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What Is a Brick-and-Mortar Store?

What is a brick-and-mortar store, and do you need one to have a successful retail business? Brick-and-mortar refers to the traditional retail store format with physical locations where customers go to shop. And though the COVID-19 pandemic changed much about the retail landscape, brick-and-mortar stores are still the go-to choice for many shoppers who want to look at items before purchasing, pick out their own produce or simply enjoy a day of shopping with friends.

With that in mind, let’s look at what brick-and-mortar stores are and how to better promote them. We also explore the advantages and disadvantages of owning these establishments and the alternatives.

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What is a brick-and-mortar store?

Brick-and-mortar businesses are physical establishments where customers purchase products or services and interact face-to-face with employees. This relatively new term helps people distinguish stores with physical locations from online retailers. For comparison, brick-and-mortar stores are the local supermarket or a neighborhood Target location versus Amazon, which is an online retailer. Brick-and-mortar stores are the primary way many people shop for goods or services.

What are the different types of brick-and-mortar stores?

While all brick-and-mortar retailers have physical locations, they don’t all sell the same things or use the same selling format. Examples of stores that fall under the brick-and-mortar umbrella include grocery stores, department stores, specialty stores, drugstores, discount stores and convenience stores.

Looking at the various types of brick-and-mortar stores helps you recognize the differences. For example, convenience stores are small and target people who only need a few things and want to get in and out quickly. Department stores sell a wide variety of items for one-stop shopping, while specialty stores focus on particular types of items and can offer a greater variety than department stores. For instance, art supply stores usually have a better selection of paints and brushes than Walmart.

Do brick-and-mortar stores also need an online presence?

Many brick-and-mortar stores are successful without online stores, and some types of stores don’t work as well as online stores. For example, gas stations require customers to go to the physical location to pump gas into their vehicles. The items sold inside the store are meant for quick, impulsive purchases for people in a hurry, so online stores don’t make as much sense.

Many retail stores, however, can benefit from also offering online shopping. If you don’t want to ship items, you can provide online shopping for in-store pickup as a convenient alternative. Whether you add an online store comes down to the type of business you have and your capacity to manage another kind of sales.

Ways to promote brick-and-mortar stores

Physical store locations get some customers from foot traffic, but you also need to promote the store to attract enough customers. Attractive, highly visible signage serves as advertising to people who drive or walk by your store. You can use traditional print advertising, but online marketing is often more effective and typically saves money. Paid online ads can target consumers who fit your ideal customer persona or live in your area, and if you have locations in populous areas, you might even choose radio or TV ads to hit your key demographics. You can also promote online for free through social media platforms such as Pinterest, Facebook and Instagram.

Advantages of owning brick-and-mortar stores

When starting a retail business, your choices are brick-and-mortar, e-commerce and hybrid alternatives. With that in mind, several advantages exist to having a traditional, physical storefront, including:

  • Allowing consumers to peruse and test products in person
  • Creating an immersive, branded shopping experience
  • Providing instant gratification to shoppers
  • Satisfying those who prefer in-person shopping experiences
  • Creating legitimacy for your business with a physical presence
  • Letting customers ask employees questions about the goods or services
  • Relationship-building with customers through in-person contact
  • Greater opportunities for sales via in-store displays, enticing ambiance and persuasive sales tactics
  • Capturing customers through foot traffic

Disadvantages of owning brick-and-mortar stores

Before you start scouting physical locations for your retail business, note that brick-and-mortar stores also have drawbacks. Look at the disadvantages to make sure the pros outweigh them. Here are some of the drawbacks of running brick-and-mortar stores:

  • Higher costs associated with running the store, such as the cost of rent, utilities, heat, water and transaction fees, as well as employee salaries
  • Space limitations, since you can only offer a certain amount of product at in-person locations
  • Hours or locations may be inconvenient for some customers
  • Requires customers to travel to the location, which can be time-consuming and less attractive compared to shopping online
  • Challenges of hiring enough staff and retaining them to keep the store fully staffed

Expenses of starting and running brick-and-mortar stores

Financial investment is one of the biggest barriers for people who want to start brick-and-mortar stores. Research the upfront costs and ongoing business expenses that come with physical store locations before you make your decision. Common expenses include:

  • Monthly rent for the retail space
  • Required licenses and permits
  • Business entity formation fees
  • Commercial Insurance
  • Signage
  • Updates and repairs to the space to fit your needs
  • Decor
  • Shelves, displays, checkout counters and other fixtures
  • POS systems, computers, software and other technology
  • Marketing
  • Inventory
  • Packaging materials, such as bags and tissue paper
  • Toilet paper, soap and cleaning supplies for bathrooms
  • Employee wages
  • Professional services, such as accounting, payroll, cleaning and legal services
  • Utilities

The amount of money you need to open a store depends on many factors. These include your geographical location, the store’s location within your city, the size of the location, what you sell and specialty items you might need, depending on your store type.

Alternatives to having brick-and-mortar stores

If a traditional retail store doesn’t fit your needs or budget, you have other options for getting your business going. Some of the most popular alternatives to brick-and-mortar stores include:

E-commerce stores

E-commerce sites are easy to operate, relatively low-cost and a popular avenue for shoppers who appreciate the convenience of online shopping. These online stores require little overhead costs compared to brick-and-mortar establishments.

They also let you start selling your products without the time and expense of setting up a physical storefront. Some consumers, however, worry more about the legitimacy of a new online store, so it could take longer to grow trust and build a customer base. You also have shipping and website costs to consider.

Food trucks

If you want to operate a restaurant but don’t want the expenses that come with it, consider a food truck business. This alternative is much more affordable and lets you travel to high-traffic areas and events to reach new audiences. A food truck can be a good starting point, allowing you to open a permanent restaurant location eventually. The menu options, however, are limited when you’re cooking quickly in a small space.

Kiosks

Kiosks provide a physical presence in a high-traffic location without the upkeep and expenses of brick-and-mortar stores. Kiosks are cubicles or open-fronted structures that let you display your products or services and attract customers to learn more about them. Malls are popular spots where you can rent a kiosk—you often see them throughout mall hallways.

You can operate a kiosk seasonally or year-round, depending on your sales trends and preferences. For example, you often see temporary kiosk businesses around the holidays selling gifts, decorations, holiday food or calendars.

Farmers markets

Many cities hold regular farmers markets where local businesses showcase their products and services on a weekly or monthly basis. At a farmers market, you rent a small area and set up a table to display your most popular goods or services and interact directly with potential customers.

Small businesses looking for more exposure and cost-effective ways to bring in sales often find farmer’s markets attractive options. The farmers market, however, might limit what types of items you can sell, so review the terms before deciding on this route. Farmers markets might also be limited to the summer months in cooler areas.

Pop-up shops

A pop-up shop is an alternative that lets businesses operate brick-and-mortar stores on a temporary basis. Business owners usually rent commercial or retail real estate for a short time and outfit and operate the location as a brick-and-mortar store. This may increase awareness of your business without requiring the long-term commitments of traditional brick-and-mortar stores.

Mobile retail units

Mobile retail units are essentially food trucks for other types of businesses, such as clothing or jewelry companies. This option works for businesses that want to move to different areas to increase awareness of their company without the overhead expense of a pop-up shop or brick-and-mortar location. You can use social media to advertise where your mobile retail unit is stopping next to keep customers up to date on your whereabouts.

Though online sales and pickup and delivery options have lessened the impact of physical retail shopping, brick-and-mortar stores are still important and profitable. By learning how to balance lost foot traffic sales with other methods of reaching customers, you can keep your brick-and-mortar location operating smoothly.

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