Local shops are still top choice for consumers despite online and out-of-town competition. In smaller towns people do their shopping in small shops rather then big centers.
Online shopping will kill local shops. That was the popular slogan of marketing experts 10 years ago. Now „neighborhood” centers and specialty shops are still alive – and some of these experts admit they were wrong. Town center managers should go back to basics to meet consumer demand as most Europeans still prefer to visit their local shops and town centers rather than buy products online or shop at out-of-town retail venues.
At a time when there is an unprecedented level of consumer access to the internet across Europe, consultancy firm CBRE has completed the most comprehensive and most far-reaching study of its kind, canvassing the opinions of more than 10,000 shoppers across Europe to discover how and where they shop.
Yes, even in Hungary, we shop air tickets, books and even grocery products online much more then before, but the majority of us do not intend to radically change shopping habits in the coming years. Despite competition from online and out-of-town shopping, town centers and the high street continue to be the preferred option. As a result, the pace of change of retail fundamentals is relatively slow with the physical store continuing to play a key role in the new, multichannel world.
According to CBRE's survey, two thirds of consumers said that the price of goods, cleanliness, security and convenient access were the most important factors when choosing where to shop. Entertainment and leisure were also deemed important by a third of those surveyed and by more than half of the younger age group. Local shops and town centers are visited most frequently for clothing shopping:. 78% of Europeans choose to shop for fashion goods in town centers, rising to approximately 90% among those living in Western Europe.
The range of retailers and, in particular, the size of their stores and variety of goods were high up the list of consumers’ priorities. Online retailing complements in-store retailing. When buying online, 64% of consumers prefer home delivery, but 85% said it was important to have access to a physical store to view/touch clothes before buying online. This proportion is even higher in Eastern European countries like Hungary or Poland.
Digital tools have yet to fully take hold. For example, fewer than one third of consumers in Europe have ever compared prices on their mobiles in-store or used QR codes to access websites; however, usage will increase in the future given the higher take-up today among 16 to 34 year olds.
“Convenience is still the consumer’s watchword; people like to shop locally and they want their shopping destinations to be easily accessible by car and offer free parking. Out-of-town centers usually offer free parking, but town center shopping facilities normally charge, putting themselves at a distinct disadvantage. Our advice to town center managers, shopping centers and retail investors is listen to what consumers want, concentrate on getting the basics right, and this will ultimately give you the best chance of success.” – summarized Peter Gold, Head of Cross Border EMEA Retail at CBRE.
The same values are important for Hungarian consumers as for the average European citizens: we prefer physical stores and appreciate security and convenient access to goods. The average Hungarian consumer basket is much more similar to the Polish or Russian one than to any Western European peer. The proportion spent on value clothing is very high In Hungary. Similarly to Poland or Russia, value retailers represent a very high (70%) of fashion exspenditure while only 36% in Italy.
Interestingly, share of mid-market spending came in the lowest in Hungary with only 9% of all fashion exspenditures. This share is up to over 40% in UK, Benelux and Spain. This statistic is a good reflection of the two-faced Hungarian retail market - added Gábor Borbély, Head of Research and Consultancy. The two extremes, value and luxury are the most important categories – although this latter accounts for a much smaller share (under 5%). Luxury spending is by definition no mass market – it is highest in Italy with 7% of all fashion exspenditure.”- added Borbély.
Rising online sales
On-line sales in Hungary are on rise but the multi channel retail is still very typical. 85% of those who shop on-line prefer home delivery. In France and the Nordics countries, 40% of the consumers are happy to pick up the goods in the physical stores or at the post office after ordering them on-line (multi channel retail). When buying online, Hungarian consumers act similarly to Germans or Polish and don’t combine the different retail channels. There is a 13% share of consumers who rely on on-line shopping only (and never visit the physical store). This is higher than in Poland or Spain but below the 23%, a ratio measured in Germany and Sweden.
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