Bricks-and-Mortar Retail: Everything You Need to Know

Despite the convenience of e-commerce, I truly believe that nothing can fully replace the experience of shopping in a physical store. That's why we're going to explore the world of bricks-and-mortar retail, giving you a comprehensive guide to navigating this evolving industry. After reading this article, you'll gain valuable insights into customer behavior, store design, and effective strategies to not only survive but also thrive in the current retail environment.

What is Brick and Mortar?

Brick and mortar is a type of business model that relies on having a physical store where customers can browse, try, and buy products or services. Some examples of common brick-and-mortar businesses are: 

Brick and mortar businesses can offer customers a more personal and interactive shopping experience, as well as the opportunity to inspect the quality of the products before purchasing them.

Pros of Brick and Mortar Stores

• Instant Gratification: Unlike online shopping, brick and mortar stores provide customers with instant satisfaction. Shoppers can take home their purchases immediately, eliminating the wait associated with deliveries.
• Try Before You Buy: The ability to try on clothing, test products, and experience items firsthand remains a significant advantage. This feature minimizes the need for return logistics and costs, which often plague online retailers.
• Social Interaction: Brick and mortar shopping offers a social dimension that online platforms can’t replicate. Friends and family can shop together, share opinions, and enjoy a sense of community while browsing.
• Customer Experience and Relationship Building: Face-to-face interactions allow businesses to create personalized and memorable customer experiences. Establishing a connection with customers through storytelling and genuine interactions can foster brand loyalty and advocacy.
• Increased Sales Channels: Operating both online and brick and mortar stores expands the reach of businesses, accommodating diverse customer preferences and ultimately driving more sales.
• Security and Trust: In-person transactions provide a sense of security that online transactions may lack. The risk of cyberattacks and data breaches is significantly reduced, enhancing customer trust.

Cons of Brick and Mortar Store

• Labor Costs: Managing a brick and mortar store necessitates hiring and paying employees, including considerations like benefits and training.
• Higher Overheads: Initial setup costs, rent, utilities, and other overhead expenses can be substantial compared to starting an online store.
• Time-Consuming: Launching and running a brick and mortar store demands a significant time investment, potentially diverting attention from other business ventures.
• Limited Store Hours: Unlike online stores that operate around the clock, brick and mortar stores are constrained by opening hours, affecting accessibility for customers.
• Geographical Constraints: Customers must physically travel to the store, limiting the reach to those within proximity. This challenge can be mitigated with pop-up stores and strategic expansion.
• Scalability and Reach: Expanding a brick and mortar presence involves intricate logistics, from finding suitable locations to hiring additional staff, which can hinder rapid scalability.

Expenses for Running a Brick and Mortar Store

Running a brick-and-mortar store involves several key expenses:

1. Rent: This is often one of the largest costs. Commercial rental space averages $37.66 per square foot in the U.S., but can vary widely by location. Typically, rent accounts for 5-10% of a store's overall operating expenses.
2. Inventory: This is a major expense, often making up about one-third of first-year costs for new stores. Effective inventory management is crucial to control these costs.
3. Labor: Staffing costs include wages, salaries, and benefits. With rising minimum wages, this is a significant expense. The average hourly wage in the U.S. adds to these costs.
4. Utilities and Maintenance: These variable expenses cover electricity, water, heating, and equipment upkeep. They can account for a substantial portion of operating costs, especially with increasing energy prices.
5. Marketing: Expenses for advertising and promotions can range from $500 to $10,000 per month, depending on the scale and methods used.
6. Insurance: Various types of coverage are needed, including property, liability, and workers' compensation insurance.
7. Technology: POS systems and other necessary equipment can cost upwards of $2,000 for initial setup.
8. Licenses and Permits: These can range from $200 to $2,000 depending on your location and type of business.

Overall, the total cost to cover the first year of a retail store's life is estimated to be around £172,000 ($220,000) on average, according to UK research. However, this can vary significantly based on factors like location, store size, and type of merchandise.

Ecommerce vs Brick and Mortar: What’s the difference?

In the world of retail, the terms “ecommerce” and “brick and mortar” are often bundled together, sharing the overarching label of “retail.” However, it’s essential to recognize that beneath this common facade lies a world of differences that distinguish these two realms. 

Factor	Ecommerce	Brick and Mortar
Location	No physical location Transactions occur online	Physical storefront or multiple locations Physical presence for transactions
Transactions	No cash payments Uses online platforms like PayPal, cryptocurrency etc.	Traditionally accepted cash and card Now also accepts digital wallets
Marketing	Digital marketing (paid search, social media, email campaigns)	Traditional marketing (leaflets, TV, radio, billboards, newspapers)
Human Interaction	Less immediate human interaction Higher card abandonment rates	In-person staff support Immediate query resolution leading to better conversions
Expenses	Platform costs (e.g., Shopify) Shipping, returns, customer acquisition costs	Rent, wages, hardware, POS software Property tax, inventory warehousing

1. Location

The most apparent distinction lies in their physical presence. 

