The History of Brick-and-Mortar Stores
In the early days of online retailing, the phrase brick-and-mortar came to mean a retail store with a physical building, as opposed to one that conducts sales entirely online. Brick-and-mortar, of course, were traditional building materials. But the term has taken on a less positive connotation in the Internet age, usually meaning "old-fashioned."
Also called a storefront, brick-and-mortar stores include department stores like Macy's, grocery stores like Kroger, banks, and a variety of other retailers with a physical presence (often in more than one location). Most brick-and-mortar stores have both a physical and an online presence, as do a larger number of smaller independents.
Try It Before They Buy It Showroom
Many customers will browse a retailer's physical location to check out the merchandise, but make their purchase online, a practice known as, "showrooming." A lot of consumers still prefer trying on or being able to feel and touch an item before buying it and appreciate being able to have their purchase available immediately.
But delivery fees for online purchases and security concerns are among the factors that drive almost as many shoppers to check out a product online, then visit a brick-and-mortar store to make the sale. This poses challenges to retailers who rely on both online sales and physical store sales for the bottom line.
Several years ago, I was on a panel of experts at a retail convention. All of the other members of the panel predicted the doom of brick-and-mortar essentially saying that storefronts would be gone in five years or at least reduced to being pick-up sites for online purchases. I was the lone ranger who said stores will always have a place in our society.
In the fall of 2016, Forrester completed a survey of millennial shoppers and asked them their preference between online and brick-and-mortar. 62 percent said they still prefer to shop in a physical space versus online. Amazingly, the most technologically connected generation in history still wants to shop and buy in a store. That's the reality. We value relationships. We trust people, not online reviews. Shoppers have learned that what is posted online is not necessarily true. What was once considered fact because it was online is now considered to be questionable.
Holiday Shopping Season Still Dominates
The busiest period for brick-and-mortar stores is still the Christmas holiday shopping season. This period between Thanksgiving and the end of the calendar year has become ever more competitive, with brick-and-mortar retailers increasing hours and running near-constant promotions. In recent years, many large retailers have even opened stores on Thanksgiving Day and Christmas Day, which resulted in a fair amount of backlash from customers and employees.
But the picture has not been perfect for online retailers over the holidays in the last few years, either. Procrastinating shoppers who waited until the last minute to order holiday gifts online overwhelmed the package delivery companies that online retailers rely on, resulting in packages delivered late or after the holidays. So there are plenty of pros and cons for both brick-and-mortar and online stores when it comes to retail's busiest shopping period.
Brick-and-Mortar Stores Struggle
The challenges of opening a brick-and-mortar store in the internet age are similar to what they've always been: It's just more expensive to have a physical presence. Depending on location, rent for retail space can be a significant cost for a retailer, and even if sales are not strong, the rent still has to be paid every month. And depending on lease terms, retail store owners might not be able to adapt or update their storefronts to keep up with trends.
A good example of an industry that has struggled to maintain its brick-and-mortar presence is retail booksellers. With the rise of online book sales, particularly through Amazon, it's become more and more difficult for bookstores, especially independent ones, to keep their costs down and compete. Borders, a bookstore chain that at one time had more than 500 brick-and-mortar stores and was one of the largest booksellers in the world, filed for bankruptcy in 2011 and liquidated its stores before the end of that year.
But that's not the end of the story. Amazon is now opening brick-and-mortar stores. They have learned that a significant portion of the population will only buy in-store, so the dominant giant of online e-commerce is now a brick-and-mortar retailer, too.