The threat of online or e-commerce towards physical retail narrative has been discussed almost non-stop for over a decade and picked up even more pace during and after Covid-19. While the path of omnichannel has also been widely trodden, we haven’t seen much of the alternative theory, however: that online retailers might actually have a positive effect on the high street. But that might be changing…
Last month we completed a 10-year lease to one of the UK’s oldest and most respected home décor providers for a physical retail outlet at 187 King’s Road in Chelsea. Graham & Brown has taken a 1,102 sq ft retail store in a prime spot and is perhaps one of the most definitive examples of the “clicks to bricks” trend there is. For a fourth-generation family business that previously only traded online, this shift tells the story perfectly.
It follows our previous letting to Alo Yoga, also on the King’s Road, and also taking its first physical space in the UK having originally been an online-only retailer. More than ever, shoppers want an experience that is physical and sensory, while online retailers seek to showcase their products in this manner and develop further brand visibility at the same time. Whether the shopper buys in store or online is inconsequential. In fact, it could be suggested that shoppers do more research online but make their spending decisions in store once they’ve seen, felt and tested the product in person.
As Jonathan De Mello of JDM Retail tells us, in prime areas around London, New York and Paris, online brands are increasingly showrooming their products enabling them to reach a wider audience and raise consumer brand awareness. As a result, they are seeing a halo effect of up to double the spend in the store replicated online (often worth millions in revenue) as customers who have seen, touched and experienced the products in person return to buy online time and time again.
In Chelsea, Graham & Brown found a well-positioned home that allows many more people to recognise and understand the brand, known to customers for their bold and vibrant wallpaper designs, as well as offering paint, artwork, soft furnishings and textiles. These products are more than at home on the cool King’s Road, enticing new customers every day who are more likely to go home and continue their “window” shopping online.
In-store still leads sales figures
It’s not just trendy independents however, who are picking up the trend. Some of the larger global e-commerce retailers have opened stores across the UK in order to meet fulfilment orders too – increasing stock levels at these locations to support their own supply and logistics processes. In fact, there are actually a rather small amount of ‘pure play’ online retailers in the UK today, three of whom went into administration last year – among them one of the most high-profile designer fashion brands in Net A Porter.
“80% of the world’s shopping sales is projected to be from physical retail stores this year”
80% of the world’s shopping sales is projected to be from physical retail stores this year, showing that it can grow alongside digital channels harmoniously. If there’s another thing that Covid-19 showed us, it’s that humans have a deep-rooted need for connection, community and experience. Online retail may be fast and convenient but it’s not the answer to those wanting something more.
Back to pre-Covid footfall
In Chelsea, we have seen footfall grow year on year and back ahead of pre-Covid levels with spend rising alongside it. When the King’s Road reopened post-Covid, the area was thriving, and it stayed that way, which underpins this is a long-term trend not merely a support bounce-back.
Don’t get me wrong, physical retail is not without ongoing challenges, and there are many of them. Business rates, insurance premiums, rising staff costs, energy bills, MEES regulations and, for Chelsea in particular, the ongoing saga of VAT on international buyers are all alive and kicking.
But, despite all of that, online retailers are seeing that shoppers want them on the high street and are investing their time and money into making that happen. It can only be a good thing.