Food-based retail a safer investment as two-thirds of European fashion customers happy to shop online
The growing demand among Australian commercial investors and developers for food-based retail shopping centres has been partly vindicated by a comprehensive European survey that has found that two-thirds of online shoppers are happy to purchase clothing and footwear without trying them on.
Only a third of the 10,000 European shoppers surveyed by CBRE described the “touch and feel” in-store experience as important or extremely important.
Furthermore, the survey found that clothing and footwear are among the internet’s fastest-growing retail categories, particularly among younger shoppers, who also use the internet to buy computer games and music.
Perhaps most telling for Australian fashion retailers, online-only fashion store ASOS is the UK’s fastest-growing retailer.
Overall, two-fifths of the 10,000 shoppers surveyed by CBRE between May and June 2011 in Great Britain, France, Germany, Sweden, Spain, Italy, Poland, Belgium, Hungary and Russia said they shopped online.
However, the survey also found that the physical store remains an essential part of the shopping experience, with 90% of people stating they visit shops to view products before buying online.
Recent research by Knight Frank forecast strong demand for food-based neighbourhood shopping centres in 2012 from private investors, unlisted property trusts and syndicates.
Following publication of annual results, Stockland said its new shopping centres would have a higher proportion of food, leisure, retail services and entertainment offerings following research that found that higher-end fashion is more exposed to online sales.
In its annual results Mirvac revealed that Coles and Woolies accounting for a quarter of rental income of it retail portfolio with fashion stores contributing a combined 19%.
Despite only canvassing the opinions of European shoppers, CBRE senior manager for retail services James McNeill says the results are likely to be closely monitored by Australian retailers, given the intense focus on the impact of online retailing.
“Although it’s clear that an online presence is now vital for any leading international brand, our research shows that the most successful retailers are those who understand how consumer channels such as online and in-store combine to create a truly multi-channel offering,” he says.
“A store supplemented with an online presence is the best of both worlds in most cases.”
In a recent report, Savills head of research Tony Crabb said shopping centres would need to follow retail strips and start offering products and services that could not be provided via the internet such as food vendors and hair salons.
Savills associate director of retail services Michael Di Carlo says retailers should also investigate the latest technological innovations such at the “multi-channel retailing concept”, which is now the norm in the US and Europe.
Such a multi-channel approach is being pushed by shopping centre giant Westfield, which revealed in its half-year results today that it has signed up 140 retailers to its westfield.com.au transactional site.
In western Europe the propensity to shop online correlates with wealth – 61% of higher earners shop online compared with 44% of lower earners, according to CBRE.
Men are leading the online shopping charge, the survey also found.
Photo courtesy of Tourism Victoria