can use this information to retarget them in the future, whether bringing them back to their local store or to buy online.
Consider encouraging in-store shoppers to share their purchases with friends as well. Recommendations from friends and family are the most credible forms of advertising. Make people talk about your store by rewarding them for doing so.
7. Get a POS System for Your Brick-and-Mortar Store
It’s clear that the shopping experience in brick-and-mortar stores is not going away. According to Shopify President Harley Finkelstein: “Retail will never die, it will always change and evolve based on consumer needs. The key is to be adaptable.”
If you’re considering exploring brick-and-mortar retail for your own business, follow the steps above to get started today.
Take the leap from clicks to bricks with Shopify’s POS system.
Shopify POS is the easiest way to expand into real-world retail. Get quick setup and manage all your sales channels from Shopify’s interface.
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