Ecommerce stores transcend the boundaries of brick and mortar, devoid of a physical location. Transactions take place virtually, with items ordered through digital shopping carts and subsequently shipped to customers. 

On the other hand, brick and mortar establishments embody a tangible storefront or a network of physical stores. The convergence of both domains is increasingly prevalent, with businesses recognizing the potential of operating in tandem to amplify sales.

2. Transactions

Traditionally, brick and mortar transactions involved card or cash payments. However, the digital age has ushered in a shift, prompting the adaptation to digital wallets like Apple Pay and Android Pay. 

Ecommerce stores, while incapable of accepting cash, offer versatile payment options through online platforms like PayPal and even cryptocurrency like bitcoin.

3. Marketing

Divergence persists in marketing strategies. Brick and mortar stores embrace conventional methods such as leaflets, television, radio, billboards, and newspapers. 

In contrast, ecommerce stores leverage the power of digital marketing, harnessing paid search, social media, and email campaigns. 

As the digital realm expands, brick and mortar stores have yet to fully harness its potential, particularly in data collection—a facet that offers untapped advantages.

4. Human Interaction

The digital realm lacks the immediacy of human interaction. Card abandonment rates of approximately 80% in the online space highlight the absence of real-time support. This gap is bridged by brick and mortar stores, where attentive staff can answer queries and address concerns, significantly boosting conversion rates and customer satisfaction.

5. Expenses

While it’s often assumed that brick and mortar setups entail higher costs, the reality is more nuanced. Ecommerce stores may seem cost-effective initially, leveraging platforms like Shopify, but hidden expenses emerge. Shipping, returns, customer acquisition, and competition-induced customer loss contribute to the overall cost. 

Brick and mortar stores entail expenses like rent, employee wages, hardware, POS software, property tax, and inventory warehousing. 

Here is the table comparison of ecommerce vs brick and mortar:

How Mobile is Revolutionizing Brick and Mortar Stores

Gone are the days when traditional physical stores existed in isolation; the era of mobile-driven brick and mortar experiences is upon us, reshaping customer interactions, igniting growth, and propelling businesses toward unparalleled success.

Mobile Optimization Beckons Shoppers In

The allure of mobile experiences is proving irresistible to shoppers. A study by Think with Google found that when people shop, their smartphone is now their go-to advisor and assistant. This means big opportunities for retailers to be there and be useful in shoppers’ micro-moments. 

The power lies in creating an engaging virtual storefront that beckons potential customers, ensuring that your brand remains at the forefront of their minds when proximity allows a visit.

Seamless In-Store Experience

Customers who relish a seamless mobile shopping encounter anticipate a harmonious in-store extension. Interactive kiosks, barcode scanners, and Wi-Fi connectivity are transforming traditional spaces into tech-infused havens. A visit to your brick and mortar store should mirror the ease and convenience your customers experience online, fostering a consistent and delightful journey.

Unlock the Power of Location-Based Advertising

Modern advertising has evolved, and location-based targeting is taking center stage. Google AdWords, Yelp, Foursquare, Groupon, and Living Social present potent avenues for local businesses to connect with potential customers. 

By catering to the specific needs and preferences of nearby consumers, these platforms enable you to magnify your store’s presence, boosting foot traffic and enhancing brand visibility in the local community.

Paid Search: Elevate Awareness and Footfall

Harnessing the potential of paid search enables you to amplify your store’s visibility to local audiences. With the ability to include your store’s address, telephone number, opening hours, and even distance from the user’s location, paid search is a formidable tool for generating footfall. 

The option for users to set reminders when near your store injects urgency, translating to increased physical visits and heightened engagement.

From Showroom to Sale

The concept of showrooming is ushering in a new era of shopping behavior. Shoppers are visiting brick and mortar stores to experience products firsthand before making online purchases. 

You can capitalize on this trend by providing an immersive in-store experience complete with Wi-Fi access, local shipping options, and readily accessible reviews. Also, embrace the transformation of your store into a showroom, enticing customers to explore and engage.

Embrace Mobile Payment Technology

The dawn of mobile payment technology is upon us, revolutionizing the checkout process. Companies like Scandit are at the forefront, integrating mobile barcode, object recognition, and augmented reality to streamline transactions. 

This evolution translates to enhanced customer satisfaction, reduced staff requirements, decreased hardware expenses, and the advent of digital receipts.

Empower with Digital Receipts and In-Store Rewards

As paper receipts yield to digital counterparts, customers relish the convenience of receiving transaction details directly on their mobile devices. The emergence of mobile wallets and payment options like Apple Pay heralds a new era of digital commerce. 

Leveraging this shift, businesses can craft tailored promotions, reward schemes, and feedback requests on digital receipts. Additionally, in-store exclusive rewards and concierge services inject an element of exclusivity, incentivizing visits and fostering a sense of loyalty.

How Point of Sale (POS) is Revolutionizing Brick and Mortar Stores

Amidst a myriad of options, several game-changing features underscore the profound impact of POS systems on the brick and mortar landscape.

