Are clicks taking over from bricks?
Published: 13 April, 2011
Landlords and retailers will need to work together to minimise the impact of
multi-channel retail, according to new research from Deloitte
New research by the business adviser shows that retailers are reviewing the role of their store portfolio as part of a co-ordinated multi-channel strategy.
“Landlords and retailers will need to agree a method of calculating the impact of multi-channel,” said Richard Hyman, strategic retail adviser to Deloitte. “With in-store research, click-and-collect and the in-store return of internet purchases this is a complex challenge but one which is rapidly rising up the agenda of the property industry.”
The research shows that an increasing number of consumers are researching products in bricks-and-mortar retail stores before purchasing online.
Twenty-one per cent of all internet transactions involve some research in-store and in many cases, customers are researching in-store with one retailer before purchasing online at a cheaper price with another. Online only retailers see their customers using other retailer’s stores as showrooms before buying online.
“In these challenging markets, multi-channel is going to be the big driver of growth for UK retailers over the next few years,” said Ian Geddes, UK head of retail at Deloitte. “While the impressive growth of internet retailing has diverted sales from bricks-and-mortar, we believe that online can be a vehicle for growth across all channels.
“We see a trend for retailers to use some of their retail footage as showrooms or display areas for a much wider range of products available online.
“A store portfolio also gives multi-channel retailers an advantage over internet-only by giving them the capacity to fulfil same-day orders. There is also evidence that retailers enjoy higher online sales in areas where they have a physical presence.”
Hyman added: “As a higher proportion of sales are driven online, the traditional ‘sales per sq ft’ metric may provide an inaccurate view of the store’s contribution to revenue.
“In recent years, we have seen a contraction in floorspace which has ensured that sales per sq ft have remained steady. However, whilst total floor space decreased by around 12m sq ft between 2008 and 2010, internet retail has added the equivalent of 25m sq ft. This suggests that either sales per sq ft will start to fall or we will see a further contraction in total floorspace.”
Geddes concluded: “Multi-channel is taking root across society and in all corners of the country, with the highest proportion of multi-channel consumers coming from Yorkshire, the East Midlands and Wales.
