Brick and mortar business: concept, advantages and disadvantages

Concept of a brick and mortar business

A brick and mortar business is one that sells its goods or services to customers through a physical place of business, such as a shop, showroom, branch, office or factory outlet, which the customer visits in person. The term refers to the building itself: the business exists in a real location rather than only on a website or an app. A neighbourhood grocery store, a bank branch, a restaurant, a salon and a car showroom are all examples.

The DU syllabus for this paper names it as one of three business formats:

• Brick and mortar: only physical premises;
• Click (pure online): only a website or app, with no shop for customers to visit;
• Brick and click: both, as when a chain of electronics stores also sells through its own app and lets customers order online and collect from a store.

Its key features are face-to-face dealing, goods that can be seen and handled before purchase, sale and delivery at the same place and time, and a trading area limited to people who can reach the premises.

Advantages

1. Personal touch and trust. Customers meet the seller, ask questions and build a relationship: the warmth of face-to-face dealing that online business lacks. For costly or personal goods (jewellery, furniture, medicines) this trust matters.
2. Inspection before purchase. Goods can be touched, tried and compared, so there are fewer wrong purchases and fewer returns.
3. Immediate possession. The buyer takes the goods home at once; there is no waiting for delivery.
4. Better after-sales service. Complaints, repairs and exchanges can be handled at the counter.
5. Impulse and add-on buying. Display, demonstration and the shop's atmosphere encourage extra purchases.
6. No dependence on the internet or digital payments. It serves customers who are not comfortable online, which is still common in smaller towns and among older buyers.
7. Local identity and goodwill. The shop becomes known in its area and generates local employment.

Disadvantages

1. High fixed costs. Rent, interiors, electricity, security and staff have to be paid whether sales are high or low.
2. Limited reach. Customers come only from the area around the premises; expansion needs new outlets and new investment.
3. Limited hours. The business sells only while it is open, while an online store sells round the clock.
4. Inventory burden. Stock must be carried at each outlet, which locks up working capital and risks obsolescence.
5. Limited range. Shelf space restricts the variety that can be displayed.
6. Competition from online sellers. Customers often check prices online and then bargain or buy elsewhere.
7. Slower response to change. Moving, refitting or closing a physical store is costly and slow.

Conclusion

A brick and mortar format suits goods that customers wish to see and feel, services that need personal presence, and markets where online buying is still limited. Because its costs and reach are its main weaknesses, many such businesses now add an online channel and move towards the brick and click format.