A Project Report

On

Competitive advantage of online selling

By brick and click company

Submitted in partial fulfillment of the requirement for the award ofTwo year full time, Masters in Business Administration.

Submitted To Submitted By

PRIYANKA GARG

INTRODUCTION

BRICKS-AND-CLICK

Bricks-and-clicks is a business model by which a company integrates both offline (bricks)

and online (clicks) presences. It is also known as click-and-mortar or clicks-and-bricks, as

well as bricks, clicks and flips, flips referring to cataloes.

 

For example, an electronics store may allow the user to order online, but pick up their order

immediately at a local store, which the user finds using locator software. Conversely, a

furniture store may have displays at a local store from which a customer can order an item

electronically for delivery.

 

The bricks and clicks model has typically been used by traditional retailers who have

extensive logistics and supply chains. Part of the reason for its success is that it is far easier

for a traditional retailer to establish an online presence than it is for a start-up company to

employ a successful pure "dot com" strategy, or for an online retailer to establish a traditional

presence (including a strong brand).

 

The success of the model in many sectors has destroyed the credibility of analysts who

argued that the Internet would render traditional retailers obsolete through disintermediation.

 

Advantages of the Bricks and Clicks model

Click and mortar firms have the advantage in areas of existing products and services. In these

cases there are major advantages in retaining ties to a physical company. This is because they

are able to use their competencies and assets, which include:

 

- Core competency. 

Successful firms tend to have one or two core competencies that they can do better than their

competitors. It may be anything from new product development to customer service. When a

bricks and mortar firm goes online it is able to use this core competency more intensively and

extensively.

- Existing supplier networks. 

Existing firms have established relationships of trust with suppliers. This usually ensures

problem free delivery and an assured supply. It can also entail price discounts and other

preferential treatment.

 

- Existing distribution channels. 

As with supplier networks, existing distribution channels can ensure problem free delivery,

price discounts, and preferential treatments.

Brand equity

Often existing firms have invested large sums of money in brand advertising over the years.

This equity can be leveraged on-line by using recognized brand names. An example is

Disney.

 

- Stability

Existing firms that have been in business for many years appear more stable. People trust

them more than pure on-line firms. This is particularly true in financial services.

 

- Existing customer base

Because existing firms already have a base of sales, they can more easily obtain economies of

scale in promotion, purchasing and production; economies of scope in distribution and

promotion; reduced overhead allocation per unit; and shorter break even times.

 

- A lower cost of capital 

Established firms will have a lower cost of capital. Bond issues may be available to existing

firms that are not available to dot coms. The underwriting cost of a dot com IPO is higher

than an equivalent brick and click equity offering.

 

- Learning curve advantages

 Every industry has a set of best practices that are more or less known to established firms.

New dot coms will be at a disadvantage unless they can redefine the industry's best practices

and leap frog existing firms.

 

Pure dot coms, on the other hand, have the advantage in areas of new e-business models that

stress cost efficiency. They are not burdened with brick and mortar costs and can offer

products at very low marginal cost. However, they tend to spend substantially more on

customer acquisition.

Brick ‘n Click is a fully integrated end-to-end retail/wholesale management system which

offers integration of your current sales operations with up to four new sales channels. Sell on

eBay auction, eBay Stores, Web Store, Amazon, ProStores and your own retail store, all the

while maintaining a single database for sales and inventory reconciliation.

In this new era of retail, increased customer demands in the marketplace and the need to

increase profitability have changed the way retailers are doing business. It is increasingly

more difficult for retailers to compete with the super large, multi-store chains and

discounters. However, thanks to the new technology tools available today, MTI is leveling

the playing fields and the picture gets better and better for small to medium sized Retailers.

Competitive advantage

A competitive advantage is an advantage gained over competitors by offering customers

greater value, either through lower prices or by providing additional benefits and service that

justify similar, or possibly higher, prices. For growers and producers involved in niche

marketing, finding and nurturing a competitive advantage can mean increased profit and a

venture that is sustainable and successful over the long term. This fact sheet looks at what

defines competitive advantage and discusses strategies to consider when building a

competitive advantage, as well as ways to assess the competitive advantage of a venture.

