Tuesday, August 23, 2011

Management Theories # 23 - Bricks and Clicks Model

Bricks-and-clicks is a business model by which a company integrates both offline (bricks) and online (clicks) presences. It is also known as click-and-mortar or clicks-and-bricks, as well as bricks, clicks and flips, flips referring to catalogs.

One example of the bricks-and-clicks model is when a chain of stores allows the user to order products online, but lets them pick up their order at a local store. Conversely, a furniture store may have displays at a local store from which a customer can order an item electronically for delivery to their home.

The bricks and clicks model has typically been used by traditional retailers who have extensive logistics and supply chains. Part of the reason for its success is that it is far easier for a traditional retailer to establish an online presence than it is for a start-up company to employ a successful pure "dot com" strategy, or for an online retailer to establish a traditional presence (including a strong brand).

The success of the model in many sectors has destroyed the credibility of analysts who argued that the Internet would render traditional retailers obsolete through disintermediation.

"On the other hand, an online-only service can remain a best-in-class operation because its executives focus on just the online business." It has been argued that a bricks-and-clicks business model is more difficult to implement than an online-only model.

In the future, the bricks-and-clicks may be more successful, but in 2010 some online-only businesses grew at a staggering 30%, while some bricks-and-clicks businesses grew at a paltry 3%.

The key factor for a bricks-and-clicks business model to be successful "will, to a large extent, be determined by a company’s ability to manage the trade-offs between separation and integration" of their retail and online businesses.

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