Brick-and-mortar stores can be found in shopping malls, town centers, city streets, or the outskirts of small communities. They sell something—like clothing or groceries—for customers to visit, view, and purchase.
Despite the shift toward online shopping, brick-and-mortar retail stores continue to grow. In 2022, US retailers opened twice as many stores as they closed.
If you’re curious about brick-and-mortar retail, you’re in the right place. This guide walks through how the brick-and-mortar business model works, examples of successful retailers with their own shops, and how to open a brick-and-mortar store of your own.
Table of Contents
What is a brick-and-mortar store?
A brick-and-mortar store is a retail location where business owners showcase their products using a physical storefront. Customers then visit the store to browse items, talk with sales representatives, try on or test products, and purchase goods.
Popular brick-and-mortar stores include grocery stores (like Whole Foods), specialty stores (like CVS), and department stores (like Macy’s).
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How do brick-and-mortar stores work?
Brick-and-mortar stores sell products to customers who stop by and shop. An attractive storefront (maybe with visual merchandising displays) draws in passersby. Here’s what that can look like:
Once customers enter the store, they view, touch, and interact with products they’re considering buying. There may be an option to try on the item in the store’s fitting room.
Sales assistants are often on hand to guide customers through that process. They’re able to greet customers, answer questions, and check the availability of stock. The end goal is to bring a customer to the checkout desk to complete their purchase.
Brick-and-mortar stores can also act as hubs for omnichannel retailers who offer experiences such as in-store events, local pickup, buy online, pick up in-store (BOPIS), or buy online, return in-store (BORIS).
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Advantages and disadvantages of brick-and-mortar
What are the strengths of opening a brick-and-mortar store? The weaknesses? Let’s look at both.
Reach customers who don’t shop online
Not everyone uses the internet. Sure, it has a global penetration rate of 92%, but there are still potential customers you could alienate by going ecommerce only.
The rise of ecommerce hasn’t outdated brick-and-mortar; it’s highlighted how important both experiences are for customers. Having a brick-and-mortar store to complement your ecommerce strategy targets both online and offline shoppers.
“Retail offers us a market that we wouldn’t access online,” says Esther Babayov, marketing director of The Suit Depot. “There are just certain demographics that prefer to shop in person—such as older customers, customers who are unsure of their size, customers who are looking for something super specific, etc.—and if we were only online we would be missing out on all of those opportunities to serve those customers.”
One way to combine online and in-person shopping is “click and mortar” or phygital retail. In this case, people order the item through an online retailer and head to their physical store to collect the item.
Earl of East is one retailer that used click and mortar to keep its physical store open during the pandemic. Customers downloaded a mobile app to order their food and drinks, and the store was open during the day for collection.
Deliver better customer experiences
Did you know that millennials value experiences more than material items? It’s one reason why brick-and-mortar stores still thrive—they offer both.
Casper is one retailer that combines customer experiences with its brick-and-mortar stores. It launched The Dreamery back in 2018. Busy New Yorkers could visit the store and pay $25 for a quick nap in a Casper bed.
While you don’t have to go to this extent, you can provide in-store shoppers with the personalized experiences that ecommerce stores can’t deliver, such as immersive retail or content creation studios.
“We opened our first brick-and-mortar store last year,” says Candice Small, founder of Candid Owl. “Whilst successfully selling our product online, we were increasingly receiving requests from our customers to open a showroom/retail unit to enable them to visit and experience our products in person. Our customers can now touch, feel, and experience our fabrics in person to select their bespoke lampshades with confidence that they will suit their home décor.”
Running a brick-and-mortar store can be a fun and profitable venture, but it does have a few challenges:
- Inventory management: Retailers face the difficult task of predicting consumer demand accurately, as overstocking can lead to waste and increased costs, while understocking risks lost sales.
- High operating costs: Retail stores come with substantial costs such as rent, utilities, maintenance, and employee salaries, which can be burdensome, especially for smaller businesses.
- Competition: The retail industry is highly competitive, with other physical and online stores selling similar products, often at lower prices due to their larger scale and lower overhead.
Brick-and-mortar vs. ecommerce
Brick-and-mortar stores have been around for centuries. They let customers interact with products and staff firsthand, offering instant gratification by taking home products right away.
Ecommerce refers to the buying and selling of products online. It’s become popular because customers can shop anywhere, anytime, from the comfort of home.
Here are some of the differences between brick-and-mortar and ecommerce:
- Physical interaction: Brick-and-mortar stores allow customers to interact with the product physically before buying. In contrast, online businesses don’t offer this experience.