Competitive Strategies/advantages

Cost Leadership Strategy

The goal of Cost Leadership Strategy is to offer products or services at the lowest cost in the

industry. The challenge of this strategy is to earn a suitable profit for the company, rather

than operating at a loss and draining profitability from all market players. Companies such as

Walmart succeed with this strategy by featuring low prices on key items on which customers

are price-aware, while selling other merchandise at less aggressive discounts.

Differentiation Strategy

The goal of Differentiation Strategy is to provide products that stand out from competitive

offerings. An example is Southwest Airlines, which promotes its no-fee baggage handling as

unique from other airlines.

Innovation Strategy

The goal of Innovation Strategy is to leapfrog other market players via the introduction of

completely new or notably better products or services. This strategy is typical of technology

start-up companies, who often intend to "disrupt" the existing marketplace, obsoleting the

current market entries with a breakthrough product offering. It is harder for more established

companies to pursue this strategy, once their product offering has achieved market

acceptance.

Apple has been a notable example of this strategy, for example, with its introduction of iPod

personal music players, and iPad tablet computers.

Operational Effectiveness Strategy

The goal of Operational Effectiveness as a strategy is to perform internal business activities

better than competitors, making the company easier or more pleasurable to do business with

than other market choices. State Farm Insurance pursues this strategy by promoting their

agents as "good neighbours" who actively help customers.

Technology-based competitive Strategy (Project Socrates)

In the United States of America during the Reagan Administration, a team of experts led by

Michael Sekora was brought together to 1) determine why US industries were losing their

ability to compete in the world marketplace and 2) develop a solution to restore US industry's

ability to compete. As a result, Project Socrates was initiated. The Socrates team launched

one of the most in-depth research undertakings ever conducted in the US intelligence

community, producing ten key findings that became the basis for the "Socrates technology-

based competitive strategy" system, and support tools for developing and executing

competitive strategies.

The Socrates system was successfully deployed and considered instrumental in the economic

recovery of the 1980s. However, early in the George H. W. Bush presidency, the program

was de-funded by Bush for political reasons.

Leaving the government shortly after Socrates was de-funded, Michael Sekora continued

refining the system and applying it to individual companies. Recently legislation has been

introduced to revive the Socrates system as a solution to the US current economic downturn.

E-COMMERCE: GLOBAL TREND

E-commerce globally has been on the rise. Both travel and retail have grown faster than

several other categories in India. Travel visitation has an overall reach of close to 40%

worldwide and has grown over 12% Y-o-Y.

Retail visitation has an overall reach of close to 72% worldwide and has grown over 13% Y-

o-Y. More than a billion people worldwide visit retail sites every month.

In India, Travel has always been ahead of the curve in terms of visitation and transactions

compared to world averages and is at 44% penetration and has grown over 41% from last

year.

Retail has grown 43% and reaches 60% penetration among online users, but is still below

world averages. This shows the immense potential that the retail category holds in India with

online retail filling the distribution and convenience gap. The ecosystem to support growth in

online retail has also evolved including improvement in logistics and awareness among

brands in making the products available online.

Bricks-And-Clicks Strategy Will Dominate E-Commerce

International Data Corporation (IDC), a Framingham, Mass.-based information technology

research firm, says that the U.S. online jewellery market (e-commerce) will grow from $77

million in 1999 to more than $1 billion in 2004. The research contends that people who shop

online are becoming increasingly Internet-savvy, to the point of feeling comfortable with a

$1,000 online purchase.

"The market will defy the conventional wisdom that says consumers would want to see and

hold fine jewellery before they plunk down large amounts of money," says Jonathan Gaw, a

research manager with IDC's consumer e-commerce major purchases program, who

conducted the research.

