Omnichannel retail way forward for Europe
With 20-25% retail spend set to be generated online, retailers across Europe need to start future proofing their businesses in order to remain competitive and profitable in the next decade, according to a new report.
The Megatrends report by real estate advisor Savills states that nearly 60% of EU internet users now shop online and in ten years time 20-25% of all retail spend is expected to be generated online.
However, the report forecasts that the store will be as relevant as ever in the next decade as people of all ages become ‘omni-consumers’ switching back and forth between the online and offline world.
The report predicts that high streets will continue to be a magnet for social interaction with consumers still desiring the ‘physical destination’ experience of a shopping trip. Therefore, enhancing the in-store customer experience will be an increasingly essential element in capturing the imagination of the modern consumer.
“Stores will become a ‘walk-in-web-store’, with their purpose not being to ‘sell’ products but to offer solutions, service or an engaging experience,” added Mitsostergiou.
Savills suggests that big data and technologies such as near-field communication, geofencing and facial recognition will soon enable retailers to offer real-time micro-personalisation in stores, tailoring the product offer and retailing experience to purchase history, social media or even the consumer’s current mood.
Larry Brennan, director of European retail at Savills, said: “The evolving retail world will create new challenges. Retailers and logistics providers will have to be capable of managing much more complex order and distribution channels. For parts of Europe that are remote, under developed, or where internet usage is in its infancy, this will be particularly difficult.”
Savills says the proliferation of omni-channel retailing across Europe is set to have a positive impact on the retail and distribution sector. According to the EC, employment is forecast to grow by 6.2% by 2025, almost double the rate of all other sectors.
“This is a pivotal time for the industry,” added Brennan. “Not all types of retail space in Europe will survive the changes in the sector but businesses must now streamline their marketing strategies in line with tech innovation and changing consumer demand in order to stay profitable and expand over the next 20 years.”
“Eri Mitsostergiou, director of European research at Savills, explained: It is now imperative for businesses to cater to the principles and lifestyle of both the rapidly growing ageing population and the dynamic young consumer. We have seen how the most successful retailers in Europe have kept in step with these cultural changes, and have merged the digital and physical models of their businesses in an integrated channel.”