A growing number of formerly ‘pure-play’ online retailers are taking physical stores as the rate of internet sales growth looks set to slow during the next few years.
New research from Colliers International shows that by 2021, the rate of growth in e-commerce sales is expected to decline from the current level of around 11% to 7%. In anticipation of this, online retailers are increasingly using physical stores to bolster their sales and their brands. 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.
The firm has analysed more than 30 different online brands across the EMEA region which are becoming ‘showroomers’. 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.
“The trend is also driven by cost considerations: it’s not uncommon for 40% of online fashion orders to be returned by the customer without making a purchase. This is imposing a huge logistical and cost burden on the online brands.”