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Stores will continue to provide value for retailers as online sales grow

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LONDON — Stores are still a key part of the multichannel shopper journey – physical store sales accounted for more than 80% of total retail sales in 2017, though this is decreasing as online sales continue to rise, according to Global Data, a leading data and analytics company. While stores will continue to complement online growth, they will remain more important in some sectors, such as food and grocery and health and beauty, compared to sectors such as books and electronics.

Charlotte Pearce, retail analyst for Global Data 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.”

Stores also contribute to spend via the online channel through click and collect sales as well as sales of products whereby shoppers have browsed in store 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 in store.

Pearce continued, ‘‘Food and grocery and health and 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 less store closures so far in 2018, than in other areas. Sectors with a higher online penetration, such as electronics and clothing and footwear, benefit more from higher click and 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 rationalizing 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 in store,’’ she added.


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