Creating synergy with a clicks and mortar approach

Abstract

With the luxury of 20–20 hindsight, it has become increasingly clear that the Midas touch exhibited by virtual entities was reflective of an irrational exuberance. It was only a few years ago that the dot coms were extolled while the brick and mortars saddled with “burdensome” physical assets, and were ridiculed for being late in the e-commerce game. The pure plays drew visitors and increased revenue growth, but they couldn’t keep them loyal or improve the bottom line. Now, in the years following the dot-com collapse, successful firms are focusing on something new and yet far more traditional—creating lifetime customer value. This value doesn’t create a separate e-commerce appendage to the traditional firm nor does it assume that pure digital firms are the best way to capitalize on the Internet. In other words, it does not demarcate between the physical and virtual worlds, but strategically ties them together into a seamless customer experience. Generally referred to as the Clicks and Mortar model (CAM), companies are working on exploiting synergies between physical infrastructure and virtual channels to provide better service to customers. Although, the CAM approach poses many challenges like managing channel gaps, integrating processes, managing different cultures, and retaining flexibility, recent opinion is tilted towards their likelihood of success [2]. So, it is important for companies to understand the strategic options for synergy between channels and how it can be profitably leveraged. Both traditional and Internet based companies have taken initiatives in utilizing integration strategies to enhance customer value. Pure plays are adopting multiple approaches in penetrating into the physical channel [1]. Bluemercury.com, a company that sells cosmetics online, has opened multiple stores to create physical presence. Art.com is banking on catalogs and has opened kiosks in shopping malls to pursue multi channel strategy. On the brick and mortar side, Lids a hat specialty store