Showrooming or Norooming? eCommerce – the impact of on property June 2013 | Cordea Savills

Online purchasing behavior is expected to remain intact with economic recovery as eCommerce becomes a mainstream retail channel. High streets have been hit by the rise of e-commerce as online retailers have lower fixed cost than physical “bricks and mortar” retailers and consumers go for the lowest cost option. However, the pricing gap with multi-channel retailers continues to narrow.


• Online spending in the UK is ahead of Europe but Europe is following suit

• Squeezed budgets have altered consumer purchasing behavior

• Pricing pressures are particularly acute on third party brand retailers

• Retailers with strong own brands and control over distribution will have a greater control over pricing

• While stores remain a place where customers interact, retailers will be forced to reduce occupancy cost leading to portfolio rationalization

• There is a trend towards Showrooming, “Click and Collect” and mobile commerce

• New technologies will enhance the online shopping experience

• Winning retailers will invest heavily in multi-channel operations at the expense of physical retailers with geographic over-reach

• Winning assets will be in prime locations with destination stores or will be well located dominant schemes

• Poorly located assets or those in lower tier retail centers will be hardest hit

• Distribution - operators will continue to require large sheds for national and regional distribution hubs.

• Demand for smaller satellite distribution centers will support rents and positively impact property and land at the edge of major population centers where supply is tight.

• Re-letting risk for satellite sheds may be lower than for large centralized fulfillment centers. 

(This article features excerpts from the full report – please download it here)