Emerging implications of online retailing for real estate

Abstract

Purpose – This paper aims to initially explore the effects of online retailing on corporate real estate strategies today, examining current trends and the approaches of leading edge retailers in this evolving marketplace. The UK has the greatest proportion of online sales worldwide. Design/methodology/approach – Context is provided through existing literature, and the methodology considers specific case studies. Information from financial reports, websites and evidence directly from retailers is derived to examine selected sectoral responses (food shopping, fashion retailing and department stores) to online shopping. The research considers the interface between the virtual and physical retail landscapes. Findings – The Internet is undeniably driving change, and large retailers have responded by embracing multi-channel sales strategies in which the adapted physical store remains a central element. Research limitations/implications – The case studies are arguably limited in their market assessment by examining only large retailers, but it is these retailers who occupy much of the real estate space in shopping centres. Data on Internet sales and retail space of individual retailers are not publicly available. This paper offers a qualitative introduction into ongoing research on the evolution of Internet retailing today. Practical implications – For large retailers, a multi-channel corporate sales strategy is enhanced by physical stores that can act as showrooms and collection points and enhance consumer service. Multiple retailers have a competitive advantage in the form of store networks and a recognisable brand that they can exploit to capture the sales opportunities the Internet offers. Originality/value – The paper is the first to collate and analyse corporate real estate strategic responses to online retailing.

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