A company’s e-business model is merely its strategy for becoming a profitable business on the Internet. Aspects of electronic business are defined by many buzzwords, and there are subgroups as well, such as content providers, auction sites, and business-to-consumer retailers.
What type of e-business model is most reflective of apple given the market crash of dot-com stock.
Click and Mortar
What are Click and Mortar?
Businesses that have both online and offline operations, such as a website and a store, are known as click and mortar. Customers can perform online transactions quickly and receive traditional face-to-face service from a click-and-mortar company, making it potentially more competitive than a traditional “bricks-and-mortar” business that’s only available offline. Business models of this type are also known as clicks and bricks.
Both online and physical stores make up the so-called Click and Mortar business model.
Understanding Click and Mortar
The Internet is used by more than 60% of shoppers to research, compare, and purchase1 during the entire shopping process. Recognizing this opportunity, major retailers developed online channels to complement their physical store channels. Most stores have their websites through which customers can shop, make purchases online, and have them delivered to their home or pick them up in-store.
Shoppers can connect with retailers using customer data and Wi-Fi in the store to receive special offers and guide them toward items of interest while they shop. For high-end merchandise, including designer clothing, jewelry, and flat-screen televisions, people often shop at the store to touch and feel the products before going home and placing their orders.
Having customers browse during their stay in the store is beneficial to brick-and-mortar retailers. Additionally, they have physical drop locations where customers who don’t want to wait for shipped products can drop off their orders. By shipping to stores, shipping costs are reduced and foot traffic at physical stores increases.
Example of Click and Mortar
An increasing number of big-brand retailers are adopting the click-and-mortar business model, including Walmart (WMT), Best Buy (BBY), and Nordstrom (JWN). An Omni channel strategy combines online and offline channels to offer shoppers, in addition to more choices, flexibility, convenience, and services, an enhanced shopping experience.
Customer relations are improved and more transactions are generated for retailers. In part, because the retailers spend millions of dollars on search engine click ads, their promotions show up higher in the search results for products.
In addition to increasing traffic on their websites, online-only retailers are reducing digital marketing expenses by establishing physical storefronts.
Customers can try on clothes or shoes in storefronts before purchasing online. Stores serve as showrooms for their products. Web kiosks are often available in stores so that shoppers can place online orders straight from the store. Customers who don’t feel comfortable shopping online only for certain types of products have embraced this practice. Having physical storefronts makes it easier for companies to establish brand recognition and build relationships with customers.
What Is a Pure Play?
One definition of a pure-play company specializes in only one type of service or product. Investors often prefer pure plays since they offer maximum exposure to a specific market segment and are easier to analyze.
As opposed to multi-divisional corporations or conglomerates that often offer a wide range of products and services across several industries, a pure-play company only concentrates on one area.
Bank of America (BAC) shares might be preferred by an investor who wants exposure to U.S. banking stocks, for example, rather than Berkshire Hathaway (BRK.B), since the latter is involved in banking and many other business sectors.
When investing in a pure-play company, one is looking for one that focuses on a particular industry or niche.
Pure plays are attractive to some investors due to their ease of analysis and the exposure to specific sectors they provide.
As companies today are involved in multiple product lines and markets, it can be difficult to identify pure plays.
Understanding Pure Plays
A certain type of active investor likes pure-play companies because they want to bet on specific products or segments within certain industries. These investors are forced to take unnecessary risks in industries they don’t want to invest in when they buy a company with diversified business lines.
Analysts can gain more accurate data for comparative company analyses or peer analyses by investing in pure plays. The reports are a valuable source of information for investment analysis and valuations based on similar companies.
To determine a relative valuation, a group of metrics are used, which include price-to-book ratios, price-to-earnings ratios, price-to-sales ratios, and price-to-cash-flow ratios. The investment analyst can use each of these values to determine whether a company is overvalued or undervalued and to calculate the relative value of the company. It is easier for these analyses to compare pure-play companies since they are much more directly comparable. As a result, conglomerates are not easily comparable, since their results are a reflection of multiple industries.
Realistically, pure-play is never used as a precise description, because corporations today almost always have a certain level of cross-industry exposure. In particular, large publicly traded companies have a high level of cross-industry exposure.
