Retail is going through a period of change that is perhaps greater than at any time in history.
No longer do consumers have to leave the comfort of their sofas to part with their hard-earned cash; a few clicks of the mouse and their purchases are delivered to their doors, much quicker than a trip to the local shopping centre.
The rise of online presented a conundrum for the owners of retail property who at one time talked feverishly about the death of the physical store, but it’s a debate that is beginning to be turned on its head.
Online retailers have started opening bricks-and-mortar stores, to drive sales and create brand awareness for online operators who are struggling to make their voices heard in an increasingly noisy online marketplace.
Some say e-tailers can only grow so big before ‘physical’ shops are needed to aid expansion. Amazon’s activities would seem to prove the point; if the world’s largest ecommerce platform is opening stores, surely others will follow.
But industry experts will tell you in the same breath that online pure-play retailers will account for no more than 10% of total retail space in prime areas.
So while this new trend will be a boost, and a differentiator, for landlords of the best space, wide-scale migration is unlikely and it won’t be keenly felt by those whose assets languish at the lower end of the stock spectrum.
There has undoubtedly been a shift in strategy, but my feeling is that there will be a trickle of ‘online to offline’ deals, rather than a flood.
Nevertheless, the lines between shopping channels are blurring, and what can be seen with clarity is that there is room for both online and traditional retailers, now and in the future.
Mia Hunt is Property Week’s market reports editor
Retail, Leisure and Hotels supplement
Find out which are the best towns to invest in, why e-tailers are increasingly being driven to open physical stores and how Airbnb could spell heartbreak for hotels all in our new April supplement