E-Commerce Impact Means Securing the Best Deal on Retail Premises Matters More than Ever
According to the statistical consultancy Statista, 19% of UK retail sales in 2017 were online and the UK is second only to China in its preference for e-commerce. So where does that leave the High Street and the market for retail premises?
It’s certainly not all doom and gloom as fortunately many retailers embrace an omni-channel approach and offer a blend of online and offline. Shopping is still a sociable, leisure pastime and physical stores provide for instant gratification which even a one-hour delivery can’t quite compete with! It also allows for support services such as click and collect and returns.
Some brands that started life online are now starting to open physical stores to provide better customer support and promote brand loyalty.
Changing Shopping Habits
For the blended online/offline experience to work effectively, the location of retail premises is absolutely critical. Shopping habits are changing, and shopping is becoming more of a leisure experience. Without detailed knowledge of the local retail environment it’s hard to know whether a particular retail site would generate sufficient footfall of the right kind from passing trade.
If offering a click and collect service is part of the reason for maintaining a physical retail presence how easy would this be for customers to use? Is there parking nearby and can they linger long enough to be tempted by other in-store offers?
Customers are Looking for a Great Deal – And So Should You
The other significant effect of the growth of e-commerce is pressure on prices and margins. Consumers can find a good deal with a Google search and they don’t expect to pay more in store than online. There isn’t much fat in the modern retail business therefore controlling occupational costs is crucial.
A typical retail lease period is 7.1 years, therefore if you don’t secure the best deal, or lease a property in a poor location you may be saddled with the liability for some time. Your business needs to be lean and your retail lease isn’t something you can afford to get wrong.
Retail centres may have a range of vacant sites but there may be a good reason why they are vacant and knowing the history can be important. A commercial property agent will also look at the potential of available sites objectively and offer advice on appropriate market rent and other terms. Given the tight margins and rapidly changing retail landscape there’s enormous value in working with a specialist commercial property agent who understands the local market; who has a track record of helping retail businesses find the right premises and in helping them to negotiate the right terms.
Physical retailing has a future. For businesses who make smart decisions about where to locate and who can secure favourable terms on their lease there’s every reason to be optimistic. Often, it’s just a case of getting the right advice and professional support before you sign.
For more information or to talk to one of our retail property experts, contact us today on 0118 959 6144 or visit our website for more information.