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DES GB2013 E

1 Online retailing is and will remain the overwhelming megatrend dom- inating site development in retail. There is no disputing that the shrink- ing market share of physical retail could have a neg-ative impact on real estate and city centers. But what will the drivers behind this pro- cess be, and where will the limits lie? The rise in the market share of online retail is also being support-ed by technological developments and the popularity of smartphones. Whereas just under 6 million smartphones and tablet PCs were sold in Germany in 2009, the equiv- alent figure for 2012 was already over 20 million, with higher-perfor- mance devices and faster internet connec-tions boosting the appeal of mobile commerce even further. Physical retailers might not be able to prevent customers from taking advantage of in-store advice only to make their pur-chase online in the end, sometimes even while still in the store thanks to increasingly powerful mobile devices. Offline retailers need not yet fear their shops are becoming nothing more than showrooms, however. A Roland Berger/ECE study showed that sales volumes for which the groundwork is done online and the trans- actions take place in a physical store are ten times higher than in the reverse scenario. Nevertheless, it would not do to rely on this figure staying that way: it is expected that offline retailers will in future be used increasingly as sources of information, on which basis a transact tion will ultimately be made via an online channel. The market share of e-commerce is current-ly just under 10%, and forecasts suggest that this could double by 2020, although it will vary between different areas of retail. In light of the synergies available between online and offline business, existing pure players (e.g. eBay, Zalando, myMüsli, etc.) will look to create new physical models, generating demand for properties in prime, well-established locations, i.e. well-situated shopping centers. The main growth drivers behind online retailing are goods that con- sumers do not need to see, touch, try on or smell in order to test the quality. That is why online sellers of products such as appliances, con- sumer electronics and media devices (17%) have grown their market share in recent years, as have online book retailers (23%), although distance sales of books actually dipped slightly in 2013 for the first ARGUMENT 1: Online retailing will continue to grow at pace, but not all sectors will be equally affected time since the dawn of e-commerce. The fashion segment was whol- ly unaffected by e-commerce, and saw an 11% jump in online sales between 2011 and 2012. The market shares for products such as watches/jewellery and medication are still low, and in fact declining. Even food is proving surprisingly resistant to online distribution, de- spite viable attempts on the market by national chains. A Lührmann study (Retail Trend Ba-rometer 2014), which surveyed 2,200 execu- tives with responsibility for expansion at interna-tionally, nationally and regionally active companies, suggests that that will remain the case. In this environment, total offline retail sales are also holding steady and there is high consistency of demand, in part because Ger- many has survived the financial crisis relatively unscathed. That is one reason why the German market is continuing to attract a great deal of interest from foreign investors. Click & Collect: Customers go online for information, order online ... DEUTSCHEEUROSHOPANNUALREPORT2013/SHOPPING 046

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