BUAD 307





04--“Bricks-and-clicks” potential

PowerPoint Narration

There is a potential for synergy between brick-and-mortar retail operations and online sales for the same firm. For example, if both the Staples retail stores and its online operations are owned by one firm, these assets will generally be worth more than if two different firms each owned one of the two for a number of reasons:

  • Retail chains that customers have already patronized have an established reputation and are more likely to be trusted when consumers are looking for an online seller.
  • The seller can avoid using valuable floor space on products with low sales volume by selling these only online.
  • Items bought online can be returned to a retail store, reducing costs for both the customer and the seller.
  • With combined higher sales volumes from the two outlets, the firm gains greater bargaining power with suppliers and will often be able to negotiate lower prices.  These lower prices be used to increase margins and/or to offer customers lower prices that can lead to even higher sales volumes.


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