Omni-Channel Retailing Scores Higher Than Online Only Retailing
A recent US study by ICSC called The Halo Effect III examined store and online sales for 69 retailers and 2,103 individual stores. The findings are impressive.
Opening a store boosts online sales by 6.9% in the surrounding area in the first few weeks following the opening. For direct-to-consumer brands opening a store the impact is higher at 13.9%. Conversely, closing stores causes an 11.5% drop in sales in the relevant area.
Opening a store provides several omni-channel possibilities, such as order online, collect from or fulfil from store. These options are mostly more profitable, than order online and deliver to the customers home by a significant margin. Returning online orders to stores also gives staff a chance to sell an alternative product, and potentially accessories to items they collect too.
New store space or re-configurations also provides opportunities to have a larger assortment in less square footage with a different balance between selling and stockroom space. Floorspace may be reserved for display items only. Stockrooms can use cube more efficiently than selling space.
Stores account for 70% to 80% of retail sales and while online share may grow a few percentage points in the next several years, it is still likely that stores will dominate retail sales, they may just operate in smarter ways.
If you or your company has a subscription to our retail and consumer goods industry WIKI, visit these links for more information on how to get smarter with omni-channel retailing:
Omni-Channel Retailing is Growing Rapidly-
Posted by Brian Hume
12th April 2024
