The UK has been ranked as the world’s most developed online retail market and landlords and developers must adapt to this new world, says Cushman & Wakefield (C&W).
The warning follows a comprehensive analysis of online retailing carried out by the property firm which places the UK marginally ahead of the US due to sales per capita.
Global online retailing has been growing at a rate of 18 per cent per year over the past three years and is changing the landscape of the market as retailer’s property requirements shift in response to the challenge.
This response varies from market to market depending on economic, cultural, regulatory and infrastructure factors but it is something C&W’s Matt Winn believes the property industry must consider as retailers seek to align their platforms.
“Some retailers are going for fewer but larger stores, others for smaller but more stores; there is, as yet, no right or wrong answer on issues like store and network size.
“However, we know stores will change and evolve as retailers experiment with omni-channel retail – and landlords and developers must be ready to adapt,” he said.
In the US, Congress is currently considering the Marketplace Fairness Act which will enable states to collect taxes from online retailers and a similar proposal is being discussed in the UK. Bricks and mortar based retailers believe these measures are necessary in order to address the disparity in taxation which leaves them at a disadvantage.
Despite these difficulties, and the forecast that high streets may contract further before a balance is reached, the report finds that physical stores will continue to be relevant. In this respect C&W believes that the importance of flagship stores will grow and location will become an increasingly crucial factor.
In prime locations, which provide the retail experience and leisure facilities that today’s consumer demands, rents will rise but in less in-demand locations rents will continue to fall, the report predicts.
C&W also highlights the potential for growth in large regional shopping centres, in-town developments and malls but, here too, retailers will need to adapt in order to establish themselves as a part of the ‘e-tail infrastructure platform.’
