Why online retailers are heading to the high street

London - Online fashion retailers have set a precedence to adopt omnichannel strategies, accounting for 29.6 percent of all all online retailers taking up physical retail space in the UK.

According to global real estate service provider Savills, their latest report Retail Revolutions: From Digital to Physical shows pureplay brands are making the transition from online only to bricks and mortar retailing. These include Missguided opening its first store at Westfield in Stratford and brands Finery and Little Mistress opening concessions in department stores.

Online sales growth in the UK is expected to slow from 11.4 percent per annum between 2012 and 2016 to 4.8 percent by 2022. Howe ver, the firm states that it is not a case of online versus offline, but rather how the two platforms can work together to provide the best ‘total’ retail experience.

Consumer preferences at the core of retailing retailers

Marie Hickey, commercial research director at Savills, comments: “When it comes to fashion and homeware, the biggest driver of total retailing continues to be consumer preferences. In particular, the desire to touch and feel a product before purchase remains strong, meaning physical stores play an important role in driving both online and offline sales. Stores can also deliver convenience to customers, a key attraction of shopping online, in the form of click and collect services.”

True digitisation of experience will now be at the forefront of store evolution, says Savills, which to date has centred largely on hardware, such as providing iPads to allow shoppers to search for products online. The evolving focus is on creating integrated software solutions, which can provide the same personalised shopper experience in-store that consumers have become accustomed to online, and enhance the speed and ease of payment.

While the transition into physical retailing is positive news for the property sector, Savills also says that retailers are becoming more selective and measured in the size and location of their stores, which is likely to result in a strategic focus on major retail centres. For some, including Made.com and Sofa.com, stores are not only a way of selling products but an opportunity to showcase and promote the brand in key urban locations, giving them the greatest possible exposure.

Evolving store experiences will be digitized

Sean Gillies, head of UK retail at Savills, adds: “Despite increasing recognition of a physical store’s role in raising brand awareness and revenues, this is unlikely to lead to a flurry of national requirements from pureplay retailers making the transition to bricks and mortar. The most significant impact on retail property will instead come from digitisation of the in-store experience, as mobile payment, customer recognition technology, live inventory tracking and monitoring shopper engagement with products become the norm. The concept of stores remains very much alive and well, though their appearance and the activities that take place within them will continue to evolve.”

Credits: Photo; Savills, source: Savills report: Retail Revolutions, From Digital to Physical