Retailers Anticipate Consumer Shift and Return of Footfall
27 May 2023, Mumbai
CBRE's survey indicates that 42% of Asia Pacific retailers expect footfall in physical stores to rebound to pre-pandemic levels, while almost half foresee a portion of online spending transitioning back to brick-and-mortar retail. Meeting the diverse needs of hybrid shoppers who switch between online and offline channels is a significant challenge for retailers.
Rising Costs of Online Operations
Retailers face mounting expenses in operating online platforms due to factors like increased transportation costs, supply chain disruptions, labor shortages, and higher cost-per-click fees imposed by platforms such as Google. Consequently, 66% of retailers anticipate higher online operation costs in 2023.
Expansion of Physical Stores and Enhanced Shopping Experiences
Despite the challenges, 71% of retailers plan to expand or introduce new physical stores, underscoring the enduring importance of in-person retail. Preference for In-Store Product Viewing and Sales Network Optimization
The survey reveals that 61% of shoppers in the region prefer to see products in-store before making online purchases, influenced by the more compact living environment in the Asia Pacific.
Retail Investment Outlook and Challenges
Investment sentiment in the retail sector lags behind other sectors like offices and industrial markets. CBRE projects a mostly stagnant investment volume, citing uncertainties in financial markets and concerns about the banking sector. Hope for Improved Investment Sentiment
CBRE suggests that if interest rates peak as anticipated in the middle of the year, investment sentiment in the retail sector may improve.
