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RPA - The iGeneration IV

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We are proud to have sponsored RPA's retail report which highlights Europe’s top 100 retailers and their real estate strategies.

Executive summary

An omni-channel environment has created a literal world of opportunity for some retailers and has signalled the demise or downsizing of others. Understanding and responding to the change in retail real estate requirements requires immediate action, a rewriting of the rule books and an ability to be flexible.

In producing our fourth report on the dominant retail and real estate topic of recent times, Retail Property Analyst continues to be unique as a publication positioned to consider the impact of omni-channel developments on property requirements. In each year of publication, these impacts have changed and the focus on retailing and property has altered, often quite dramatically. This illustrates the fast-paced nature of the sector and also the fact that even those at the cutting-edge continue
to find their way against an ever-changing backdrop.

The property industry had still been guilty of largely ignoring the issue when we began these reports – with some commendable exceptions among developers and investors – and a pervasive view has taken hold that somehow retail units and requirements would be left unchanged by the revolution of e-commerce, the proliferation of mobile-technology and the explosion in the power and ubiquity of social media. This view no longer holds sway, although it is notable that even now the conversations had by retailers on the subject and those had at property networking events differ markedly, with real estate behind on the curve. Issues seen as key by many retailers are being overlooked by too many landlords. A disconnect remains, which we hope this report plays its own small part in narrowing.

Our exclusive analysis of the top 100 retailers operating in Europe, selected by a mix of annual turnover, influence and local or international significance shows a diverse picture of evolution, development and strategy. It also reveals threats to real estate through a downscaling of retail requirements – estimated by one specialist, Javelin, as a 25% reduction by 2020 – and of opportunities created through remodelling and the mobile revolution. An alternative school of thought is also emerging, suggesting that much of the online gains in areas such as technological products and catalogue-style merchandise have now been gleaned and that growth will not continue at the same level, but rather that online sales will cannibalise store sales.

Perhaps the most telling testament to the pace of change in this industry is that a number of the businesses in the top 100 have changed ownership or even, in one case, gone into bankruptcy. A number of chief executives have been ousted and some major strategy changes have occurred. In all cases, the pledge to e-commerce has become stronger. There can be few, if any, sectors in any global industry where such rapid changes occur on a day-by-day basis.

Consumers are now interacting with the multiple channels in an ad hoc manner. An increasing number of consumers are researching products in bricks-and-mortar retail stores before purchasing online, using click-and-collect or showrooming, a subject this report looks at in some detail although it has become less of a topic than it was in 2013. How the consumer touches the retailer or the brand differs by person, time of day, location and mood. It is why multi has become omni – the channels can no longer be treated as a series of silos, they are integrated, blended and potentially revenue capturing for those who can bring each of their channels under a clear, consistent and relevant banner.

This report considers both the technological and cultural trends but also then examines how these translate across 100 top European active retailers. The analysis considers what the retailers are doing, how they are doing it and how it is impacting their real estate strategies.

A number of clear trends have emerged compared with last year, notably the ongoing and now relatively long running rise in mobile-based retailing, the surge in international delivery, the strengthening of the third party delivery relationships and the downscaling in store numbers among a number of retailers, notably in the fashion sector. Click and collect has also become a vital component of location planning and few of the retailers in our listing do not offer such a service. Increasingly, landlords are also looking to such centralised services.


Download the report here

Alice Breheny

Alice Breheny

Global Head of Research

Alice's biography