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New research reveals importance of physical stores to boost online sales

Tom Bottomley
15 July 2019

The latest research carried out by Consolidated Analysis Centers, Inc. (CACI), the consumer and location intelligence specialist, has revealed how bricks and mortar stores positively impact on online sales.

It says that 90% of all UK retail spend is influenced by a store, and what CACI terms the “halo effect” refers directly to the measurable impact that the presence of a physical store has on online sales. It also reveals the negative impact of closing stores on brands’ online businesses.

Online sales more than double within a store’s catchment, and retailers that do not maintain a bricks and mortar store in a catchment – alongside a transactional website – typically experience 50% lower online sales compared to those retailers that do have a physical presence.

Alex McCulloch, director of CACI Property Consulting Group, said: “The halo effect highlights two key points as the industry wrestles with how it evolves in the face of seismic shifts in consumer behaviour. Firstly, brands should carefully consider the unintended consequences of downsizing their portfolios. What might seem an effective way to reduce costs may also undermine the viability of the business due to the positive impact stores have on online sales.

“As importantly, the research also points to the need for landlords and brands to work together. Consumers move seamlessly from one channel to another, which means neither side has the upper hand. Both sides must recognise the importance of stores across a retailer’s wider business and both should unite in building a stronger, more relevant, and therefore more resilient, offer for consumers.”

By analysing data collected via a UK wide survey of over 2,500 consumers, CACI found sales are an average of 106% higher within a physical store’s catchment, with the impact even greater in the fashion (+127%), sportswear (+124%) and electronics (+154%) sectors. The sportswear figures also include the growing trend of athleisure wear.

Key to the enhanced performance is the role stores play in influencing purchasing decisions, with over 50% of online spend touching a physical store. This is achieved through click and collect, in-store ordering, or via the store’s role as a showroom to "try before you buy", with purchases made later online at the convenience of the consumer.

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