Analysts have reported on the booming etail sector, warning that physical retail stores need to keep up with their online rivals.
Accountancy firm BDO reports that online sales across the entire retail sector, excluding food, have been outpacing in-store growth for some time, and over the past two years has grown 27%.
Analysts at HSBC commented that online will be “the primary driver of like-for-like sales growth” in the future, confirming the structural shift away from high fixed cost bricks and mortar retailing.
HSBC has also revealed that high street footfall fell 7% on Boxing Day and 6% in the two days before Christmas.
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Shopping malls were the worst affected, and Intu – a FTSE-listed company which owns UK shopping centres – revealed an increased footfall of just 1.1% in over the festive period.
But is it all doom and gloom for physical stores?
Retail experts have spoken about the omnichannel approach for a while now. While it will work for some, it’s just not practical for a lot of independent retailers to try to compete online with the likes of Amazon, GAK, Gear4music and so on.
However, there is still a lot of value in the personalised experience and human contact that you can only get from being in a bricks and mortar store.
Anil Gandharve, associate vice president at Mindtree, believes that physical retail stores are able to improve high street footfall by taking a leaf out of online retailer’s books and making sure they’re using the right kind of retail technology.
“The growth of forward-thinking online-only retailers demonstrates the growing value that consumers place on personalisation. By developing targeted offices, promotions and services, digital retailers are clearly reaping the rewards from investment into smart technology such as Big Data and predictive analytics,” said Gandharve.
“Yet, benefiting from advanced technology needn’t be exclusive to simply online shopping. The great British high street still remains the hub and engine-room of many local communities – and bricks and mortar stores can too profit by taking a leaf out of online retailers’ books.
“Harnessing technology to analyse footfall and customer spending habits will enable them to tailor offers and services to customers, while providing the all-important human touch. By placing an onus on delivering a personalised experience for customers, the high street can make a strong comeback, boosting sales and footfall across the country.”