Clicks and bricks - together in perfect harmony

Amazon is one online retailer that is embracing the importance of physical stores with its purchase of 470 Wholefoods stores

THE way consumers shop continues to evolve at a break neck pace and this is having a profound impact, not only on our high streets, shopping centres and out of town retail parks, but also on major industrial centres.

The retail sector has experienced a revolution over the past two decades with the inception, evolution and seemingly unstoppable growth of online shopping. The result has changed the way we live and has fed the ever-increasing appetite of customers for faster, often to the point of instant, delivery times.

That said, and while online sales now account for 16 per cent of all retail activity and cannot be ignored, growth in online sales is slowing and retailers are embracing a range of omni-channel methods to provide customers with a seamless shopping experience, regardless of channel or device to ensure they can engage, and spend, in a physical store, on website or via a mobile app as well through the likes of catalogues, or while browsing their favourite social media platform.

At the same time, those who would have once been considered ‘online only' retailers are developing new models to gain a foothold and increase their dominance in the traditional ‘bricks and mortar' retail model that now plays such a crucial part in omni-channel and the big players have deep pockets and are investing heavily in physical infrastructure to stay one step ahead and fulfil rising demand.

For years, we have been lamenting the demise of the high street as a result of online retailers' transactional websites. However, we are now seeing retailers placing physical stores at the heart of the new omni-channel world.

As growth in online transactional volumes fall, we are seeing year-on-year growth in the volume of click and collect transactions, each one involving a bricks and mortar shop. It's unsurprising therefore that click and collect is predicted to grow by 64 per cent by 2022.

Amazon is the epitome of a pure play online retailer that is quickly embracing the importance of physical stores with its purchase of the 470 Wholefoods stores portfolio as well as starting to roll out Amazon Book and Amazon Go stores.

The retail landscape of 2018 is a complex puzzle and amongst all this talk of tech, one of the UK's biggest clothing retailers, Primark, which accounts for 7 per cent of all clothes sales, on the surface seems to buck the trend and has no transactional online presence.

That said, Primark does 11 million followers on social media and a complex global distribution network that ensures their shelves are never empty, or stocking anything ‘off trend'.

The omni-channel world is having an effect on our industrial sector also with regional warehouses and distribution centres being vital for omni-channel retailers to keep up with those consumer requirements that don't involve physical interaction and, as a result, demand for space at industrial parks across Northern Ireland has been increasing, with activity expected to intensify further this year.

The consumers' ever-increasing deliver demands are also fuelling the rise in so-called ‘last mile' delivery models with trials taking place presently involving parcels delivered by drone or robotic courier, again these requiring large warehouse space at various locations that allow for speedy distribution to consumers.

It seems that to survive in a world where the requirements of consumers continually become more complex and demanding, so too will the combinations of omni-channel sales, marketing and delivery methods deployed by retailers to meet these needs but shops are not dead by any means.

:: Declan Flynn is managing director of Belfast-based commercial property agency Lisney, which works on behalf of many of Northern Ireland's most significant investors and developers as well as major retailers and businesses.


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