Evaluating the use of e-commerce in a brick and click organisation

In order to evaluate the use of e-commerce in a brick and click organisation, we’ll use the example of the high street fashion retailer ‘Next’. Next is a british clothing, footwear and home wear retailer with over 500 physical stores in the UK. They also have a popular e-commerce website.

With so many stores in various locations across the UK, most of the population is just a short distance away from a Next store where they can view, touch and feel products for themselves. Customers can also buy products online and return them to their nearest store which offers peace of mind and convenience. If customers don’t want to pay delivery costs, they can also collect products purchased online in a store of their choice which is another useful service.

Having both physical stores (bricks) and the e-commerce website (clicks) offers customers great service, choice and peace of mind when buying products from Next.

Advantages of bricks and clicks

  1. Customers can buy products 24/7 from Next. When stores close, customers can still buy online.
  2. Customers can touch, feel and try on products in store and buy over the counter or online.
  3. Customers can return products bought online to a physical store to get a refund or exchange.
  4. Customers can check product stock online in various store locations.
  5. Customers can have products delivered to an address of their choice or collect products themselves in a store of their choice.

 Disadvantages of bricks and clicks

  1. Leasing commercial buildings for the stores is a huge, ongoing cost. Rates can also increase in popular areas and each rental agreement has to be negotiated individually.
  2. Staff costs are another huge expense. Having staff and management in 500+ stores is the largest ongoing costs Next will have. An online-only business would require a single office and a tiny fraction of the staff Next currently have.
  3. Limited market size – a psychical store is only going to attract a limited amount of people. In a small town for example there may not be enough foot fall to make a store viable. An online store can target people from all countries and regions.
  4. Shoplifting or staff theft is unfortunately a risk with physical stores. Most stores need security guards to help prevent shoplifting which is an additional expense.
  5. Point of sale hardware and security hardware (tags, cctv, detectors at the door) are also another cost that doesn’t come in to play if running an only-online business.