Business-to-Consumer (B E-Commerce (2C) - Bricks-and-clicks

BRICKS-AND-CLICKS

By mid-2001 many considered the brick-and-click formula the leading model for success in online retailing. A study by McKinsey & Co. revealed that more than 75 percent of the best-performing e-tailers were online cousins of traditional retailers. Bricks-and-clicks had the benefit of existing brands, established marketing and distribution arrangements, and an installed information technology base. The study found that e-tailers that sold clothing and apparel did the best in terms of gaining revenue from customers, with an average 21 percent operating margin. In fact, it was the only e-tail category with an average positive operating margin. In other categories, such as electronics, books, and gifts, the average operating margin was negative, with only the leading players making money on every sale.

Bricks-and-clicks also had the ability to bring the Internet into their traditional stores. In-store kiosks with Web access allowed consumers to research potential purchases online, then find the merchandise they wanted in the store. Brick-and-click bookseller Barnes & Noble took steps in 2001 to more fully integrate its online bookselling with its stores. For example, the company allowed customers who purchased books online the convenience of being able to return them to a Barnes & Noble bookstore.