Click & Mortar: Why the Hybrid Model is Becoming a Mainstay
As the internet has grown popularity, there have emerged several online pure players operating on a clicks-only model. Many of these e-tailers have seen impressive growth rates and had huge revenue streams during the early stage of electronic commerce and well beyond into the present day.
Startups like CDNOW.com and Amazon.com have successfully demonstrated how to utilize the internet’s remarkable capabilities for online shopping and, moreover, to tap into the multibillion-person potential of online commerce. It’s true, click and mortar is the new brick and mortar. Find out why. Read on to learn more.
The Advent of Click & Mortar
As you can see form the chart below, the click and mortar model is now outperforming the brick and mortar model by more than 140%. It’s telling as to why more department stores and many other retailers are shifting to hybrid click and mortar policies. While stores like Circuit City simply closed up shop altogether, going to a purely online model, other stores are wising up and are hybridizing their models to compete.
Online retailers, such as Staples, Best Buy, and The Gap, formed their presence on the internet after adding online capabilities. Traditional retailers use a hybrid business model, called “clicks and bricks,” which integrates the strengths of digital and physical elements of marketing. So it makes sense to blend clicks and bricks in this hybridized business model.
Virtual and physical stores each have their unique advantages, and neither can be ignored. When virtual and physical storefronts are combined, customers enjoy the best online and offline shopping experiences and click-and-bricks businesses enjoy the greatest benefits.
What is Bricks and Clicks?
According to the bricks and clicks business model, physical outlets (the brick) are combined with an ecommerce channel, or online store, to deliver a service. Alternatively, this business model is also known as “click and mortar,” “clicks and bricks,” and “clicks and bricks.”
By implementing a unified retail strategy, small businesses can take advantage of two distinct channels of sales. In light of this, combining the bricks-and-clicks business model with both channels allows businesses to offer more choices to customers while simultaneously increasing earnings and brand awareness.
Examples of Bricks & Clicks Businesses
Ecommerce has allowed large retailers to have bricks and clicks businesses by operating both physical stores and selling items online. Retail stores such as Old Navy, Petco, and DSW may also be considered brick-and-click businesses, as are big-name companies like Target and Walmart, Home Depot, Lowe’s and even Petco, Petsmart, Office Max and many others.
The bricks and clicks concept usually applies to organizations with physical locations that open online stores, though there are examples of the reverse as well, where eeommerce businesses invest in brick-and-mortar locations. They include stores like Warby Parker, Casper, and Bonobos and are usually referred to as “clicks and bricks;” of, of course, Amazon’s numerous failed experiments with Go stores.
How the Bricks & Clicks Model Works
As these examples demonstrate, bricks and click businesses can span a broad range of industries and business models. If you are already running a brick-and-mortar store, you may be considering starting an online store to offer your products online as well.
However, you may choose to open a storefront if you have a successful ecommerce business and want to sell your products in person. In the end, implementing a bricks and clicks business model will most likely be unique to your company. Naturally, bricks and clicks models generally follow a few general principles, regardless of how you implement them.
How many click and mortar locations are there nationwide? Here’s a helpful chart that will give you a better idea of just how popular this “click and collect” model has become.
Click & Mortar Statistics
➡️ Total retail sales rose from $1.38 trillion in Q4 2019 to $1.47 trillion in Q4 2020, a 6.9% increase (NFT).
➡️ E-commerce sales rose from $156.39 billion in Q4 2019 to $206.66 billion in Q4 2020, a 32.1% increase (NFT).
➡️ As a percentage of total retail sales, e-commerce sales have risen from 11.3% in Q4 2019 to 14% in Q4 2020.1 (NFT).
➡️ Click and Mortar stores convert 33% of all mobile traffic and 67% of total traffic (including in-store) (SquareSpace).
➡️ Click and Mortar stores convert 63% of walkin vs 60% of web traffic. (SquareSpace).
➡️ Average retail returns in-store are 16.5% (ReadyReturns).
➡️ Average online return rate is 35% (ReadyReturns).
➡️ 67% of U.S. consumers have used BOPUS in the past year (ReadyCloud).
➡️ Click and collect results in a 15%-49% chance for an additional in-store conversion at time of pickup (ReadyCloud).
➡️ 10% of all ecommerce sales will be BOPUS by 2025 (ReadyCloud).
➡️ 75% of shoppers that use BOPUS plan to use it again in the future (ReadyCloud).
➡️ More than 90% of retailers will offer click and collect services by 2022 (ReadyCloud).
➡️ 77% of consumers use BOPUS to be able to see, touch and use the product first (ReadyCloud).
➡️ 65% of consumers use BOPUS to eliminate the cost of shipping (ReadyCloud).
➡️ 30% of consumers use BOPUS due to its sheer convenience (ReadyCloud).
➡️ 23% of consumers use BOPUS because they can immediately return a product they don’t want (ReadyCloud).
➡️ Nearly 40% of retailers say that BOPUS helps them attract more in-store shoppers (ReadyCloud).
➡️ 13% of retailers use BOPUS to compete with giants like Amazon (ReadyCloud).
➡️ 32% of retailers use BOPUS to gain a competitive advantage (ReadyCloud).
➡️ 16% of retailers use BOPUS to attract millennial shoppers (ReadyCloud).
5 Reasons Click & Mortar is Popular
Today’s consumer has unlimited ordering options. But one thing click and mortar retailers have the upper hand on is: buy online pickup in store (BOPUS). Nearly 70% of consumers have used this method in the past year alone to order a product online and grab it at the nearest retail store (usually with curbside pickup). This eliminates shipping and related costs, eases inventory management for retailers and makes returns a snap. Here are five more reasons why click and mortar is the commerce of the future.
➡️ Flexibility of Operations: A goal of this business model is to offer customers a degree of flexibility that a single channel simply can’t provide. A brick-and-click retailer, for example, might offer its clients the option to purchase products online or in-store and have their products delivered directly to their homes or the store. A brick-and-click model can also streamline returns by allowing shoppers to make a return in a brick-and-mortar store, saving on shipping costs.
➡️ Unified Shopping Experience: Bricks and clicks retailers are also aiming to deliver a unified shopping experience, which means both your physical store and your online store must work in concert to offer customers a greater value than they would receive with either channel alone. In this case, a customer might be able to check if an item is in stock before dropping by a store to purchase it by syncing their inventory across channels.
➡️ Improved Customer experience: A better customer experience is the overarching principle behind both of these goals. In contrast to the traditional retail model, bricks and clicks can appeal to a much wider range of customer preferences. By combining two channels and offering both online and in-store shopping options, customers can benefit from the best of both worlds. As a result, they are more likely to find a shopping scenario that matches their preferences (e.g. online ordering and in-store pickup).
➡️ Brand Building & Growth: Developing brands and expanding reach is the ultimate aim of this strategy. This model allows retailers to increase their customer base by providing a better experience will hopefully increase profits and business growth.
➡️ Easier Returns: Alongside of the bricks and clicks model is the returns method. It’s no secret that at least 20% of all products purchased by consumers will be returned. That’s the average return rate, in fact. In brick-and-mortar retail, it’s about 16.5%, whereas with online retail, it increases to more than double at 35%. Helping hybrid retailers are ecommerce returns software solutions that make it easy to automate any return policy, regardless of whether or not customers are buying in store, online or buying online to pickup in store (BOPUS).
Need Even More Tips?
We leave you with this illustrated infographic to better help you understand some of the most pertinent statistics you should know about mobile commerce in 2022 and beyond.
We’ve also got you covered with a few awesome and related guides you’ll want to read sooner than later.