Market Report 2022

Retail - Colliers Market Report 2022

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Explosive growth in e-commerce The outbreak of COVID-19 served to amplify an already preva lent retail market trend, namely e-commerce, long ago named the number one threat to traditional brick-and-mortar shops. The cocktail of Danes confined to their homes and closed shops boosted online sales to an unprecedented high, in par ticular among the ranks of the elderly: Here the number of per sons shopping online rose by approx 21% in 2019-2021. As e-commerce is gaining momentum in Denmark, we are start ing to see a structural change, the permanent nature of which is posing a challenge to an already beleaguered retail market that, like the hotel segment, has been bearing the brunt of lock downs and absent tourists. There is no doubt that e-commerce is here to stay, and that the retail scene needs to acknowledge its existence and the convenient alternative it offers consumers. The question is therefore how big a share of retail sales e-com merce may account for before reaching a natural saturation

point, with a more stable balance between “in real life” shop ping and e-commerce.

However, the pandemic has also forced the industry to come up with innovative and creative solutions to retain the footfall in physical shops. In today’s market, the interaction between the physical shop and a well-functioning website is more important than ever. In recent years, especially during the COVID-19 pandemic, we have seen a slight increase in the proportion of businesses that also have an online store. Another trend is that businesses with an online platform enable click & collect arrangements, intended to lure the consumer from an initial online purchase into the physical shops to collect, for the purpose of generat ing additional sales here. The interaction between online and “real life” retailing means that brick-and-mortar shops increas ingly serve as stocks close to the consumer and less as the pri mary sales channel.