Essential reading for retailers and suppliers in the home improvement market

Stores still key to shopper journey

Published: 7 June 2018 - Fiona Garcia

Despite numerous CVAs and branch closure plans on the high street, stores offering convenience and a destination shopping experience will continue to provide value for retailers, as online sales grow.

Stores are still a key part of the multichannel shopper journey, according to data and analytics company GlobalData, which recorded that physical store sales accounted for more than 80% of total retail sales in 2017 – though it adds that this is decreasing as online sales continue to rise.

The data is released following news that a raft of retailers, including as House of Fraser, Marks & Spencer and Mothercare are to close a host of branches.

The organisation believes stores will continue to complement online growth, although they will remain more important in some sectors, such as food & grocery and health & beauty, which have low online penetration.

Global Data retail analyst Charlotte Pearce said: “While online sales have grown at a fast rate, rising 60.9% between 2012 and 2017, physical sales still dominate the retail landscape for many sectors and these are an invaluable brand touchpoint for many retailers, despite rising operating costs and declining footfall.”

Global Data explains that stores also contribute to spend via the online channel through click & collect sales, as well as sales of products where shoppers have browsed instore before buying online. Stores are often the most convenient way to pick up low-value items of an essential nature or to browse and purchase big-ticket items whereby shoppers feel more comfortable buying instore.

Ms Pearce continued: ‘‘Food & grocery and health & beauty have a low online penetration and therefore add little to the true value of stores. As stores are so essential to these sectors, we have seen fewer store closures so far in 2018, than in other sectors. Sectors with a higher online penetration, such as electricals and clothing & footwear, benefit more from higher click & collect and online store-influenced sales. Retailers operating in these sectors are more at risk of CVAs as increasing online sales are eroding store sales.

"Retailers must continuously look at rationalising their store portfolios as online sales continue to grow and ensure the remaining branches are real destinations for those who wish to browse products and convenient locations for online shoppers wanting to collect instore.’’




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