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Brick and Mortar Stores: Strategies for Physical Retail Success

10 Jan 2024

Ever wandered through a bustling shopping mall, strolled down city streets lined with stores, or stumbled upon a quaint shop in your neighbourhood? That's the realm of brick-and-mortar stores—where you can touch, feel, and experience the products before purchasing.

While the digital era has reshaped our shopping habits, brick-and-mortar stores aren't fading into the background. Surprisingly, in 2022, we witnessed a surge in new store openings, doubling the number of closures [1]—a testament to the enduring relevance of physical stores in our lives.

So, in this guide, we're giving you the 411 on all things brick-and-mortar. From the inner workings of these stores to the benefits and considerations, we're here to explore it all. Plus, we'll sprinkle in some tips on some of the most effective strategies for retail success. Let's get started.

What is a brick-and-mortar store?

A brick-and-mortar store in the US is a physical retail spot where businesses showcase and sell their goods directly to customers. These stores provide a hands-on shopping experience, allowing people to explore, touch, and examine items before deciding to buy. Unlike online shopping, brick-and-mortar stores offer immediate product access and personal interaction with sales representatives.

In the US, these retail stores come in various shapes and sizes. Grocery stores like Whole Foods offer fresh produce and everyday essentials, while CVS specialises in pharmaceuticals and household items. Department stores like Macy's provide a wide range of goods, including clothing, accessories, and home essentials, all under one roof.

The key characteristic of brick-and-mortar stores is their physical presence, enabling customers to engage with products firsthand. This direct interaction, along with the assistance from sales staff, influences purchasing decisions and creates a more immediate shopping experience compared to online alternatives.

How do brick-and-mortar stores work?

At its core, a brick-and-mortar business operates by welcoming customers who visit to explore and shop for products. An enticing storefront, often adorned with attractive visual displays, serves as a magnet, drawing in potential shoppers passing by, which makes location a vital part of brick-and-mortar retail.

Upon entering, customers engage firsthand with the items they're interested in, examining, touching, and sometimes even trying on products within the store's fitting rooms. Sales associates play a pivotal role in assisting customers throughout this process. They greet visitors, provide product information, check stock availability, and aim to guide customers to the checkout for their purchases.

Additionally, brick-and-mortar establishments act as focal points for multichannel retailers, offering various experiences beyond mere transactions. This can include hosting in-store events, facilitating local pickup services, and accommodating strategies like 'buy online, pick up in-store' (BOPIS) or 'buy online, return in-store' (BORIS). These added services aim to enhance the overall shopping experience and bridge the gap between the online and physical retail realms.

Advantages of brick-and-mortar stores

In an era dominated by online shopping, brick-and-mortar stores offer distinct advantages that resonate with a diverse customer base. These physical retail establishments, whether department stores, specialty stores, convenience stores, or grocery stores, cater to the growing needs of consumers who seek more than just virtual experiences.

Here's a rundown of why these physical locations continue to hold relevance and provide a unique edge:

  • Tangible customer interaction: Unlike online stores, brick-and-mortar establishments facilitate direct face-to-face interactions. Customers can physically engage with products, seek assistance from retail sales representatives, and experience the merchandise firsthand. This tangible engagement often leads to more confident purchasing decisions and fosters customer loyalty.
  • Enhanced customer experiences: Physical stores offer an in-store experience that cannot be replicated online. The opportunity for immersive retail environments, personalised assistance, and on-the-spot solutions enhances the overall shopping experience, catering to different consumer preferences and needs.
  • Bridging offline and online channels: The integration of physical and digital realms, often termed "click and mortar" or physical retail, caters to the convenience-seeking modern consumer. This hybrid model allows customers to order online and pick up their purchases in-store, leveraging the advantages of both online and offline shopping.
  • Immediate gratification and convenience: A brick-and-mortar store excels in providing instant gratification. Customers can purchase and take home products immediately, eliminating wait times for shipping. Additionally, physical locations strategically placed in high-traffic areas capitalise on spontaneous foot traffic, attracting customers who prefer immediate access to goods.
  • Targeting diverse demographics: Having a physical storefront gives you a unique advantage in reaching diverse customer demographics. While online shopping caters to a vast market, physical stores excel in serving specific segments—such as older customers or those seeking personalised assistance—who might prefer in-person shopping experiences.
  • Establishing trust and credibility: Having a physical presence through brick-and-mortar locations bolsters the credibility of a business. It instils trust among consumers who appreciate the reliability and stability of businesses with physical storefronts.

