Shop fronts will continue to complement a business' online presence as more firms take on a ‘multichannel’ approach, according to a new study.
Commercial real estate services firm CBRE has canvased the opinions of 50 leading international retailers with a combined store network exceeding 32,000 stores globally, to find out how the internet is damaging bricks and mortar stores.
The report reads: “Multichannel retailing allows the consumer to transact via a variety of connected channels such as in-store, online over a computer, and via a mobile site or ‘app’."
“While investment in multichannel is important, investment in new and existing stores remains the number one priority for retailers.”
Speaking at the recent Real Estate Business Technology Roundtable, general manager - real estate at Fairfax Marketplaces, Tony Blamey, said that principals will need to keep a shop front.
“There’s a real benefit in having a connection within the local community and being in the 'High Street'," he said. "Being a face that’s known, and a brand that’s known. The shop front provides that to a large extent.”
Joshua Loudoun, CBRE regional director for retail services, echoed Mr Blamey’s point.
“The other important thing to bear in mind is that shopping online is all about trust and there is no better way to build trust than by having a physical store presence,” he said.
Peter Gold, head of cross border retail - Europe, Middle East and Africa (EMEA) at CBRE, said the future is bright if offices embrace the multi-channel approach.
“Our message to the retail and real estate industry is don’t panic," he said. "Consumer-driven technology continues to advance and contrary to widely held assumptions multichannel retailing is actually complementing not competing with existing store networks."
“In reality, multichannel is encouraging shoppers to visit stores and is driving additional business.”
Scott Wulff, CEO of MyDesktop said while shop fronts will remain important to real estate agencies, they may become smaller.
“It will go from being the ‘super’ shop front to … being a small [office] because you don’t need that massive exposure," he said at the Technology Roundtable. "You’re getting thirty times the exposure of your brand through effective social media marketing.”
Charles Tarbey, chairman at CENTURY 21 Australasia, recently told Real Estate Business that principals who didn't have shop fronts were effectively removing themselves from the community.
"In those local areas one of the big things is belonging to the community, and if you’re away from the community the only time they see you is on the internet or on your signs, and you don’t have that shop front," he said.
Investment in new and existing stores is also the number one priority for international retailers over the next two years, the report added, with the majority requiring a greater number of stores and increased shop space because of their multichannel strategy.
According to the report, 70 per cent of retailers see themselves primarily as “bricks and mortar” retailers; however, in two years’ time 63 per cent will have converted into fully integrated multichannel businesses.
The report considers social networking and investment in mobile-commerce as secondary issues.