Bricks And Clicks
Bricks and clicks is a business model typically used by traditional retailers and integrates both offline an online presences. It is beneficial to those retailers who have supply chains and extensive logics. So, “Bricks and Clicks” model can help the user to order products directly from local store when he has been provided the facility by chain of stores to order the products online and get the delivery to their home.
Bricks and Clicks are also known as Clicks and Flips (catalogs) or click-and-mortar. Clicks and bricks have been very successful in recent time as now there is no need to start-up company to employ a successful pure dot.com strategy and thus the traditional online retailer can establish the online presence easily and thus, it is very popular in many sectors and the credibility of analysts have been destroyed who claimed that internet would render traditional retailers through removal of intermediaries. Bricks and Clicks are helpful in increasing returns on equity capital and the use of debt capital to supplement the equity capital i.e. leveraging. Thus, it will help in leveraging the core competency and successful firms have one or two core competencies and can do better by using competency intensively.
Moreover, brand equity is leveraged by not using the large sum of money for advertising. Also, bricks and clicks can be useful for problem-free delivery and assured supply by leveraging existing supplier networks and entail price discounts. Also, established firms have lower cost of capital or Weighted Average Cost Capital (WACC) and thus, it makes the availability of bond issues and lower cost of underwriting than dot com.
Other features include shorter break even times, easily purchasing and obtaining the economies of scale in production and in distribution and promotion and the interaction of e-commerce with existing channels.
Written by: Matt Mason
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Tagged as brand equity, bricks and clicks model, equity capital, traditional retailers, WACC, Weighted Average Cost of Capital + Categorized as Business, Economy articles, Ladership & Management, Online economy