Many factors contribute to this conclusion, Gaw says, including the increasing number of

jewellers going online with Web sites, the cost savings of buying products online, technology

improvements, and the lack of pressure felt by consumers buying online.

In addition, Gaw says that brick-and-mortar stores that move online will have a significant

advantage over both jewellery "pure-play" e-tailers (companies that exist only on the

Internet) and brick-and-mortar stores in other industries. He cites two reasons for this: name

recognition of the jeweller and the service that accompanies a fine jewellery purchase, such

as repairs.

"The high price tags mean that customers will probably always require some hand-holding

and assurances during the process, and they will have the security of having a store to which

they can return merchandise," Gaw says. "It will benefit those who have 'bricks-and-clicks'

operations."

He adds, "I'm concerned about the pure-play online player. In this market you need to create

relationships with customers. It's not the same as selling tires. You can't just throw a lot of

money on a Web site and expect to be successful."

Other research on consumer shopping patterns supports the IDC findings.

For example, an Andersen Consulting survey of Mother's Day shoppers reveals that 43% of

Internet users are uncomfortable purchasing gifts from pure-play e-tailers. Only 1% said they

prefer to shop with Internet-only companies, while 36% said they would rather shop at brick-

and-mortar Web retailers. Their main reasons for choosing brick-and-mortar retailers include

ease of making returns or exchanges, familiarity with the product, and familiarity with the

retailer's name and reputation.

Giga Information Group Inc., a New York-based information technology consulting firm,

predicts that by 2002, multichannel retailers-those that sell over the Internet, in stores, and

through mail-order catalogs-will dominate Web sales.

9 Reasons to Put Your (Offline) Business Online

First of all, let's clarify something. In the sense of this article a “traditional company” is one

with a physical location and sells either in person or by phone or mail. They may or may not

have walk-in customers. Essentially, a traditional “brick-and-mortar” company is one not

selling online. Of course, these are being fewer and fewer every year.

There is much said about doing business on the internet or “putting your business online”. To

many it may just sound too complicated or too risky. Learn why you shouldn’t do business

online. But there are many good reasons to begin selling (and running your business) online.

Here are the top nine reasons:

The completive advantage of online selling by Brick and Click

Company

1. Your Company Image 

While this alone isn’t enough to create a website and begin selling online, it is an important

factor to consider. Without a website or online presence prospective clients could begin to

wonder how serious you are about business. Today, companies of all sizes and industries are

establishing a successful online presence.

2. 24 Hour Availability

 While some fast food restaurants, grocery stores and gas stations manage 24 hour service, it

is impossible for most businesses. That is, without the internet. A key benefit to having an e-

commerce web site, is that your clients and prospects can read about your products and place

orders at anytime - day or night. On regular business days or holidays. Imagine what being

open 3-4 times longer could do for your business.

3. Better Customer Support 

The internet allows you to answer questions, give sales seminars and solve customer

problems - all without taking any of your time. Create a video, a product spec sheet or a FAQ

(frequently asked question) section once, and you can direct clients to that information for

years. Not only does it save you time, but you’ll be providing better service. Your clients and

prospects are looking for specific information, such as:

Before they make a buying decision

To solve a problem with an existing purchase

4. Very Low Start-up Costs 

Starting out online means very low start-up costs. You have no buildings to construct, no

vehicles to buy and few (if any) staff to hire. Simply build your site and start selling. If you

are already selling offline then the transition can be very smooth. You continue selling the

same products that you know and have a good supply of. Putting your company online simply

gives you a new source of customers.

5. The Internet Was Made For Business 

The beauty of the internet is that your prospective client(s) can literally be just one click away

from your online store. Through the internet you can now educate, instruct and solve clients

problems. You can accept orders and payments and receive them directly to your inbox.

6. Live anywhere 

Are the long cold winters starting to get you down? Are you tired of the constant heat and

humidity where you live? Taking your business online might just free up your location and

allow you to live where you want - not where you have to. As long as you have a solid

internet connection you can live virtually anywhere while you conduct your online business.

