UK ‘most developed online retail market in the world’ – Cushman & Wakefield
According to new analysis from Cushman & Wakefield, the UK is the most developed online retail market in the world.
The firm’s ‘Global Perspective on Retail: Online Retailing’ report has calculated an index of online retail market development using factors such as online market share and growth, the quality of logistics, energy infrastructure and technology, internet and mobile use, online security, and credit card use.
With the UK at the top of a group of developed retail markets that includes the US, Germany, France, the Netherlands, South Korea, Japan and Switzerland, the inclusion of factors linked to technology and infrastructure seems to promote developed over developing markets. But Cushman & Wakefield points out that technological advances can take place quickly – more so than physical infrastructure – and so in fact “developing markets have the potential to jump ahead more rapidly than would otherwise be the case”. In particular, C&W thinks that m-commerce (mobile) could “significantly alter the balance of retail power”, probably in favour of Asian markets where mobile penetration is higher.
In terms of the implications for retail property, C&W notes that while some retailers are opting for a smaller number of larger stores in response to the rise of online retailing, others are seeking more but smaller stores. “Clearly there is as yet no right answer on the optimum store network, and needs will continue to evolve as retailers experiment – and landlords must adapt to that,” the firm says. While a contraction of the prime pitch is likely in many shopping centres, C&W says there is clearly a role for physical stores to play for brands, luxury goods and flagship stores, and that the value proposition of the best retail space will rise as a result.
The additional costs of online retailing will feed down to property, C&W says. Rents will rise for retail premises to let that are within in-demand locations, while declining for weaker locations that serve more as collection and storage nodes.
“Large regional shopping centres and core in-town markets have considerable potential to emerge as winners from multi-channel retailing. They tend to be areas of high traffic, with a confluence of transport links and parking, and are key hubs for consumers to meet, enjoy experiences and access supporting uses such as leisure and food,” the firm points out. And with managers able to offer new services such as delivery, C&W feels that shopping centres “should be a vital part of the e-tail infrastructure platform”.