- Overhead costs: Brick-and-mortar stores have higher overhead costs like rent, utilities, and maintenance. Online shops have lower overhead costs but can have significant costs in website maintenance and warehouse technology.
- Reach: Brick-and-mortar stores have limited reach, mostly to local customers, whereas online retailers can reach a global market.
- Delivery: In a brick-and-mortar store, customers receive the product immediately after purchase. In ecommerce, there is a waiting period for the product to get delivered.
- Returns and exchanges: Returns and exchanges can often be more straightforward at a local business, while it might require shipping and more waiting time for ecommerce businesses.
Types of brick-and-mortar stores
- Department stores
- Specialty stores
- Grocery stores
- Convenience stores
Let’s take a closer look at these different types of brick-and-mortar stores.
Saks, Sephora, and Nordstrom are all examples of brick-and-mortar department stores. The value of in-store sales inside US department stores has been relatively stable over the past three years, bringing in $11.4 billion in April 2023, equal to the amount brought in in April 2019.
Brick-and-mortar businesses like Home Depot, CVS, and Petco all specialize in one product—be that home improvement items, cosmetics, or pet food. In most cases, shoppers visit specialty stores with an item already in mind.
Grocery stores are another example of brick-and-mortar retail. Brands like Walmart, Trader Joe’s, and Costco have bases in most states.
Data shows that 50% of US consumers spent more on groceries than they did the previous year as of March 2022. Person. Grocery stores are the primary in-store shopping location for almost half of all customers—hence why brick-and-mortar grocery stores generated $8.12 trillion in 2022 in the US alone.
Convenience stores are small retail businesses that are typically open long hours and found in easily accessible locations. They carry a range of everyday items like groceries, snack foods, confectionery, toiletries, soft drinks, tobacco products, and newspapers, often at slightly higher prices due to their convenience.
As of December 2022, there were 148,026 convenience stores in the US. Those stores—including 7-Eleven and Casey’s—made $906 billion 2022.
Examples of brick-and-mortar stores
To fully understand how a brick-and-mortar store functions and operates, let’s look at some real-world examples. Here are a few successful brick-and-mortar businesses.
Wildling is a German shoe retailer that opened its first brick-and-mortar showroom last year. It uses Shopify POS, which fully integrates with its ecommerce platform, to show real-time stock availability, manage inventory, and track orders.
Since using this setup for its first brick-and-mortar location, Wildling saw 50% more first-time shoppers in its physical showrooms.
Beauty Heroes was a successful ecommerce retailer that wanted to open its first brick-and-mortar store. It combined the two channels—online and offline—using one single point-of-sale (POS) system.
The launch of its first brick-and-mortar store was a success. The Beauty Heroes team saved hours reconciling customer information across both channels—valuable data it can use to retarget and analyze.
An increasing number of direct-to-consumer (DTC) brands are partnering with brick-and-mortar retailers to get their consumer packaged goods in front of foot traffic.
Neighborhood Goods is one example of this in action. Its Austin brick-and-mortar store currently stocks a range of CPG brands, including BeHave, Just Water, and Chop Chop. It has plans for expansion into further locations later this year.
Yardbird, an outdoor furniture company, is a great example of a brick-and-mortar business due to its success in enhancing customer experiences through a combination of online and physical retail presence.
The company sells its seating sets, dining sets, and accessories both online and in 25 showrooms across the United States. It provides a unique, engaging experience for customers as they can browse online and then visit a showroom to test the products before purchasing.
The customer-centric strategy includes a “white glove” service in showrooms. The company encourages customers to see, touch, and sit in the furniture, which gives them a tangible experience of the products.
However, Yardbird faced issues with its point-of-sale (POS) system as its old hardware wasn’t suitable for its mobile-selling strategy, causing disruptions in customer interactions and inefficiencies for the staff.
Yardbird resolved this issue by implementing POS Go, Shopify’s handheld terminal, which allowed staff to access product information, accept payments anywhere in the store, and check stock availability, all using a single device.
Peak Design, born out of Peter Dering’s idea to make camera-carrying easier, now operates both online and in physical stores in New York, San Francisco, and Japan. However, a stationary point-of-sale (POS) system initially created bottlenecks and limited staff mobility in stores.
To enhance the in-store experience, Peak Design integrated Shopify’s handheld POS Go device, allowing staff to assist customers and process transactions anywhere within the store. This technological upgrade has not only streamlined the checkout process but also improved customer service, setting Peak Design as a successful example of a brick-and-mortar store.
