More online retailers are opening physical "showrooms"

A growing number of pureplay etailers are establishing offline stores, or "showrooms", as the rate of growth in e-commerce is expected to slow in the coming years.

According to new research from global real estate advisers Colliers International, by 2021 the rate of growth in e-commerce sales is expected to decline from the current level of around 11% to 7%. As such etailers are increasingly moving into "showrooming", which is the term Colliers has coined for the online retailers' stores as the primary purpose of them is not necessarily to generate in-store sales but increase loyalty and encourage more spending online.

In Colliers' research it has analysed 30 online brands across the EMEA region who are becoming "showroomers", one of which is French fashion brand Sézane, which began life as an eBay store before becoming a fully fledged etailer. It has now opened physical stores in Paris and New York and is currently running a pop-up on London's South Molton Street to test the UK market.

Sezane: testing UK market with pop-up on South Molton Street

In addition British fashion brand, ME+EM, is about to open its third store and is exploring the potential for more. And the showrooming trend is being augmented by brands such as Samsung, Dyson and Volkswagen which previously sold through stockists but are now looking to go direct to the customer.

Colliers International Co-Head EMEA Retail Paul Souber said: “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.

“Increasingly ‘showrooms’ in physical shopping environments which both generate online sales, raise awareness of their company, promote brand loyalty and offer the customer an opportunity to see, touch and feel the products.

“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.”

Colliers also notes that the trend works well for both landlords and brands since the spaces taken for showrooms is often not in a prime location and would not appeal to mainstream brands. “The landlord is letting a property which may have been problematic or not in demand and the pure-play is getting a lower rent than they would pay for a mainstream store," explained Co-Head EMEA Retail Etienne van Unen.