What Do You Mean by Brick-and-Mortar Store (With Benefits)

By Indeed Editorial Team

Published November 30, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

If you're thinking of starting your own business, one of the first steps is deciding whether you want to have an online company or a brick-and-mortar location. You may think that an online business is more feasible because you don't worry about the overhead costs associated with a physical location. Knowing the importance of a brick-and-mortar store can help you decide whether it's suitable for your business idea.

In this article, we provide the answer to "what do you mean by brick-and-mortar," explore the benefits and importance of having a physical location for a business, review the costs associated with operating a brick-and-mortar store, and highlight differences between e-commerce and brick-and-mortar stores.

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What do you mean by brick-and-mortar store?

You may be wondering, "What do you mean by brick-and-mortar store?" A brick and mortar location is a business that sells services and products to clients in an office or store that the owner owns or rents. A physical location usually provides consumers with an opportunity to go and speak to employees in person. Shopping at a brick-and-mortar location typically provides you with a chance to try on or test the product before committing to the purchase.

Why brick-and-mortar stores are still important

While it may seem that starting your business online is the most cost-effective option, there are still several reasons why consumers prefer brick-and-mortar stores rather than completing their shopping online. Here's a list of other benefits to having a brick-and-mortar-store for you to consider:

Consumers have an opportunity to speak with employees directly

Some customers typically like having the ability to get employee thoughts and guidance on products before buying them. Employees in the store have likely sold the product before and may know what other customers say about it. While in the store, consumers can ask questions and they have a chance to see the product in person. If consumers have problems with the product, they can take it back to the store, ask questions about specific features, or ask the staff to teach them how to use it. Personal interaction can help customers feel more pleased with their purchases.

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Consumers get instant gratification

Many customers don't want to wait for product delivery, despite the convenience. There may be occasions when the need for the product is immediate, and waiting for the product to arrive when ordering online isn't sufficient. Brick-and-mortar locations provide consumers with instant gratification because they can buy the product and own it immediately.

Consumers get to test the product

When consumers shop at a brick-and-mortar location, they get an opportunity to hold, see, and test the product before buying it. Some consumers research the product online or read performance reports and reviews before going to the store. Once the consumer is confident in the quality of the product and its ability to meet their needs, they can feel sure about making the purchase.

Consumers have increased trust

With regular reports about data breaches, many consumers are wary about submitting their credit card information online. They may prefer in-person shopping when they worry about who has access to their information. For some consumers, the physical presence of a company increases the perception of trust, making the purchase easier.

Consumers appreciate a personal touch

While some consumers enjoy the convenience of online shopping, many others prefer to shop in a physical store. Shopping in a physical store provides consumers with the opportunity to interact with the staff. Consumers are more inclined to trust an employee that they can converse with face-to-face. Some consumers are cautious about products they see online as they know graphic artists can alter photos and make products appear differently.

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Consumers may make more purchases

Some stores create a shopping experience to attract customers. The experience can include offering appetizers and beverages to shoppers while they shop and providing recommendations. These added features increase the opportunity for upsells by keeping customers in the store for longer, increasing the average value of each order.

Costs of running a brick-and-mortar store

If you're considering opening a brick-and-mortar store, it's a good idea to review the associated costs. When budgeting your costs, it's a good idea to inflate the amounts. Having extra money can help prepare you for unexpected expenses or help you pay for the increasing prices of the products you need. Here's a list of some costs that you can consider including in your business budget:

  • Rent: Unless you own your location, rent is a monthly expense that a company typically pays. If you own the building of your store, be sure you budget for the expense of property tax.

  • Licensing and permit fees: Depending on the type of business you own, the local government may require specific licenses. These permits and licenses can include the certificate of occupancy and seller's permit. If your business serves food, there may be periodic inspections to ensure you're abiding by food preparation by-laws.

  • Store fixtures: Store fixtures include display racks, shelves, furniture and checkout counters. You can consider placing your lighting in a way that complements your products and allows your customers to see the items you have for sale.

  • Initial inventory: Before your grand opening, make sure you have a fully stocked inventory. Consider having at least four months of inventory to help you prepare for the store opening.

  • Equipment and technology: You require a website to interact with online customers and your in-store customers regardless of having a brick-and-mortar store. Computers and point-of-sale systems are also technological expenses to consider.

  • Business insurance: The type of insurance needed for a brick-and-mortar business differs from what you need for an online business. Brick-and-mortar businesses have insurance like worker's compensation and property insurance to consider.

  • Advertising: For a new business, you can consider advertising offline and online to increase awareness of your business and promote any deals or specials you're offering.

  • Cleaning and maintenance: Having a clean store gives your customers a good impression about the business, brand, and products you're selling. You may choose to hire professionals to come and clean the store or office for you, or you can have employees available to clean the space as needed.

  • Web hosting and online assets: Brick and mortar businesses need an online presence in addition to their physical location. A brick-and-mortar business typically involves roles that pertain to social media management, email marketing, web hosting, and other activities for promotion online.

  • Signage: In addition to having the store name on the building, you may need signs to show consumers where to go, the prices of products, or the location of products in the different aisles.

  • Decor: Consider the decor of the business location and how it can help create a positive impression for customers when they first walk into the store. Choose paint colours that match your branding, decorative shelving, and flooring that's safe, comfortable to walk on, and esthetically appealing.

  • Professional services: These services include hiring human resources professionals to complete your payroll, a lawyer to support you with contracts and other documentation, and an accountant to handle your taxes, including submitting your Harmonized Sales Tax (HST) reports and payments to the government.

E-commerce versus brick-and-mortar

Here's a list of differences between a brick-and-mortar store and one that engages in e-commerce for your review:

  • Location: Online businesses don't have a specific location, even though the business is actively operating. Consumers cannot make purchases in person, and the store delivers the goods. In a brick-and-mortar business, consumers can go to a physical location and purchase the products they want.

  • Marketing: Online stores typically advertise using paid search ads, social media, and email to market to their existing customers and attract new ones. While more brick-and-mortar businesses may be using online marketing strategies, some still can use traditional marketing methods like distributing flyers, television and radio ads, billboards and newspaper ads.

  • Human interaction: Online shopping cart abandonment rates are typically higher for businesses that engage in e-commerce. One of the reasons for this is that there are no employees available to answer customer questions immediately, address concerns, or urge the customer to proceed with the purchase. Brick-and-mortar stores have staff available to answer questions and address issues right away, helping to encourage customers who are unsure about the product to make the purchase.

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