What Is Brick-and-Mortar?
Traditional brick-and-mortar businesses are street-side businesses that offer products and services in an office or store that is owned or leased by the business. A brick-and-mortar business is something like your local grocery store or corner bank. Brick-and-mortar businesses have had trouble competing with most web-based companies, like Amazon.com Inc. (AMZN), since they usually operate at a lower cost and have greater flexibility.
Businesses with brick-and-mortar locations typically have physical stores where customers can browse and buy in person.
The digital economy has made this type of traditional store more difficult since online retailers such as eBay or Amazon have lower overhead costs and more flexibility for the customer.
In order to compete better with online-only firms, many brick-and-mortar firms now have simultaneous, integrated web-based businesses.
Additionally, brick-and-mortar retail has impacted some web-only businesses that have opened physical locations in order to leverage the advantages of traditional retail.
Shoppers still prefer to browse and shop in physical stores. A brick-and-mortar store allows consumers to communicate with an employee and get information about its products and services. Brick-and-mortar stores can offer experience shopping, such as the opportunity to test out video games or laptops at Best Buy or have lunch at Nordstrom’s cafe while shopping. The benefits of brick-and-mortar businesses extend to instant gratification for consumers when they make a purchase.
Credit cards and other online payment methods are sometimes viewed with suspicion by some consumers. Brick-and-mortar businesses are often associated with legitimacy since a physical presence can enhance the perception of trust. There are, however, disadvantages for companies that run brick-and-mortar stores, including the costs associated with renting the building, hiring people to conduct transactions, and having to pay for utilities such as electricity, heat, and water.
Many have speculated about how the brick-and-mortar business will survive in the future due to the rise of e-commerce and online businesses. Businesses with brick-and-mortar locations are increasingly adding an online presence in order to take advantage of both models.
For example, Safeway customers can shop online for groceries and have them delivered within hours to their door at some brick-and-mortar grocery stores. With the growing prevalence of hybrid business models, terms such as “click and mortar” and “bricks and clicks” have been coined to describe them.
Gymboree, The Limited, Radio Shack, and GameStop are all closing stores nationwide despite fairly sustained growth in the brick-and-mortar landscape. Meanwhile, several other major retailers have declared bankruptcy, including Payless Shoe Source and Sears.
However, several large online companies have seen the benefits of the brick-and-mortar model by opening brick-and-mortar locations. Amazon.com Inc., for instance, has opened brick-and-mortar stores to reinforce customer relationships and market its products. Aside from opening a cashier-less grocery store near Seattle and opening dozens of local bookstores, Amazon acquired grocer Whole Foods last year for $13.7 billion, a move many analysts said demonstrated the company’s urgent desire to reinforce its physical retail presence.
Although some types of businesses, such as those in the service industry, might be more appropriate for brick-and-mortar formats, such as hair salons, veterinarians, gas stations, auto repair shops, restaurants, and accounting firms. Consumers who buy at a brick-and-mortar store have several advantages. Marketing strategies for these businesses must emphasize these advantages.
There is no denying the fact that retail has changed, and the brick-and-mortar shops must evolve to keep pace with the technological changes in order to avoid becoming the next Sears or Payless.
This version of a virtual company is a way to structure an innovative start-up organization in a way that allows greater flexibility in the use of financial and human resources and provides greater potential for new product development and growth. A similar model is used in almost every sector today, including financial, medical, investment, etc.
In many ways, that is different from the traditional business model. No solo business product is involved in running this type of corporation. Business activities are overseen by many people and departments so that there is not one person in charge of everything.
Several tasks must be performed by people or departments in the original business, including data refinement, planning, and manufacturing processes. These types of organizations are different in that significantly fewer responsibilities are involved. Rather than hiring employees, a wide variety of individuals with different skills and talents perform specific tasks. As a result, this type of business entails fewer costs of doing business.
Also, if your start-up company relies on a highly technical environment, then this traditional business model may not be ideal for you. It would be necessary to use a business unit that provides specific services and products to meet your needs. You can easily get the support of experts who can help you in the process of implementation and maintenance of your digital business model.