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Brick and Mortar

Reviewed by Annapoorna | Updated on Sep 30, 2020

Catalogue

What is Meant by 'Brick and Mortar'?

The word 'brick and mortar' refers to a typical street-side store that sells its customers face-to-face goods and services in an office or store owned or rented by the company. The term is relevant and widely used in the United States of America. Nevertheless, the term can be used in India as well to several shops and establishments.

Instances of brick and mortar businesses include the nearby grocery store and the corner shop. Brick and mortar businesses have found it hard to compete with web-based e-commerce companies. These include Amazon Inc, and the reason is that the latter usually have lower operating costs and greater flexibility.

Brick and Mortar Explained

Most customers still prefer shopping in a physical store and scrolling online. Consumers can speak to staff in brick and mortar shops, and ask questions about the goods or services. Brick and mortar shops have the potential to provide a shopping experience.

The customers can try a product like a video game or a laptop at BestBuy or have lunch at Nordstrom’s cafe in the USA while shopping in the store.

Brick and mortar businesses often offer customers with immediate gratification when they make a purchase. Many customers are sceptical when using their electronic credit cards. They equate credibility with a brick and mortar business as a physical presence may promote a sense of confidence.

Nonetheless, drawbacks can exist for companies operating brick and mortar stores, including costs associated with building rent, transaction staff, and service expenses, such as power, heat, and water.

For their quarterly and annual stock exchange-regulated earnings reports, publicly-traded retailers usually report the same-store sales, or comparable-store sales, per-store basis. Such financial metrics provide a performance comparison over a given period for the existing retail chain stores.

Such estimates are used by brick and mortar companies. It includes restaurants, grocery stores, and general merchandise stores to measure their financial results and guide corporate decision-making in their stores.

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