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Brick-and-mortar stores across the world will be squeezed further by the growing popularity of e-commerce, with online shopping anticipated to account for 16 percent of the overall global retail sales by 2021, according to the latest report from TH Real Estate.
“In tomorrow’s world, the number of retail casualties will increase, and we will continue to see store closures and online sales growth outperform,” said it’s Associate Research Director Angela Goodings.
But retail is still alive and kicking as the best shops have enjoyed near fully occupancy throughout the emergence of e-commerce since 2003.
In fact, physical stores across the world presently capture over 85 percent of all retail sales. Even in the most mature European e-commerce market, the UK, such properties are expected to make up 73 percent of all sales by 2021, said the report, citing 2017 figures from GlobalData.
But to become one of those sought-after shops, retailers and landlords are advised to evolve their premises into spaces where “people want to be”.
“Retail environments are moving from inventory centres to multi-experience spaces. The purchase of goods is no longer the sole reason that people come to visit. With e-commerce growing, the need to encourage/inspire people out of their homes to physical spaces has intensified,” explained the report.
An experiential centre should feature the best range of flagship brands, both fashion and technology. It should offer a full range of services (banks, phones, pharmacy) and specialist destinations like delicatessen and children’s wear.
Moreover, these shopping centres should be convenient and accessible in order to compete with online sales, as the latter’s cost is sometimes pricy, while delivery could take a long time.
Aside from offering discounts and bargain, shops can also attract more clients by providing better connectively in the form of Wi-Fi and being covered by 4G/5G networks. Another important pull factors are wellness facilities, given the growing population of elderly and health enthusiasts.
“The smartest investors will invest in experiential, accessible, value and lifestyle centres, making sure all types have a focus on flexibility. The fragmented nature of the retail environment means that an asset type, its consumer traits and personality, as well as locational factors, need to be assessed to understand long-term investment value,” Goodings added.
This article was edited by Keshia Faculin.
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