In the past couple of years, the retail industry has faced some of the most challenging conditions for decades but online has remained a consistent star performer.

In the past couple of years, the retail industry has faced some of the most challenging conditions for decades but online has remained a consistent star performer.

This Christmas was no different, with overall sales flat while the internet delivered robust growth. In particular, those retailers with a multichannel offering performed better than their rivals.

Multichannel represents the most significant driver of growth for UK retailers over the next few years. A successful multichannel approach that creates a seamless experience for the consumer across stores, print, online, mobile and social networks can drive sales for all channels, not just the internet.

A recent survey conducted by Deloitte found that 21% of all internet transactions involved some research in-store. The survey revealed that multichannel consumers spent more per transaction than store or online-only shoppers and that multichannel is becoming popular across all social classes and throughout the country, with the highest proportion of multichannel consumers coming from Yorkshire, the east Midlands and Wales.

However, the performance of multichannel presents a number of challenges to retailers and their landlords. Retailers are considering the role of their property portfolio and landlords have been forced to look at the structure of lease agreements to try to ensure the true contribution of stores is reflected.

The imperative for property companies to find a way to reflect this contribution is clear. Between 2008 and 2010, total physical floor space decreased by about 12 million sq ft, largely as a result of insolvencies but also some rationalisation of store portfolios.

However, over the same period, online retail added the equivalent of 25 million sq ft of space and now accounts for about 10% of the total retail market.

This reduction in physical space led to a recovery in sales per square foot, but the pace of online growth indicates this metric will soon start to fall again without a further contraction in floor space. Alternatively, retailers and landlords will need to develop a method of calculating the impact of multichannel.

The demand from consumers to research and test products before purchase will result in retailers using some of their space as showrooms for the wider range of products available online.

Stores will also give multichannel retailers an advantage over internet-only by providing them with the capacity to fulfil same-day orders. There is also some evidence that suggests retailers enjoy higher online sales in areas where they have a physical presence.

Bricks and mortar will continue to be critically important to the modern retailer and we shouldn’t forget that the vast majority of retail sales still occur in physical stores.

However, the world is changing and while in-store research, click-and-collect and the in-store return of internet purchases make this a complex challenge, it is something that is rapidly rising up the agenda of both retailers and the property industry alike.

Richard Hyman strategic, retail adviser to Deloitte