Luxury retailer Burberry opened its first brick-and-mortar store in Shenzhen, China in 2020. But unlike most retailers, it didn’t open the store with the vision of selling more merchandise. Instead, it prioritized delivering immersive retail experiences for its customers.
Its WeChat mini-program incentivizes customers to share their experiences on social media in return for social currency that can be redeemed for exclusive content. This gives the brick-and-mortar store an online presence, too.
Burberry’s social retail store in Shenzhen is a place of discovery that connects and rewards customers as they explore online and in-store. It marks a shift in how we engage with our customers, and we can’t wait to share this innovative experience with the world.
How to open your first brick-and-mortar store
Let’s walk through seven steps you can take to open your first brick-and -mortar store.
1. Find the right location
It’s tempting to put an offer in to rent a storefront in a busy shopping district. More passersby means more retail sales, right? Not necessarily.
There are various factors you need to consider when choosing the right space for your store, including but not limited to:
- Where your customers are
- Ease of access
📚 FURTHER READING: Dig into our ultimate guide on how to choose the perfect location for your brick-and-mortar store.
Footwear retailer Rothy’s has five brick-and-mortar stores across the US. CEO Stephen Hawthornthwaite explains how those locations are located in cities that have a healthy blend of both existing and potential new customers.
“From there, we look for a neighborhood that’s full of character, walkable, and offers a mix of retail, restaurants, and cultural activities,” he says. “We launched Rothy’s in 2016 with comfortable shoes that didn’t fall short on style, and walking will always hold a special place in our hearts.
“Lastly, Rothy’s community is at the heart of what we do, and we prefer to open stores in neighborhoods that have a strong, established community presence that draws people to the area and encourages them to stay a while.”
2. Choose a point-of-sale (POS) system
The next step in opening a brick-and-mortar store is to choose a POS system. This is the machine that will allow you to take payments from in-store shoppers. Platforms like Shopify POS accept most payment methods—including those made by mobile apps and credit cards.
The best part? If you’re opening the store to coexist with your ecommerce store, Shopify POS works seamlessly across the two. The in-store technology keeps you updated with stock levels, helping to manage inventory across various sales channels. You’ll also be able to offer click-and-mortar services (like buy online, pickup in-store).
3. Hire and train retail associates
Retail associates are the face of your store and are likely the first retail position you’ll hire. Associates make the first point of contact with any in-store shoppers who need assistance, and they help drive sales and manage foot traffic to your brick-and-mortar store.
When you find your first retail associate, their day-to-day tasks may include:
- Greeting customers and assisting them with their purchase
- Processing payments using your POS system
- Handling in-store returns and exchanges
- Creating visual merchandising displays to attract passersby
- Promoting brand loyalty programs
4. Manage inventory
Inventory management is the process of recording which items you have available for sale.
Retail inventory is notoriously inaccurate. Retailers often get stumped, selling out-of-stock items if they’re not managing inventory that’s being sold through various channels.
Managing inventory can be difficult. It’s a balancing act between having too little stock (and therefore having nothing to sell) and having too much stock (that either spoils, goes out of style, or takes up too much space in your store).
Keep track of in-store inventory by combining it with your ecommerce stock. Shopify, for example, shows stock levels of each item as soon as it’s sold either online or in-store.
5. Experiment with pop-up shops
Pop-up shops are a superb way to experiment with brick-and-mortar. Instead of committing to a year-long lease, other retailers with their own storefront lend it to newer companies.
DTC brand Gymshark experimented with its own pop-up store in London. In a bid to increase product sales and deliver excellent experiences, Gymshark offered free fitness classes to anyone who visited the location.
Birchbox also opened its first pop-up shop to experiment with brick-and-mortar. It hosted pop-ups in various locations across the US and set up a permanent shop in its most popular location: New York.
6. Merge in-store shopping with ecommerce
We’ve briefly touched on the fact that you can use your physical presence to power online sales. Omnichannel retail—which combines the two shopping channels—is becoming the norm, not the exception.
The simplest way to do this is by collecting your customers’ email addresses when they shop in-store. You can use this information for future retargeting, either pushing them back to their local store or to purchase online.
Think about encouraging in-store shoppers to share their purchases with friends, too. Recommendations from friends and family are the most credible forms of advertising. Get people talking about your store by rewarding them for doing so.
Get a POS system for your brick-and-mortar store
It’s clear that brick-and-mortar shopping experiences aren’t going away. According to Shopify president Harley Finkelstein: “Retail will never die, because it’s always going to change and evolve based on what consumers need. The key is to be resilient.”
If you’re considering exploring brick-and-mortar for your own retail business, follow the steps above to start today.
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