DUBAI – Multichannel will complement, not compete with ‘bricks and mortar' retailing over the next two years and will drive increased traffic to stores say international retailers, according to a ground-breaking new study by CBRE. Investment in new and existing stores is also the number one priority for international retailers over the next two years, with the majority requiring a greater number of stores and increased shop space because of their multichannel strategy. Commenting on the study from a Middle East perspective, Mat Green, Head of Research & Consultancy UAE, CBRE Middle East, said: “In the Middle East participation in multichannel retailing is still in its infancy with consumers immersed in an established mall culture that has become a focal point for everyday life and an avenue for social interaction amongst the region's growing youth population. To be successful online retailers will have to become more creative in their offer in order to entice shoppers away from organized formats. The vast majority of shopping in the region is currently undertaken within physical stores, particularly for items such as high fashion products where consumers remain apprehensive towards fully embracing multichannel shopping technologies. However, while some luxury goods items may be struggling to change consumer habits, there has been notable growth in participation levels for web based auction sites, group discount sites and flight and hotel bookings engines." Peter Gold, Head of Cross Border Retail EMEA, CBRE, said: “Our message to the retail and real estate industry is don't panic. Consumer-driven technology continues to advance and contrary to widely held assumptions multichannel retailing is actually complementing not competing with existing store networks. In reality, multichannel is encouraging shoppers to visit stores and is driving additional business to retailers – the overall retail pie is getting bigger and it is critical for retailers and landlords alike to embrace multichannel, understand that it does not have to be expensive, and secure a greater slice of the market." “The future is a function of the past. While some sectors, such as Books or CDs, have suffered, shopping will continue to be a social experience - store portfolios are not about to shrink. The fundamentals of good retail management remain, but ultimately it is the retailers with strong brands and who understand their engagement with customers that will succeed. The old adage ‘location, location, location' remains paramount, but ‘consumer, consumer, consumer' is an equally important message to retailers in today's multichannel age," he added. Multichannel retailing allows the consumer to transact via a variety of connected channels such as in-store, online over a computer, and via a mobile site or ‘app'. In Europe and the US, this is revolutionizing the way that consumers shop, raising concerns among governments, local planners and shopping center owners over the future demand and provision of real estate for retail use. “The Role of Real Estate in the Multichannel World"identifies retailers' current strategies for multichannel and how they see this developing in two years' time. Launched recently at the World Retail Congress in London, CBRE highlighted, among others, that While investment in multichannel is important, investment in new and existing stores remains the number one priority for retailers Today, the majority of retailers (70 percent) see themselves primarily as “bricks and mortar" retailers; however, in two years' time a similar majority (63 percent) will have converted into fully integrated multichannel businesses On average, retailers said that their online sales today represent 5 percent of their total; in two years' they estimate this will nearly double to 10 percent Social networking and investment in mobile-commerce are considered secondary issues. – SG/QJM
