Click-and-mortar: tThe evolution of retail in the digital age

The digital commerce landscape is constantly evolving. It’s anticipated that as a percentage of all retail sales in the UK, retail ecommerce sales might rise from prior years to 38.1% by 2025.  

Accelerated by the Covid-19 pandemic, brick-and-mortar retailers were hit with a reality check when physical stores started having to close. To stay afloat, they had to adapt. Adopting digital strategies became a way to survive.
  
The shift toward digitalization didn’t mean that physical stores ceased to exist. Business models like click-and-mortar and strategies like unified commerce solidified their spot in the retail vocabulary. This implied that the two – online and offline – can coexist.  

The term ‘click-and-mortar' was coined soon after retailers recognized the value of omnichannel strategy when achieving and exceeding their KPI targets.  

In this article, we’ll look at what click-and-mortar is, compare it to brick-and-mortar, and analyze whether it’s a viable business strategy or just a fad. 

What is click-and-mortar?

A click-and-mortar business model refers to a company that has both an online and an offline presence, typically a website and a physical store. The physical store can be either a permanent store or a temporary pop-up shop. 

The scenario is a win-win – consumers can benefit from the convenience and speed of online shopping, and touch the product shelved inside a physical store before finalizing a purchase.

Brick-and-mortar vs. click-and-mortar

This won’t come as a surprise – the term click-and-mortar (also known as clicks-and-bricks) originated from the term brick-and-mortar, a business operating from a physical building.

With the growth of online shopping over the last few years, the need for an online presence in addition to an offline one has been made obvious to retailers. As many as 2.64 billion people shop online, which explains why most of the historical brick-and-mortar businesses are now operating under the click-and-mortar business model.

Online-only brands have also entered the click-and-mortar space after acknowledging the value of omnichannel marketing. Enabling consumers to benefit from multiple channels, digitally native businesses have begun to establish a physical presence on the high street. This was done with the strategic goal to move to a click-and-mortar business model.

Following the so-called ‘lockdown effect’ generating a surging number of online shoppers, many expected this high split of online sales to continue on a similar trajectory post-2021. And while online spending as a split of all sales has remained high, the expected impact this would have on stores hasn’t been significant.

Instead of Internet shopping becoming a threat to the British high street, online retailers started thriving after establishing their own brick-and-mortar shops and leveraging both.

For example, London and Cambridge have the highest split of online spending, all while having vibrant high-street shops. This demonstrates that a click-and-mortar business strategy is a viable business strategy.

Examples of click-and-mortar

British fitness brand Gymshark was an online-only brand until 2022 when they opened their flagship store in London. In addition to enabling consumers to access the brand’s products in real life, the store hosts events and “community hangouts”. As seen on Gymshark’s website, the offline presence offers an experimental space that brings the brand’s community closer together.

The pure-play online beauty retailer LOOKFANTASTIC is also exploring the click-and-mortar business model by opening pop-up shops. In the spring of 2023, the company partnered with beauty brand Sol de Janeiro for a Sol de Gelato pop-up store in London. The idea was for consumers to explore the range of products, try exclusive ice cream flavours, and win prizes – all in a single location.

What are the advantages of click-and-mortar?

The rise in retailers like GymShark and LOOKFANTASTIC adapting a click-and-mortar strategy shows that companies are actively tapping into the business model’s potential. Here are its advantages: 

• You can benefit from the pros of each channel. An online store offers convenience, speed, and a large reach as consumers from different cities and countries shop online. Alternatively, a physical store offers consumers an opportunity to touch, smell, and try on products, which removes uncertainty during the buying process.  
• You’re able to meet consumers’ needs, wherever they are. A seamless experience across channels is an expectation. Consumers want to shop on the high street, on their desktops, on their phones, and on social media. This is where the Click-and-Mortar business model proves valuable.  
• For digitally native brands rolling out a physical presence, this business model can positively impact key pain points of an online business. With the biggest one being making returns, having offline stores means consumers can put back the items they don’t like rather than having to go through the often-dreaded returns process.

What are the disadvantages of click-and-mortar?

Naturally, there are also challenges that come with adopting a click-and-mortar business model: 

• Cost of implementation and ongoing operations. Whether you are a bricks-and-mortar retailer building a digital presence or an online business creating a physical presence, the initial cost to adapt is a key consideration.  
• Need for resources and expertise. As a bricks-and-mortar retailer, developing a click-and-mortar strategy will require digital expertise that doesn’t necessarily exist in-house. Similarly, the success of a physical store or a pop-up shop will depend on connecting the right puzzle pieces of the consumer journey together, which an online pure player may not have the appropriate tools or expertise to do.  

As click-and-mortar are coming to replace traditional brick-and-mortars, retailers have the opportunity to merge their physical and digital presences for a seamless customer experience.
 
Ingenuity Commerce offers retailers technological and fulfillment services alongside digital expertise to build and optimize their omnichannel strategies.

Download our 2023 Retail Outlook Report to discover the trends and opportunities shaping the industry or get in touch today if you’d like to understand more about how our commerce solution can support your brand goals.