New research shows that retailers without a bricks-and-mortar presence experience much lower sales in areas where competitor retailers maintain physical stores.
Produced by CACI, the research – based on data from a UK-wide survey of 2,500 consumers – found retailers that do not maintain a physical store presence experience 50% lower ecommerce sales compared to those that do within a certain catchment area.
The survey found more than half of all online spend “touched” a physical store at some point during the transaction – be that through click and collect; in-store ordering or “try before you buy”.
CACI said online sales are on average 106% higher for retailers within a physical store’s catchment. The effect was even greater across categories such as electronics (154%), fashion (124%) and sportswear (124%).
The research found just 9.6% of all current online spending came through purely online channels.
CACI director of property Alex McCulloch said the report highlighted the “unintended consequences” that could come from retailers retreating from physical store estates.
He added: “The halo effect highlights two key points as the industry wrestles with how it evolves in the face of seismic shifts in consumer behaviour. Firstly, brands should carefully consider the unintended consequences of downsizing their portfolios. What might seem an effective way to reduce costs may also undermine the viability of the business due to the positive impact stores have on online sales.
“As importantly, the research also points to the need for landlords and brands to work together. Consumers move seamlessly from one channel to another, which means neither side has the upper hand. Both sides must recognise the importance of stores across a retailer’s wider business and both should unite in building a stronger, more relevant, and therefore more resilient, offer for consumers.”
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