CACI, the consumer and location intelligence specialist, launched a White Paper on the future of retail at the Revo Conference and Exhibition, held in Liverpool on September 18 and 19. The most significant finding of the White Paper is the unequivocal evidence that stores have a key role to play in driving significant incremental sales: for every £1 spent online outside a store’s catchment, £2.06 is spent online inside a store’s catchment. This is in addition to spend in the store itself.
The White Paper, which will be presented at the conference by Alex McCulloch, Director of CACI Property Consulting Group, is based on extensive research by CACI, considers the value of stores, drivers of change, and how the industry should respond. According to CACI’s research, the way consumers shop is driven by three factors:
With over 50% of the UK’s population under 38, Millennials are becoming families with less time and money to spend, but for whom technology is a natural part of their lives and behaviours. This is leading to a drop in footfall at retail and leisure destinations
Despite this, those that do shop in-store, particularly the young and the old, are engaged and happier with the experience. Average Net Promoter Scores, a measure of shopper satisfaction and enjoyment, have increased 30% across the industry over the last five years. Similarly, spend on catering as part of a shopping trip has also grown every year for the last five years
Institutions, such as the government, many landlords and retailers, are failing to understand the reality of how consumers are using stores. According to CACI’s research, the power now sits very firmly with consumers and institutions are playing catch-up
Commenting on the findings, Alex McCulloch, director of CACI Property Consulting Group, said: “Our White Paper provides firm evidence that landlords and retailers, together with the government and financial institutions, need to better understand the many roles stores play. Whilst their purpose varies by demographic and category, physical stores add significant value in the overall picture of consumer spend.
“The industry needs to listen to consumers, to trial new concepts, and to learn from what they discover. Consumers are in charge and the industry must inspire, engage and innovate much more widely, and effectively, than it currently is. Whilst bricks and mortar retail faces challenges, it is far from dead. Physical stores have a vital role to play in the future, but we all need to treat them differently, as well as the overall destination experience of which they are part.”
Ed Cooke, CEO of Revo, added:“CACI’s research provides further evidence to Revo’s long argued view that stores are key to the success of retail businesses. However, the industry must consider their form and function differently. It is incumbent on all of us in retail property to work together, to put consumers first and, where appropriate, to challenge legislators to better reflect in policy the reality of how consumers spend their time and money. We call on this government and the next to consider these findings in their plans for the future of the UK’s high streets.”
The White Paper is the latest in a series of industry insights published by CACI as it works with landlords, retailers and leisure operators to help them better understand changing consumer behaviour. The full white paper is available on the CACI website.