Are Brick and Mortar Stores Dead?
To begin this blog, I will define what brick and mortar means, this is for clarity and to make sure everyone reading fully understands the topic and content. Therefore, brick and mortar is defined as “a traditional street-side business that offers products and services to its customers face-to-face in an office or store that the business owns or rents. The local grocery store and the corner bank are examples of brick-and-mortar companies.” (by investopedia.com). So, the content of this blog will be surrounding the physical storefront businesses and the current state of their market.
These types of stores (brick and mortar) have been the main way of shopping historically but with the development of the internet and thus the development of e-commerce it has meant that ‘shopping culture’ has changed. Nowadays you can order shoes, clothes, groceries, household goods online, basically, you can purchase everything you may need online and with massive firms in this market it has meant that they have vast fleets for delivery purposes. Delivery is now very efficient, quick and cheap which puts more pressure on and more problems for brick and mortar stores.
For and Against
Brick and mortar stores have been struggling for a few years now, with the development of convenient online (e-commerce) shopping. This has changed customer perceptions and demands, as they can shop and purchase products from the comfort of their home, with incredible ease. As shown by these stats from The Guardian “The number of shoppers heading to UK high streets, retail parks and shopping centres has fallen by 10% in the last seven years”. This shows how the market is changing and the number of people out shopping reducing and this comes as no surprise as everyone is aware of the issues with brick and mortar stores. Proven by the fact that even big brand names are struggling and the surprising demise of embedded high street brands, the prime example of this is Woolworths who closed their doors in 2015.
This leads to the perception by the general public that brick and mortar stores are dead and you can see why this is the outlook on physical stores. Further supplemented by there not being as many jobs in retail as previously available –this stat from The Independent says “85,000 jobs have been cut in this sector over the past year.” This shows that the high street is struggling because of the sheer amount of jobs lost in one year. This can be a slightly misleading stat however as companies maybe just trying to cut costs to improve profitability instead of their physical store struggling, but it is still a vast number in a calendar year.
However, these stores still provide a real benefit and recent articles are being released that are describing the benefits of these stores because “retailers that do not maintain a brick and mortar store alongside a transactional website typically experienced 50% lower online sales compared to those that do have a physical presence (Retailgazette). This means that businesses that have these physical stores may not receive as many in-store purchases and therefore appear to be doing worse, but they help their products stick in consumers’ brains and increase sales as a whole. Having purely an e-commerce store or just having (for example) your clothing line on a website such as ASOS may be beneficial due to the amount of traffic that is online – in the ASOS example there is a huge number of purchases that occur on this site – but this is a saturated and diluted marketplace. How are your products going to stick out with so much choice? Having a brick and mortar store where consumers have previously seen your brand or your products will help massively. So, brick and mortar stores could be slightly considered as contributing to advertising or brand awareness, they have more benefits than simply converting sales in-store.
Another factor that may come into effect and help brick and mortar stores is the UK government as they are “ considering implementing a bevvy of taxations on online deliveries and packaging and simultaneously reducing business rates for the high street retailers” (accountancyage.com) – this could help the physical high street stores by ‘levelling the playing field’. Some of the policies of taxing brick and mortar stores are out-dated and implemented before online shopping changed the retail market so their business rates need to reflect this as there is a sizeable divide between physical and e-commerce business rates.
To conclude there are positives and negatives for brick and mortar stores. I personally believe brick and mortar is not dead, but it is struggling. In the modern world with such efficient and quick delivery options and massive companies that are providing a one-stop-shop for a multitude of products such as Amazon and ASOS, it is tricky for brick and mortar stores to really thrive. But at the same time, I believe consumers will always want and like having physical stores to look at items and enjoy a day out shopping.
If you are going to have a brick and mortar store it clearly has its benefits and its negatives. That’s why you will need to plan sufficiently and constantly monitor your cash flow and where your sales are happening. The best way to have a brick and mortar store seems to have it paired with an e-commerce option, to convert those sales that didn’t occur in-store to be achieved online. It’s a tricky situation for these stores but I would say brick and mortar is definitely alive, it just lives on in a tougher environment for owners.