Many people live in one continent, have their hosting on another and their warehouse on yet

another. The world has gotten very small and you can take advantage of this. You could even

move to the Caribbean or South America, enjoying a low cost of living, while doing business

online.

With few exceptions the internet reduces your need to “be” somewhere. Live where you want

to, and let your business adapt to your lifestyle instead of the other way around. There are

some notable exceptions, like landscapers, surgeons and home painters who must be in a

specific location to perform their work.

7. Reduce Operation Costs 

Just one single task can make a significant difference in cost savings. For example, receiving

orders online reduces the need for customer service staff. With comprehensive sales and

product information online, you’ll simply receive purchase orders and payments via email or

into your database. Staff numbers can be reduced, thus office space and related office

expenses. Making use of various online service providers you can now take all aspects of

your business online, such as purchasing, billing, order fulfillment and shipping. Other

functions can include pre-emptive customer service - such as answering client questions via a

FAQ section or a customer forum.

8. Target the Global Market 

With your brick and Mortar Company, you are limited to the amount of individuals who can

visit you at any given time, let alone find you. With a good website, you can literally have

thousands, even tens of thousands of people visiting your online store at once. Imagine the

potential for your company, if you could expose your products and services to a potentially

unlimited number of interested people.

Being able to have thousands of visitors and actually having them are two different things.

The success of an online business depends on the same thing as any off-line business:

marketing. Learn how to increase blog traffic. Content marketing is a great way to increase

traffic to your site / online store. Social media can be a powerful and inexpensive (free) way

to drive qualified prospects to your site. Learn how to get started with social media.

9. Increase Company Responsiveness

 The internet allows you to deliver your proposal, purchase order, order confirmation quickly

- in many cases instantly - to your clients. Online stores will process orders and confirm them

to the client. In the olden days, purchase orders were called in, mailed or dropped off.

Depending on the workload of the sales staff, it could have taken hours, or even days to

process the order. With a competent online store application, you can automatically track

inventory, sales numbers, outstanding orders - everything. Faster response time means

happier clients and less administrative work for you.

10. Speed. 

Electronic communications allow messages to traverse the world almost instantaneously.

There is no need to wait weeks for a catalogue to arrive by post: that communications delay is

not a part of the Internet / e-commerce world.

11. Market space. 

The market in which web-based businesses operate is the global market. It may not be

evident to them, but many businesses are already facing international competition from web-

enabled businesses. This becomes the part of every research and thesis on Ecommerce topic.

BRICKS-AND-CLICKS VS. PURE PLAY

Pure Play and Bricks-and-Clicks retailers are two major categories of online retail business

models (Turban, King, Viehland, & Lee, 2006). Increasingly, manufacturers and wholesalers

have adopted multi-channel distribution systems in which they also sell directly to the end

customer. Both online and physical stores can add paper-based catalogs.

However, firms vary considerably in their use of Web sites (Hsu, Kraemer, & Dunkle, 2006);

the percentage of the transactions through the Web site still enables the classification of

retailers into Pure Play (meaning they sell exclusively through the Website) vs. Bricks-and-

Clicks (meaning they make only some of their sales through it).

Harden, Heyman, and Bruner (2000) suggested evaluating a commercial Web site from six

aspects.

First, e-commerce has increased the consumer awareness of products. The Web, together

with television, radio, print, billboards, and other advertising media, can be a cost-effective

way to build consumer awareness of a product brand. The Web can build such awareness

even though the majority of Web surfers do not click on banner ads. This is a big difference

from traditional media such as television, magazines, and newspapers, which do not allow

click-through (Roehm & Roehm, 2005). Strong brand name recognition is an important

means of capturing customers (Coltman, Devinney, Latukefu, & Midgley, 2001).

