Here’s what separates brick-and-mortar businesses from online ones, along with two examples to clarify those differences.
What Is a Brick-and-Mortar?
A brick-and-mortar is any physical storefront that sells goods and services directly to customers. Coffee shops, bank branches, grocery stores, and clothing outlets at the mall are all examples of brick-and-mortar stores. Brick-and-mortars are the antithesis to virtual companies, which conduct their business online and do not interact with customers face-to-face. Virtual company customers visit a website, place an order, pay online, then wait for a mail service to bring the product to their home.
How Does a Brick-and-Mortar Work?
While brick-and-mortar stores and online businesses are opposites, they often co-mingle in the real world. Some businesses are strictly one or the other, especially when it’s a new business just starting out, but many businesses eventually incorporate aspects of both. For example, an online business may grow to the point that they decide to open a brick-and-mortar location in a city. Conversely, a brick-and-mortar business may scale back its locations to focus on online sales. Online businesses save on some overhead costs, compared to brick-and-mortar stores, but there are advantages to having a physical location, too. Customers have an easier time trying out products, and it’s easier for a company to build a good customer service reputation.
Examples
To better understand what makes a brick-and-mortar store unique, let’s compare a well-known brick-and-mortar brand to an equally well-known online business. Perhaps the largest example of a traditional brick-and-mortar business is Walmart. This multinational retailer controls roughly 11,500 physical stores in 27 countries. These stores include Walmart and Sam’s Club stores. Customers can visit these stores to buy anything from groceries to electronics, clothing, and cleaning supplies. Combined, these stores employ roughly 2.2 million people, including 1.5 million in the U.S. While both of these companies are massive operations that bring in billions of dollars every quarter, anyone familiar with the brands knows they are different operations. Walmart has increased its online business, but it’s still best known as a store where people can go and buy things.
The Decline of Malls
While Walmart has the resources to adapt and branch beyond the brick-and-mortar store model, not all businesses have that flexibility. The convenience of online shopping has made it hard for businesses in certain industries to compete, and one example of how this has played out in society is the decreasing popularity of malls. The declining popularity of brick-and-mortar stores is exponentially growing. More than 10,000 retailers closed their doors in 2019, compared to 5,400 in 2018. In malls, this has a ripple effect—fewer stores means less foot traffic, which decreases sales for the stores that remain.
