A new report suggests that online sales now account for the equivalent of over 60 million sq ft of physical retail space.
That’s according to professional services firm Deloitte, cited by silobreaker.com, which believes the growth of the internet shopping centre means that traditional brick-and-mortar stores could be suffering from poor sales volumes.
Described as the ‘barnacle’ effect, where shop numbers are emphasised instead of downgrading portfolios before it is too late, physical stores could be rendered ‘obsolete’ due to structural changes and digital innovations, cites myhermes1.co.uk.
Hugo Clark, director in Deloitte’s real estate team and author of the report, believes physical stores could be in jeopardy if they aren’t seen to be adapting.
He said: “Stores are now just one part of a larger, more connected customer experience and many retailers are struggling to define the relevance and future contribution of their physical space.
“Shops now represent a potentially clumsy, fixed point in an increasingly mobile world. In many cases, they are slow and costly to adapt, expensive to operate and difficult to relinquish once surplus to requirement,” he added.
As a result, the biggest challenge for retailers is adapting to the growing consumer demand for online payment services and ecommerce stores, as well as assessing the pace at which ‘new technologies are emerging’.
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