Second, e-commerce has saved the cost of direct marketing. Compared to traditional

direct mail, the Web can provide much advantage when the cost of paper, postage, and other

expenses are considered. Other advantages include the availability of real-time inventory data

and the reduced cost of human data entry. E-commerce has also accelerated direct marketing

activities (Nadherny, 1998). It takes a much shorter time to test direct marketing concepts

through the Internet.

Third, e-commerce has increased the sales of products both online and off-line. The Web

is a means to make e-commerce become a reality by providing online sales. Sales are the

most obvious performance that management wants.

With the enhanced customization capabilities available from new technologies, firms can

focus their marketing effort on customer segments with the highest profit potential. After all,

the 20-80 rule still holds in the virtual world (i.e., 20% of all customers may be responsible

for 80% of a firm’s profits).

Fourth, e-commerce has facilitated customer support. One of the Web’s most important

applications is customer support. Three major opportunities in this area are revenue

enhancement, cost-avoidance, and other “soft benefits.”

Fifth, e-commerce has enabled firms to collect more information about the market. A

Web site can gather more information than traditional market research can. For example, a

site can recognize patterns in users’ behaviour, surmise visitor demographics, and personalize

content for the users on the fly.

Sixth, e-commerce has provided the means of publishing advertisements. A Web site can

attract surfers and thus provide owners a chance to sell online advertising for other firms.

This is the major return for content providers such as Yahoo! and Excite. Every site can be a

portal. Compared to the traditional print media, a Web site is better at immediacy and

unlimited space (Berman & Thelen, 2004; Kulviwat, Thaku, & Guo, 2006).

Real problems in growth of Indian online market

High installation and service charges of payment gateway companies: 

Currently installation charges of different PG companies range from INR-30000 to 40000 and

on top of this based on different payment modes and plans, these companies charge 3% to 7%

commission on every online transaction. Web developer also charges fee for integrating

online payment facility on vendor’s portal. This whole investment is too high to convince a

vendor to open his online shop for an experiment. Reduction in this investment cost is

mandatory for online shopping success in India.

Lower internet speed: 

Indians are still using low speed internet services for their home use because availing higher

speed, needs costlier plans. This prevents people from opting online shopping.

Red tapeism in providing credit cards to people: 

I am sure that not every household in Indian metro cities carries at least one credit card. I

understand that banks have their own reasons to keep a check on distributing cards, but

efforts to increase credit cards user base will obviously help in growth of Indian online

market.

Lack of knowledge about using the services: 

I know some friends who had bitter experience of using Credit Cards, because they missed

paying their dues on time. Proper knowledge about how can users use credit cards for

efficient shopping or how can they use debit cards or Netbanking for online shopping, if they

do not like to use credit cards, will certainly encourage e-commerce in India.

The Assumed Advantages of Bricks-and-Clicks

Many experts have suggested reasons that Bricks-and-Clicks stores are better positioned to

reap the benefits of Internet retailing (Muller-Lankenau, Wehmeyer, & Klein, 2006; Pitta,

2002).

First, due to the brand awareness of their physical sites, Bricks-and-Clicks stores have

less trouble attracting visitors (Min & Wolfinbarger, 2005; Nannery, 2000). Shoppers who

buy from a physical store are more likely to buy from the online front of that store. Bricks-

and-Clicks stores are more likely to attract mainstream shoppers because these same people

already shop at their physical stores. Bricks-and-Clicks retailers can use the two mediums in

a complementary manner.

At the same time, the cost of establishing brand awareness for pure play is very high. The

cost of acquiring a new customer for pure plays exceeds the analogous cost for every other

sales channel (i.e., traditional, mail order, phone order, television order, and Bricks-and-

Clicks).

Second, the initial investment in an online store for those Bricks-and-Clicks firms is

lower. The existing physical store infrastructure, distribution systems, inventory and

information systems, and both hardware and software can be used for the online store without

adding excessive cost (Koller, 2001; Rayport & Jaworski, 2002). In fact, many analysts

believe the Bricks-and-Clicks model is the only viable option for online retailing. Regardless,

the lower initial investment leaves more resources for the Bricks-and-Clicks firm to allocate

to other online store-related expenses (such as promoting its Web site address).