Swift Product Lookup

Efficiency is paramount in the bustling world of retail. A cutting-edge POS system facilitates swift product lookup through intuitive commands, allowing staff to promptly access popular items. This expedites the shopping process, enhances customer satisfaction, and empowers employees, ultimately elevating the shopping experience. POS solutions like Vend exemplify this efficiency-enhancing feature.

Versatile Payment Methods

The modern shopper demands flexibility in payment options. An advanced POS system embraces diverse payment methods, including mobile payments and split transactions. This inclusivity caters to evolving customer preferences, enhancing convenience, and broadening the scope for completing transactions seamlessly.

Streamlined Bulk Product Imports

Simplicity reigns when a POS system empowers businesses to upload a plethora of products en masse. This invaluable feature eliminates the arduous task of individually uploading each product, particularly beneficial for establishments with extensive inventories. The efficiency and time-saving prowess of this functionality can be exemplified through platforms like Shopify POS.

Searchable Customer Information

Customer-centricity takes center stage as POS systems facilitate quick and comprehensive access to customer information. Whether for returning items, updating contact details, or enrolling customers in loyalty programs, seamless access to searchable customer data fosters personalized interactions, strengthens relationships, and enhances overall customer satisfaction.

Insightful Reports

In the pursuit of data-driven decision-making, robust reporting capabilities become indispensable. A transformative POS system delivers a range of insightful reports, enabling businesses to gauge performance comprehensively. From a consolidated dashboard displaying vital statistics to detailed product, employee, and customer reports, the analytical prowess of a POS system informs strategic initiatives, drives growth, and empowers businesses to thrive.

Tips to Stand Out With Your Brick and Mortar Store

A successful brick-and-mortar store isn’t just about location; it’s about building a connection with every customer who walks through the door. With so many options available, it’s essential to find creative ways to stand out and leave a lasting impression. Let’s discuss how you can make your Brick and Mortar store truly shine in a competitive market.

Is a Brick & Mortar Store Right for You?

Deciding whether a Brick & Mortar (B&M) store is right for you depends on several factors. Below is a comprehensive guide to help you make this decision:

1. Nature of Your Product or Service:

• Tangible Products: If you’re selling products that customers typically want to touch, feel, or try before buying, like clothing or furniture, a physical store might be beneficial.
• Service Oriented: Some services, like hair salons or restaurants, inherently require physical spaces.
• Experience-Based: Products or services that provide an “experience” (e.g., artisanal coffee shops) can benefit from a physical location.

2. Customer Demographics and Behavior:

• Some customer segments, especially older generations, might prefer shopping in-person rather than online.
• If your target audience values personal interaction, expertise, and immediate satisfaction, a B&M store could be advantageous.

3. Financial Considerations:

• Startup Costs: Physical stores can have high startup costs, including rent, utilities, interior setup, and initial inventory.
• Ongoing Costs: Rent, utilities, salaries for in-person staff, and maintenance are ongoing costs to consider.
• Profit Margins: Physical stores might have higher operating costs, which could affect your product pricing and profit margins.

4. Brand Image and Marketing:

• Presence: A physical store can enhance brand visibility, acting as a continuous advertisement in its locality.
• Trust: Physical locations can foster trust, as customers perceive them as more “real” or legitimate.
• Experiences: B&M stores can offer unique in-store experiences, promotions, or events that can act as a marketing tool.

5. Competition and Market Saturation:

• If there’s a high density of competitors in your desired location, it might be difficult to stand out.
• However, if there’s a gap in the market, a B&M store could give you a competitive edge.

6. Flexibility and Commitment:

• Physical stores generally require more commitment in terms of leases and operational hours.
• Consider your willingness to be tied down to a specific location and regular operational hours.

7. Operational Complexity:

• Managing a physical store can be more complex than an online store, requiring inventory management, staff scheduling, in-store promotions, and more.

8. Integration with Online Channels:

• Omnichannel Strategy: Many successful retailers today combine online and offline sales channels. A B&M store can complement your online store, providing a place for returns, pickups, or in-person customer service.
• Local SEO: Having a physical location can boost your local search engine rankings, driving more local customers to both your online and offline channels.

Conclusion

We've explored the key elements of bricks-and-mortar retail, highlighting the challenges and opportunities in this ever-changing landscape. To really succeed, I believe retailers must embrace innovation and find ways to blend their physical store with online strategies, creating a seamless customer journey.

FAQs

1. What is bricks-and-mortar retail?
Bricks-and-mortar retail refers to physical stores where customers can browse and buy products in person, as opposed to shopping online.

2. Why is bricks-and-mortar retail still relevant in 2025?
Despite online growth, physical stores remain important for offering personalized experiences, building customer trust, and showcasing products.

3. What challenges do bricks-and-mortar retailers face today?
Retailers face challenges like rising rent costs, competition from e-commerce, and the need to integrate digital solutions to stay competitive.

4. How can physical stores compete with e-commerce?
Stores can focus on experiential shopping, in-store events, and integrating technology like mobile checkout and click-and-collect options.

5. Is it worth investing in a bricks-and-mortar store now?
Yes, if paired with a strong digital strategy, as physical stores can enhance brand presence and customer engagement when done right.