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Online retailers go in search of physical stores

By Greg Bell

Online retailers are still finding value in setting up physical stores, as there's been a rise in the number of companies seeking new premises. This is according to the Commonwealth Bank Retail Insights Report, which found that 18 per cent of online-only retailers are planning on securing themselves premises over the next 12 months.

This marks a 5 per cent rise from the previous half-yearly report, indicating that more than three-quarters of companies will soon have some sort of physical presence. This bodes well for buying commercial property on the Gold Coast, as businesses seek new opportunities to establish themselves outside of the digital domain.

Why online companies need a physical presence

Online retailing has gone from strength to strength over the past few years. The May 2016 Online Retail Sales Index from NAB shows that total sales increased 2 per cent in May, while annual growth stood at 13.2 per cent.

This has been necessary since the online marketplace has expanded at such a considerable rate over the past few years. Between 2011 and 2016, annual growth has registered at 14.6 per cent, IBISWorld revealed, generating revenue of around $16billion.

As online companies continue to increase in size, it makes sense for them to secure new premises and make themselves more visible to consumers. Commonwealth Bank pointed out that Amazon is just one example of a big-name retailer to have done this in the US, so it's perhaps logical to think that others will soon start to follow suit.

The digital era is far from over

It's important to remember that physical stores are supplementary to online efforts, not a replacement, Commonwealth Bank's national manager of retail Jerry Macey noted.

"Bricks and mortar and multi-channel retailers are doing more online as customer preferences evolve," he commented.

"At the same time, emboldened digital retailers are opening physical stores to complement and drive further online sales."

The bank forecasts that technology budgets will continue to rise over the coming year. A total of 45 per cent of retailers questioned said they would be investing more heavily in areas such as social media, e-commerce and loyalty programmes.

Key sectors benefit from online sales

There are certain sectors that are continuing to benefit from the online retailing trend, NAB revealed, with the main driver being fashion. The report showed that year-on-year growth registered at 21.1 per cent, up considerably from the 8.6 per cent registered in the previous month's index.

Games and toys were also popular items to buy online, as were goods from department and variety stores. In some cases, these companies will already have invested in retail leasing on the Gold Coast, while for other online-only stores, this might be something they consider in the future.

Commonwealth Bank discovered that purely online retailers are notably more optimistic than those that operate across several different channels. Almost half (46 per cent) said they expect conditions to improve, which compared to just 28 per cent among multi-channel businesses. 

Find your commercial property on the Gold Coast

If you're an online retailer who is hoping to secure yourself physical premises, look no further than Ray White Commercial. We have many years of experience finding companies their ideal commercial property on the Gold Coast – and yours could be next.

We offer commercial real estate across all the lucrative areas of the Gold Coast, including Broadbeach and Surfers Paradise. Feel free to get in touch to discuss your requirements and what you can expect from these different locations throughout Queensland.

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