Third, customer service favors Bricks-and-Clicks retailers. Their virtual stores can

provide in-store pickup and allow customers to return products purchased online. Large

numbers of consumers do research online and actually purchase the product from a physical

outlet (Mullaney,1999).

Fourth, the Bricks-and-Clicks model is a diversified portfolio that can better withstand

a difficult economy (Saunders & Cook, 2002).

When the online side of the store is losing money, its physical side may still profit so that the

losses reduce the taxes for its holding firm when the two sides report income taxes together.

In general, Bricks-and-Clicks companies survived during the economic downturn of 2001

while similar pure play startups failed. For example, Tesco. com, a Bricks-and-Clicks

superstore with a major grocery component, performed better because of its existing supply

network while Webvan, a Pure Play grocer, closed its doors with a record loss of $700

million during that same period.

In summary, experts have asserted, and intuition further suggests, that the Bricks-and-Clicks

model is better positioned to reap the benefits of online retailing. However, Bricks-and-Clicks

retailers have challenges of their own.

Challenges to Bricks-and-Clicks

One big challenge for many chief technology officers of Bricks-and-Clicks online stores is

the integration and leveraging of the online front with the physical front (Prencipe &

McCarthy,2002) and the integration of the online store with back-office operations

(Reinhardt & Levesque, 2004). Pure Play online stores do not have such problems. For

example, Wal-Mart.com erred by trying to mimic its physical stores by offering a huge line

of product categories online and selling items that were not economical there (Grunberg,

1999). Despite Wal-Mart’s leadership in delivering truckloads of goods to its stores, Wal-

Mart. com often failed to deliver to virtual shoppers on time during its first few years of

operation. Even worse, inventory systems could not provide real time information for the

online store.

Another major challenge for managers in Bricks-and-Clicks relative to those in Pure Play

stores is the difference in competitive pace (Grunberg, 1999). Competition in the online

world is faster. Information about an online store can quickly spread through e-mail and

bulletin boards.

Some Bricks-and-Clicks stores employ the same group of people to run the two different

types of business, and those people have difficulty handling the two differently paced

environments.

Still another challenge to the managers of Bricks-and-Clicks stores is the cannibalization

effect on the sales of their existing physical stores (Grunberg, 1999; Nielson, Host, & Mols,

2005). Online sales may reduce off-line sales, and competition between managers of the two

types of commerce within a single retailer may prevent them from cooperating with each

other.

Their conflicts may make reaping the benefits of the online store more difficult for Bricks-

and- Clicks retailers.

Finally, Pure Play retailers do not collect sales tax unless they have a physical store in the

state.

In effect, they offer the same goods for lower prices than do Bricks-and-Clicks competitors,

thus making it more difficult for the latter to reap the benefits of their online endeavors

(Spencer, 2003).

Brick ‘n Click Case Study

April 2010

Raj Kapur, the president of Arktoys, runs a retail toy store and is an eBay Power

Seller(arktoys) with a ProStores Web store. He described the Brick `n Click ™ for eBay as a

retail POS system that uniquely synchs his retail stores sales and inventory with his eBay

sales as well as his ProStores website sales.

Raj begins, “We were looking for a POS system that would give us more control over our

front of the house sales, plus covering our inventory for both of our online stores.”

“We spent a lot of time researching the web as well as trade journals for something to solve

our problems and did not find any other POS systems that would synch with eBay and

ProStores. There was just no other product out there that would help us fix the problems we

experienced.”

“As my business was growing, I noticed that my profits were being eaten up by all the extra

dogwork I had to do. Before Brick `n Click being installed, I was posting items on eBay and

ProStores but we still had to manually take inventory off of the selling floor and put it in the

warehouse and allocate it for eBay and ProStores. Of course somebody had to keep track of

inventory constantly. For example, if something was hot in the store and not selling on eBay

then we had to take it off eBay and put it on the shelf in the retail store, there were still many

mistakes being made in the process. ” I don’t have a huge warehouse like large companies do.

