Online retailers move into showrooms as internet growth grinds, report claims

An increasing amount of online-only retailers are taking residence in bricks and mortar stores as internet sales growth looks set to slow in the next few years.

That’s according to new research which claims that within four years the rate of growth in e-commerce sales is expected to decline from the current level of around 11% to 7%.   

A knock on effect of this has been that online retailers are increasingly using physical stores to bolster their sales.

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The new trend is being labelled ‘showrooming’ as the primary intention of these stores is not necessarily to generate sales through the tills but to reinforce customer loyalty – and spending – online, Colliers International’s report says

The global real estate advisor has analysed more than 30 different online brands across the EMEA region which are becoming ‘showroomers’. But the report does not specifically cover the mobility sector which operates slightly differently to other retail spheres.

Some online mobility retailers staunchly want to remain in the online space. Co-op Mobility recently told AMP that since its revamping it is determined to “crack online retail” in a sector which is notoriously difficult to operate in as a serious provider online.

Paul Souber, Co-Head EMEA Retail at Colliers commented: “With the rate of web sales forecast to level out over the next four years, many e-retailers have identified ‘showrooms’ as one of the remedies to a decline in profits.

“Increasingly ‘showrooms’ in physical shopping environments which both generate online sales, raise awareness of their company, promote brand loyalty and offer the customer an opportunity to see, touch and feel the products.”

Particularly in the mobility sector there is an understanding that customers need to experience and try out products before being prescribed them. This is particularly important for large items like scooters, it is felt.

One large online mobility retailer has already moved into opening physical stores after previously limiting itself to the internet.

Taking physical space also delivers benefits for landlords and retailers. Etienne van Unen, Co-Head EMEA Retail at Colliers, observes: “Because showrooms are often located in a non-prime property and in units which would not appeal to mainstream retailers, the rents they command are often acceptable to both landlord and occupier.

“The landlord is letting a property which may have been problematic or not in demand and the pure-play is getting a lower rent than they would pay for a mainstream store”.

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