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Bricks and clicks

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This delivery truck illustrates how some traditional supermarkets are now pursuing a bricks and clicks strategy.

Bricks and clicks (aka clicks and bricks, click and mortar, or bricks, clicks and flips) is a business model by which a company integrates both offline (bricks) and online (clicks) presences, sometimes with the third extra flips (physical catalogs). Additionally, many will also offer telephone ordering as well, or at least provide telephone sales support.

A popular example of the bricks and clicks model is when a chain of stores allows the customer to order products either online or physically in one of their stores, also allowing them to either pick-up their order directly at a local branch of the store or get it delivered to their home. There are many alternative combinations of this model.

The bricks and clicks model has typically been used by traditional retailers who have extensive logistics and supply chains, but are well known and often respected for their traditional physical presence. 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 purely online one, or for an online only retailer to establish a traditional presence, including a strong and well recognised brand, without having a large marketing budget. Although the major factor in the success or failure of this business model is in the control of costs, as usually maintaining a physical presence —paying for many physical store premises and their staffing— requires larger capital expenditure which online only businesses do not usually have. Some business sectors may lend themselves better to a bricks and clicks model than others. For example, supermarkets often have different customers types requiring alternative shopping options; one group may wish to see the goods directly before purchase and like the convenience of quickly shopping on-the-fly, while another group may require a different convenience of shopping online and getting the order delivered when it suits them. Conversely, a business selling more luxurious, often expensive, or only occasionally purchased products —like cars— may find sales are more common with a physical presence, due to the more considered nature of the purchasing decision, though they may still offer online product information.

The success of the model in many sectors has lessened the credibility of some 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.[1] In the future, the bricks and clicks model 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%.[2] 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.[3]

Contents

[edit] Applying ones Bricks and clicks Business Model approach to align the business

A step-by-step roadmap that describes the synergy and context between business modelling and other business initiatives.

Business Modelling is an important tool to both capture, design, innovate and transform the business.[4] However a business model should not be seen separately, but in connection with[5]:

  • The main business goals of the organization, e.g. strategic business objectives, critical success factors and key performance indicators, which a holistic business model approach should include.
  • The main business Issues/pain points and thereby organizational weakness, which a holistic business model approach should include for they represent the threat to the company’s business model.
  • A clear cause and effect linkages between the competencies, desired outcomes and measurements. Thereby the business model can help with possible strategic decisions.
  • An emphasis on business model management and thereby a continuous improvement and governance approach to the business model.
  • The business maturity level, in order to develop the organization representation of core differentiated and core competitive competencies [only linked to value proposition], which is a basis for building a business model as they represent some of the most important sources of uniqueness. These are the things that a company can do uniquely well, and that no-one else can copy quickly enough to affect competition.
  • Linkages among competences and competency development.
  • The possible value creation and realization of the organization.
  • The information flow and thereby information need, for effective and efficient decision making.

Such a holistic approach would help clarify both intent and sources of synergy and disconnect between business model, strategy, scorecards, information, innovation, processes and IT systems. This includes architectural alignment as well as business transformation and value and performance views. Such dialogues allow Executives to use the business model with their business alignment.

[edit] See also

[edit] Notes

  1. Stross, Randall (18 September 2010). "Netflix Is Beating Blockbuster With Clicks, Not Bricks". The New York Times. http://www.nytimes.com/2010/09/19/business/19digi.html. 
  2. http://www.rfidjournal.com/article/view/8154/1
  3. Gulati, Ranjay; Jason Garino (May–June 2000). "Get the Right Mix of Bricks and Clicks". Harvard Business Review: 107–114. 
  4. Amar Bhidé, The Origin and Evolution of New Businesses, Oxford University Press.
  5. Applying Real-World BPM in an SAP Environment, von Rosing & Rosenberg, Business Models, Applying Real-World BPM in an SAP Environment, SAP Press 2011

[edit] Further reading