I have to manage what I have in stock.”

I was constantly walking around with a clipboard and counting boxes. Now I don’t have to do

that anymore and “this is a MAJOR time saver for us.

Raj continued, “Now anything that is on the selling floor in the retail store is also listed on

eBay and ProStores at the same time. Every item has its unique selling profile; some of the

products might be hot on eBay but don’t sell on the retail floor and vice versa. Now we don’t

have to decide where we should put our items, almost everything we have for sale

automatically gets listed in all three locations. This brings the greatest efficiencies in retail

merchandising management both online and off that my company has ever had.”

“Often, during busy times, mistakes would happen and an item would get sold online after it

had sold out in the mall store. I’d end up having to send a refund and apologize to my

customers instead of sending them the product they’d purchased. This jeopardized not just

my profits, but possibly the loyalty of my customers. I found this to be unworkable. I needed

some solutions to these problems” He continued, “The biggest selling point of Brick `n

Click™ that distinguishes it from other systems is the fact that you can easily manage your

inventory with multi-channel sales.”

“This produces measurable results. Before we installed Brick `n Click™, we used to have

only a hundred items on eBay. We would only list items that we specifically knew were hot

and would sell. We had no idea what the real sales trends were because we were so busy

running around the warehouse with a clipboard and moving around our products around.”

“Now, because of Brick `n Click™, we have the power of inventory management both online

and off. Our quantity of listings has grown to nearly 7 times its original amount. We now

have 600-700 items and our sales have doubled, and in some cases, TRIPLED. A significant

improvement! About 30-35% of our overall sales come from the nearly 700 items we have

online. Soon we expect to have 1200 items online. That’s an almost 800% growth in

available product in just one year!”

When Raj was asked what he would say to other online retailers with similar problems, Raj

generously responded, “The web opens up a whole new world out there that you can sell to.

With Brick `n Click ™, all your inventory issues are taken care of. You can take every item

that you have in your store and list everything on eBay, ProStores, in your retail store, or any

combination you desire. You can track your sales trends, deal with hot and slow items, and

control your inventory. It literally opens up a whole new avenue of sales without having to

pay extra rent, payroll, or overhead. There is no way an online retailer with multiple selling

venues can expand online without a solution like Brick `n Click™. “

Raj’s final comment was about the customer support he receives. He said, “MTI is always

just a phone call away. The customer service is exceptional. We are very satisfied with the

year-long relationship we have had with MTI and whole-heartedly recommended Brick `n

Click ™ to other retailers who are looking to expand their online business.”

CONCLUSION

This study found that both Pure Play and Bricks-and-Clicks firms realize their top benefits

from market expansion, but Pure Play firms reap them secondly from Back-End Efficiency

and Bricks-and-Clicks do so secondly from customer service. Moreover, Pure Play retailers

outperform Bricks-and-Clicks in the achievement of benefits in inventory management, back-

end efficiency, and cost reduction.

Pure Play firms depend on benchmarking and Bricks-and-Clicks firms rely on process

redesign and planning to achieve the benefits of e-commerce.

Pure Plays are better able than Bricks-and-Clicks to use benchmarking to realize market

expansion and customer service benefits, while

Bricks-and-Clicks are better able than Pure Plays to use process redesign alone to realize

inventory management and cost reduction benefits. Neither was better able to use EC

planning to achieve any benefits.

The study thus contributes by showing clear distinctions between the two types of online

retailers. Not only do they differ in terms of having or not having a physical presence, but

they also differ in terms of how they achieve the benefits of e-commerce. The study suggests

that Pure Plays can gain the greatest benefits from benchmarking while Bricks-and-Clicks

can do so via process redesign. It thus provides an empirical look at the similarities and

differences between the two types of retailer, and suggests future research areas and

management practices.