Spotlight: Retail Revolutions

Retail Revolutions
Property perspectives

27 September 2016, by Marie Hickey

How people shop, how people want to shop, and what this means for property


Clearly the role of the ‘physical’ store is far from diminished. The survey results highlight that in the case of fashion purchases, just over half of consumers research online before making a purchase in store. This, combined with the overwhelming 75% of respondents who stated that they prefer to try on clothes before buying, means visiting a retail store is a key part of how people like to and want to shop.

If visiting a store is the preferred option, what types of centres do people like to visit for their fashion needs and do they meet their requirements?

Consumers tend to be most satisfied with medium secondary aspirational retail centres with these having the highest overall satisfaction rating (66%). Good examples of these types of centres are Henley and Ilkley. Yet, large secondary aspirational towns have the lowest overall positive satisfaction rating in terms of delivering fashion retail (47%).

This could be because in smaller locations people have realistic expectations of what a location can deliver, whereas consumers expect larger retail places to be more comprehensive. Perversely it is the very nature of aspirational towns’ provision that provides its point of difference over somewhere with a more ‘rounded’ retail offer.

Secondary retail centres might not provide the depth of range that larger destinations do, but they still account for 35-50% of preferred shopping trips for people who live in these catchments. This is food for thought for brands looking to extend their store portfolios, as a lack of a sufficient fashion offer can drive people online, despite their preference to shop in-store.

Tapping into the secondary and tertiary markets can provide access to significant consumer spend; a fact not lost on Value retailer Pep&Co who have expanded aggressively into these markets in the last 12 months.

With 48% of consumers going online when their chosen shopping destination does not fulfil their fashion needs, compared to 38% who would visit a larger town or shopping centre, it is clear that the importance of convenience and ease of shopping can outweigh the benefit of travelling to a retail destination.

In fact there is the risk that in some cases spend leakage is off the ‘high street’ altogether. Traditionally we may have assumed that in those centres where the local offer does not meet shopper needs, spend would have been leaked to larger and/or better supplied centres. However, survey responses suggest that this spend could in fact be leaking beyond the physical store altogether as those centres that are struggling the most have the highest proportion of internet spend.

The positive assertion is that changes to shopping habits like these can be reversed. Consumers embrace e-commerce, but there is an overwhelming preference across the demographic spectrum to shop instore for social and entertainment experiences, dining and for trialing products. Click-and-collect and same day delivery has so far had most investment in the largest centres, but there are plenty of opportunities in less urban locations if the right cost model can be applied.

It is this investment, bringing the online and offline retail experience together, that is adding to the ‘true’ value of the ‘physical’ store. Verdict estimate that 87% of clothing and footwear sales have touched a store, either through direct sales, click-and-collect and/or in-store research. This suggests the ‘online’ threat to the physical store has perhaps been over-exaggerated.

For the most successful retail brands, diversification across online and offline channels has presented opportunities. On one hand they have diversified to survive, but on the other, their overall business benefits from the role physical stores play in enhancing brand awareness. A retailer’s best online sales are often in locations where they have a store, with both channels benefiting from a symbiotic relationship.

The challenge for retailers and landlords is configuring and/or delivering stores that meet consumer’s evolving shopping habits. For example, the growth in click-and-collect and how this service is handled in-store. These requirements, however, may not be universal. As this survey highlights, shopper preferences can vary significantly dependent on type of trip (convenience vs destination), location and demographic group.

The final challenge is in apportioning the appropriate value of a store, and for landlords how they consider the significance that a particular store has in the brand’s overall performance. As our shopping habits have evolved so should the ways we value a store as the old benchmark of in-store sales would appear to be becoming increasingly obsolete.


intu Eldon Square, Newcastle upon Tyne

▲ intu Eldon Square, Newcastle upon Tyne


Key Contacts

Tom Whittington

Tom Whittington

Retail Research


+44 (0) 161 244 7779


Marie Hickey

Marie Hickey

Commercial Research

Margaret Street

+44 (0) 20 3320 8288


Subscribe to Savills research


Would you like to be notified via email about new research?