Brick-and-Mortar

Key takeaways

• “Brick-and-mortar” describes businesses with a physical storefront or office where customers interact and make purchases in person.
• Physical stores offer immediacy, hands-on product inspection, and face-to-face service—advantages that are hard to replicate online.
• High overhead (rent, staff, utilities) and competition from e-commerce are ongoing challenges; many retailers combine physical and online channels to compete.

What it is and why it matters

Brick-and-mortar businesses operate from physical locations—stores, branches, or offices—where customers can browse, try products, and receive services immediately. This model is especially valuable when customers need to inspect items, receive personalized services (haircuts, auto repair, veterinary care), or want instant access to purchases.

Physical presence also builds trust for some customers who are wary of online payments or prefer in-person support.

Sales metrics and market context

• Retail chains often report same-store (comparable-store) sales to measure performance of established locations.
• Governments publish retail and e-commerce sales data regularly, helping track shifts between in-person and online commerce.
• Global non-store retailing (direct and online sales) accounted for roughly $4.2 trillion in 2023, with continued growth projected.
• There are over one million retail establishments in the U.S. (about 1,078,177 as of Q4 2023).

Example: Costco

Costco demonstrates a successful brick-and-mortar strategy by combining membership-driven pricing with omnichannel options:
* Membership fees and in-store experience drive loyalty and value.
* Over 127 million members and high renewal rates (about 92.7% in the U.S. and Canada, FY2023).
* Integrates online shopping with in-store pickup, helping it compete with major e-commerce players.

Types of brick-and-mortar stores

• Convenience stores — rely on impulse purchases and local foot traffic.
• Grocery stores — customers prefer to inspect perishable goods and take them home immediately.
• Specialty stores — hardware, bookstores, and other niche retailers that benefit from hands-on assistance.
• Department stores — large-format retailers carrying many categories; more exposed to online competition.

Advantages

• Immediate fulfillment and instant gratification.
• Hands-on product inspection and tactile shopping experiences.
• Personalized services and face-to-face customer support.
• Localized marketing and community presence.

Disadvantages

• Higher fixed and operating costs (rent, utilities, payroll, insurance).
• Geographic limits on customer reach.
• Greater exposure to changing foot-traffic patterns and economic shifts.
• Vulnerability to e-commerce competitors with lower overhead.

How brick-and-mortar stores are adapting

Many physical retailers have adopted hybrid models to capture both in-store and online benefits:
* Click-and-collect (buy online, pick up in store).
* Online ordering with home delivery.
* In-store experiences and services that cannot be duplicated online (product demos, cafes, workshops).
* Some e-commerce-first companies are opening physical locations to improve discovery and customer service.

Despite adaptation, traditional retailers still face closures and restructurings; at the same time, successful omnichannel strategies have helped some chains remain competitive.

Common questions

What costs are associated with running a brick-and-mortar store?
* Typical expenses include rent, utilities, payroll, inventory, insurance, marketing, store fixtures, and maintenance. Initial setup costs cover design, signage, and technology.

Can brick-and-mortar compete with e-commerce?
* Yes. Physical stores can compete by offering engaging in-store experiences, immediate fulfillment, click-and-collect, easy returns for online purchases, and targeted local marketing.

What is brick-and-mortar banking?
* Brick-and-mortar banking refers to conducting financial transactions at a physical branch, as opposed to using online or mobile banking channels. Many banks are reducing branch footprints while expanding digital services.

Bottom line

Brick-and-mortar remains a relevant and often necessary model for many types of goods and services. While e-commerce has reshaped retail, physical stores continue to offer unique value—immediacy, trust, and experiential shopping—that, when combined with digital channels, can form a resilient omnichannel strategy.