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Limitations of brick-and-mortar businesses

While brick-and-mortar stores offer unique advantages, they also contend with several limitations inherent to their business model. These challenges, ranging from operational costs to evolving competition, present hurdles that traditional retailers must navigate in the dynamic retail landscape:

  • High operating costs: Maintaining a physical retail space involves significant expenses, including rent, utilities, staff wages, and maintenance. These overhead costs can significantly impact profit margins, especially for small or independent retailers.
  • Inventory management challenges: Balancing inventory levels in brick-and-mortar stores can be complex. Overstocking leads to excess inventory and potential losses while understocking risks customer dissatisfaction due to product unavailability.
  • Evolving competition from online retail: With the surge in online shopping, brick-and-mortar stores face intensified competition from ecommerce counterparts. Online businesses often operate with lower overhead costs and can offer competitive pricing, challenging the pricing models of a physical store.
  • Changing consumer behaviour: Shifts in consumer behaviour and preferences present a challenge for brick-and-mortar retailers. The increasing inclination toward online shopping, coupled with a demand for convenience and speed, requires physical stores to adapt their strategies to retain and attract customers.

Brick-and-mortar vs. ecommerce: contrasting retail realms

Here are the fundamental disparities between brick-and-mortar and ecommerce:

  • Physical interaction: Brick-and-mortar stores distinguish themselves by enabling customers to physically interact with products before making a purchase—an experience unavailable in online shopping.
  • Overhead costs: Brick-and-mortar stores near higher overhead expenses such as rent, utilities, and maintenance. In contrast, online shops have lower traditional overhead costs, but they incur expenses in website upkeep and advanced warehouse technology.
  • Reach: The scope of brick-and-mortar stores is primarily localised, catering to nearby customers, whereas the global reach of online retailers transcends geographical boundaries.
  • Delivery dynamics: In brick-and-mortar stores, customers acquire their purchased products immediately. Conversely, ecommerce entails a waiting period for product delivery, varying based on shipping logistics and location.
  • Returns and exchanges: Local brick-and-mortar retail businesses often offer a simpler process for returns and exchanges, given the immediate physical presence. In contrast, ecommerce returns and exchanges may involve the hassle of shipping and longer waiting periods for processing.

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Strategies for elevating physical retail success

In a landscape where consumer preferences continually evolve, achieving success in brick-and-mortar retail demands strategic innovation and adaptability. Here are ten proven strategies that can propel physical retail establishments to thrive in today's competitive market.

  • Multichannel integration: Bringing together the best of both worlds - physical and online retail - through seamless integration is a powerful strategy. Offering click-and-collect services, synchronised inventory and a cohesive experience across all channels bridges the gap between offline and online shopping, appealing to a broader customer base.
  • Personalised customer experience: Investing in a personalised customer journey through personalised service cultivates stronger connections and better loyalty. Train staff to offer tailored recommendations, engage authentically with shoppers, and create memorable experiences that drive customer loyalty.
  • Innovative store layouts: Experiment with innovative store layouts and retail branding to optimise traffic flow and captivate customer interest. Utilise interactive displays, dynamic arrangements, and engaging zones to encourage exploration and increase time spent in-store.
  • Data-driven insights: Leverage data analytics to gain deeper insights into customer behaviour. Understanding preferences, shopping patterns, and trends allows for more informed decisions in product offerings and marketing strategies and enhances the overall shopping experience.
  • Strategic visual merchandising: Craft visually appealing displays that effectively showcase products. Regularly update and refine these displays to maintain freshness and captivate customers' attention.
  • Embrace retail POS systems: Introducing a Retail POS system streamlines transactions, inventory management, payment processing, and customer interactions. It enables efficient checkouts and inventory tracking and often integrates with other systems for a comprehensive retail management solution.
  • Community engagement: Foster connections within the local community by organising events, collaborations, or supporting local causes. Building relationships beyond transactions helps establish a loyal customer base.
  • Focus on convenience: Prioritise convenience by offering hassle-free returns, quick and efficient checkout experiences, and the option for customers to pick up online orders in-store (BOPIS).
  • Continuous adaptation and innovation: Stay agile and open to change by regularly updating product offerings, experimenting with new services, and embracing emerging trends to meet evolving consumer demands.
  • Exceptional customer service: Invest in training and empowering staff to deliver exceptional customer service. Knowledgeable, attentive, and proactive employees enhance the overall shopping experience, leaving a lasting positive impression on customers.

Checking out success:

Voilà! Those are the secrets to rocking it in the world of physical retail. These strategies may just be the ticket to turning your store into the talk of the town. From multichannel magic to personalised experiences and even embracing the wonders of tech like a retail POS system, the retail game's in your hands. Keep innovating, keep adapting, and keep that customer smile going. You've got this!

Liked this blog? Check out our guide on retail stores profit margin to learn more about retail outlets and businesses!

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