Pure-play Internet companies operate solely on the Internet, while click & mortar business models combine a physical presence with online selling or marketing. Click & mortar businesses may operate a website that sells products or advertises those it sells on the high street. The difference between the two business models is reflected in running costs, marketing strategies and customer perceptions. Internet business have fewer overheads but businesses that have a strong street presence inspire more customer confidence.
Clicks & mortar businesses have more overhead in the form of taxes, insurance and property maintenance than their pure-play Internet counterparts. Pure-play companies still must pay taxes and sometimes insurance, but have no property maintenance costs.
Benefits to Customers
Companies that only operate online can sell products at a greater discount to customers because they have fewer operational costs. Clicks & mortar businesses can offer a more versatile service. Someone who buys an item of clothing from a street store’s website, for example, might have the option of returning the garment to her nearest store if it is faulty or doesn’t fit.
Business that combine a presence on the street with online retailing may inspire more customer confidence than those that only operate online, according to the Internet Marketing Center. Customers believe that a business is less likely to vanish overnight if it has a customer presence, the website explains. However, online businesses that have built up an excellent reputation for customer service and respond to telephone calls and emails quickly and professionally also inspire customer confidence.
Pure-play companies have to invest more money, time and effort in marketing than a hybrid businesses. Businesses that have a physical presence, particularly on a national or international scale, are already known to potential customers, whereas Internet business have to advertise their presence more aggressively. The average Pure-play company spends $82 dollars to acquire a new customer, whereas a traditional retailer spends $12 dollars, according to CRM magazine.