BRICK AND CLICK STRATEGIES

Scope:

BRICK AND CLICKBricks and clicks is a business strategy or business model in E-COMMERCE by which a company attempts to integrate both online and physical presences. It is also known as Click-and-mortar or clicks-and-bricks.

Example: Electronic store.

E-COMMERCE: EARLIER TRANSACTION COST ECONOMIESEmphasizes the nature of costs that the firms incur in the process of conducting transactions with buyers and sellers.

Information gathering and search costs, Negotiation and settlement costs, and Monitoring costs to ensure that trading partners adhere to the terms of any agreements made.

E-COMMERCE: NOW Has various advantages over traditional ways of e-commerce.

These advantages include:

Access to wider marketslower inventory and building costs, flexibility in sourcing inputs, improved transaction automation and data mining capabilities, ability to bypass intermediaries, lower menu costs enabling more rapid response to market changes, ease of bundling complementary products, ease of offering 7X24 access, and no limitation on depth of information provided to potential customers.

BRICKS vs. CLICK!S

BRICKS V/S CLICKS:

BRICKS•NO USE OF TECHNOLOGY• STORE TIMINGS• HIGH COSTS INVOLVED• LIMITED LOCATIONS•CREATES EMPLOYMENT• ADVERTISING:•Commercials•Weekly Magazine Advertisements•Store Design/Locations•Billboards/Buses•Radio advertisements•Branding•EXAMPLE:

CLICKS• USE OF TECHNOLOGY• 24 HOUR ACCESS•MINIMUM COSTS INVOLVED•GLOBAL PRESENCE• ALMOST SELF - MANAGED• ADVERTISING:•Web banners•Emails•Website design•Sponsored online commercials•Google•EXAMPLE: GOOGLE

Swot of bricks

Strengths

-Display of Products-

-Attractiveness to luddites-

-Time to receive product,

significantly less-

-Able to sell complimentary

products-

-Push-

Weaknesses

-Higher Costs (Employee, Inventory,

Investment, Overhead Costs)-

- Store Timings-

-Limited Locations-

Opportunities

-Sell complimentary

products-

-Create better Brand loyalty-

-Rewards Programs-

Threats

-Better bargains found online-

-Impending customer lawsuits-

-Downturn in economy, not good

for luxury items-

-Increased competition-

Swot of clicks. Strengths

-Easy to access by many-

-Open 24 hours, everyday-

-Minimal Costs involved-

-No additional hassle for updating inventory and better handle over

inventory-

-Pull-

Weaknesses

-Customer wait time increases-

-Harder to maintain customer loyalty-

-Harder to sell complimentary

products-

-Older generation not accustomed-

Opportunities

-Wider selection of products-

-Trend towards internet sales-

-New generation starting to use web for

shopping-

Threats

-Manufacturers selling direct from

their websites-

-Competitor prices easier to find on

the web-

-Information Security Risks-

ADVANTAGES OF BRICK AND CLICK MODEL:Common Core Competences

Common customer base

Common supplier networks

Common distribution channels

Common Brand equity (marketing)

Common Trust (perceived stability)

Lower cost of capital

Improving Organizational learning

A MAJOR DRAWBACK: Avoiding channel conflicts:Understand later.

BENEFITS: INDUSTRY WISEKey benefits to automotive industry

Combined supplier base Connects automobile manufacturers, dealers and consumers

in a single marketplace Decreases lead time and production costs

Key benefits to electronics industry Provides access to thousands of components from hundreds of

electronic suppliers Provides ability to search by part number, product type or

manufacturer Increases competitive pricing

Key benefits to energy industry Provides real time pricing data on energy commodities Provides access to hundreds of energy commodities Allows regional energy providers to gain access to a worldwide market

Key benefits to food industry Reduced lead time preserves perishables Provides access to real time pricing data Online auction technology allows for alternative pricing

Benefits to chemical industry Access to millions of chemical products from thousands of suppliers Integrated supply chains provide faster, more reliable transactions

Benefits to construction industry Contracting and subcontracting are made simpler by online bidding Construction companies can find raw materials from suppliers worldwide

CASE: BRICK AND CLICK AT WALMART.

