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New study: 89% of all UK retail sales touch a physical store

A new study has found that 89% of all UK retail sales in 2015 touched a store through either physical sales, click & collect or online… View Article

GENERAL MERCHANDISE

New study: 89% of all UK retail sales touch a physical store

A new study has found that 89% of all UK retail sales in 2015 touched a store through either physical sales, click & collect or online sales browsed in store.

The research from Verdict and British Land, based on 30,000 consumers, found that this boosts physical retail by 5% and demonstrates how physical and online complement each other.

With few online sales touching the store, the food & grocery sector distorts the average as it accounts for half of all retail sales. Excluding food & grocery, the boost rises to 9%.

Bricks-and-mortar retailers account for two thirds of the £34 billion of online sales, with the remainder purchased via online pure-play retailers. Looking at those bricks-and-mortar retailers, the research found that 53% of their online sales have directly touched a store.

Charles Maudsley, head of retail for British Land, said: “This research demonstrates the continued value of the physical store and the important role it plays in the lives of consumers.

“It builds on our knowledge of why people shop, to better understand how they shop across channels. We see retailers responding to this through their flagship and local stores. British Land’s strategy reflects this approach. Our lifestyle-oriented Regional and Local centres deliver a mix of retail, food & beverage and leisure to meet a range of shopper needs.

“Leading retailers and landlords need to continue to embrace omni-channel to future-proof physical stores and meet the needs of consumers today and tomorrow. We are investing in our portfolio to support a variety of shopper journeys, enhance and broaden the appeal of our assets, and create Places People Prefer.”

Women were found to use click & collect more than men, and engage more with stores overall as part of their shopper journeys. Similarly, Londoners were more likely to visit a store when they shop compared with the rest of the UK.

The age groups most attached to stores was found to be 16-24 and 25-34 year olds. Their use of online pure-play retailers was also notably low.

While half of all electrical purchases were found to be made in store, two thirds of sales relied on a store to occur. For this reason, electricals showed the highest boost at 32%, followed by sports & toys and department stores.

At the other end of the spectrum, the home sectors and the health & beauty categories had a low boost, mostly due to limited online penetration.

Patrick O’Brien, content director for Verdict Retail, said: “Electricals is one of the most mature online markets, with customers using a variety of channels in their shopper journey. The prevalence of showrooming is resulting in a number of retailers repurposing their physical stores, utilising them to display products and promote online sales rather than just to fulfil immediate sales. We expect this trend to grow as stores continue to migrate to the showcase model.”

Verdict forecasts that the true value of stores will grow faster than physical sales alone over the next five years led by a two-fold increase in click & collect. The store ‘halo effect’ is also expected to grow as store portfolios continue to positively influence online sales not browsed in store.

Ben Dimson, head of retail business development for British Land, said: “The True Value of Stores research reveals a number of thought-provoking insights, such as the importance of stores for under 35s, and the varied role of the store across sectors.

“We expect to see continued demand for physical stores from a variety of operators, and this research helps to cement their place within retailers’ plans in an omni-channel age. Even online pure-plays are dipping their toe into the world of physical, taking pop-up space or temporary units. In doing so, they benefit from the ‘halo effect’ that stores offer – generating online sales and strengthening customer relationships.”

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