New stats regarding online shopping were released last week and, before the ink had dried, headlines were heralding the death of the high street.

Online sales are set to eclipse physical store spend in the next five years, decimating some 50,000 jobs in the process. So that’s it folks, but it was good while it lasted.

Or is it? What the figures fail to quantify is how much those online sales rely on physical stores.

What proportion, for example, is bought online but collected in store? How many customers decided to purchase online only after browsing in a shop, trialling a product and getting the relevant information from a knowledgeable customer sales representative?

And, even more crucially, would the sale even take place if the retailer hadn’t built up brand equity and customer engagement through a physical store presence?

Click-and-collect growth

We already know that the growth of click-and-collect is going gangbusters. According to some of the big department stores, it now represents more than 50% of all online sales – and analysts expect spending via click-and-collect to grow 82% over the next five years.

Click-and-collect is convenient for the consumer, providing an almost immediate delivery option entirely in their control and, crucially, it is sustainable for the retailer, cutting out the expensive final mile and attracting incremental sales and footfall into store.

According to Verdict, 32% of customers made an additional purchase the last time they used click-and-collect, so there is a real incentive for retailers to draw customers into store.

“Providing a physical presence that demonstrates a consistent customer experience surely remains far superior to a faceless online interchange”

David Atkins, Hammerson

And far from traditional bricks-and-mortar stores being the dinosaurs this research would lead readers to believe, 90% of European retail sales actually take place in store, according to data from the International Council of Shopping Centers. This figure is very revealing, and no doubt driven by a desire to touch, test and engage with the product.

Human nature thrives on experience and social interaction and, from a brand perspective, retailers know that one of the most effective ways to build and embed customer loyalty and trust is through first-class customer service.

Providing a physical presence that demonstrates a consistent customer experience surely remains far superior to a faceless online interchange, which invariably crashes at the crucial moment.

Online halo

And what about the ‘online halo’ effect that retailers experience as a result of bricks-and-mortar shops, which act as a marketing tool to build brand awareness and loyalty in a particular location?

Research from the Investment Property Forum, which analysed the pricing of retail space, highlighted particular benefits for certain categories, principally the fashion retailers.

N Brown has already started to quantify this benefit, reporting an online sales uplift of about 5% to 6% within a catchment following the launch of a new store. Conversely, retailers have anecdotally spoken of a negative online sales impact following the closure of a store.

So where does this leave retailers? According to Hammerson’s research report, Shopper Tribes, customers cannot be defined by channel usage. They shop a variety – with a quarter of consumers regularly using four or more channels – and expecting a seamless brand experience across the piece.

Pure-play retailers are catching on to this, with a number of well-known names now rushing to put down physical roots, where they can interact with customers and create true brand experiences.

This heralds a new era in omnichannel retailing – one where the online and the physical combine to produce a sustainable model, which importantly responds to rapidly shifting consumer expectations.

  • David Atkins is chief executive of shopping centre landlord Hammerson