ABOUT WAL-MART

Type of Organization: Public Company

Foundation: Rogers, Arkansas, United States of America

Founder: Sam Walton.

Current Headquarters: Bentonville, Arkansas, USA

Sector/ Type of Industry: Retailing, Discount stores, Super

markets and neighborhood shops

Current Revenue: 405 Billion US Dollars

Total Employees: 2,100,000

The website:URL: www.walmart.com

Launched in January 2000.Walmart.com is passionate about combining the best of two great worlds — technology and world-class retailing — to give customers a wide assortment of their favorite products, Every Day Low Prices, guaranteed satisfaction, friendly service, convenient hours (24 hours, 7 days a week) and a great online shopping experience.

Walmarts e-tailing:At Walmart you can buy in store, buy online, as well as buy online and pick up in store. Some products are not available in all stores, and some are available not available online like Grocery, Health and Beauty, Pharmacy, and Pets.

The Pro's and Con's:IN-STORE V/S. ONLINE.

Pros: IN-STOREYou can touch and feel the

products offered at the store.

Clearance items can only be availed at the stores.

Atmosphere at the store is very different and the creativity at the

store can be experienced

Cons:STORE

You have to carry home the bulk products which are bought

Not accessible 24 hours

XXXXXX

Features of WALMART.COM: The site also offers Internet access. For $9.94 a month, you can buy unlimited dial-up service through Wal-Mart Connect, which is AOL service offered with the Wal-Mart brand

The giant discounter's true strength online is in its bricks 'n clicks integration, tying its Web site into its real world stores. EXAMPLE:You can chose replacement tires at Walmart.com and have them installed at a local Wal-Mart.

The site's pharmacy section lets you place an order to be picked up locally; you can also view your prescription history online and set up e-mail reminders for refills.

Similar for contact lenses also.

You can drop off photos to be developed at Wal-Mart and see the finished prints at Walmart.com, where you can e-mail them to friends or make them into gift cards.

If you buy an item at Walmart.com, you can return it at a local Wal-Mart.

If there's an item your local Wal-Mart is out of, it's likely that the site has it. Walmart.com stocks 500,000 books and 80,000 CDs, etc. and probably has worlds largest inventory.

Challenges faced by:WALMARTIn the 1999 holiday season, it had to warn consumers that it could not guarantee delivery of orders placed after December 14th - unusual for a retailer with such well developed infrastructure.

Walmart.com shut down for a month in the fall of 2000 to revamp the site.

The Walmart.com site could never be described as high tech as compared to its counterparts like AMAZON.

Strategies that WALMART used: to overcome the challenges Wal-Mart, seeking greater online expertise, spun Walmart.com off as a separate company, selling a minority stake to tech-savvy Accel Ventures in January 2000, moving the site's headquarters to Silicon Valley.

In 2001, Wal-Mart bought back Accel's minority stake, so Walmart.com is once again a wholly owned subsidiary of Wal-Mart. Lin explains that the buy back was due to Wal-Mart's desire to focus on integrating its online and offline sales channels.

For touch of trendiness. Walmart.com launched a Netflix-style DVD rental plan. Users order DVDs through the site and receive them in the mail, keeping them as long they want with no late fees.

Wal-Mart, the world’s largest retailer, successfully incorporates e-retailing in its supply chain through electronically enabled stock replenishment. The result is dramatic.

Wal-Mart, uses Retail Link, a software system that provides vendors with up-to-date access to point-of-sale price and volume information and highlights Wal-Mart’s inventory positions and forecast of future needs. As a result, Wal-Mart improves fill-rate and customer satisfaction.

CONCLUSION:In the pre-Internet era, single channel was all that companies needed to deliver products or services to their customers. Today, responding to changes in the marketplace, companies have incorporated the Internet as a means to attract customers that find it convenient to shop from their homes or other places.