In the increasingly omnichannel retail landscape, the online and offline strategies of retailers are very much interlinked. Stores in prominent locations not only provide an avenue for the collection of online sales through click-and-collect service but also help drive web traffic. This report utilizes online search volume data and CBRE’s proprietary information on retail store openings to provide an initial assessment of the impact of new store openings on online searches.
When a new store opens, it’s important to understand its impact on web searches to fully analyze the value of a physical store. Before a new store opens, there typically is a slow rise in consumer interest of the brand (Figure 1). This shows the growing importance of using an e-commerce platform as a testing ground for many new retail concepts. When a certain level of brand awareness has been attained through an online platform, opening a physical store is a strong strategy to capitalize and push interest.
In CBRE’s analysis of 109 retailers that entered a new market, the rapid rise in internet search volumes occurs roughly two months before the store opens. In the store’s opening month, search volumes quickly rise 90% to the search volume peak. Once the public relations interest and marketing campaigns have stopped, search volumes fall, but 12 months later online search volumes remain 38% higher than the pre-store-opening level.
Figure 1 – European Average Internet Search Volumes by New Store Opening
Source: CBRE / Google (2018)
This relationship between new store openings and online searches shows the importance of having a strong interconnected online and offline strategy. Further evidence highlights that, on average, 72% of all online purchases have been influenced by offline sources (Figure 2). While this includes everything from the recommendation of friends to television advertisements, physical shopping remains a large influence. Products with strong differentiation are most influenced by offline factors. Stores that provide these products benefit from having a physical location for customers to become acquainted with the brand and try products before making purchases.
Figure 2 - European 2018 Offline Influence on the Share of Online Sales
Source: Forrester Research (2018)
Based on this analysis, retailers shouldn’t consider retail as only a physical or an e-commerce offering but as an omnichannel strategy, where each channel impacts the other. The physical store should be a large part of this strategy due to its ability to inspire online sales through brand recognition and product experience. Retailers should be more astutely aware of this relationship and the importance of a brand’s store.