ICSC Research: New Store Openings Boost Online Sales 6.9%

Physical stores have a measurable effect on online sales, in a good way.
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New research from trade organization ICSC highlights the inextricable link between physical stores and online sales and the surprising fact that Gen Z are turning to physical retail at higher rates than their predecessors.   

The latest study shows that a new store opening boosts online sales in the trade area surrounding that store by an average of 6.9% in the immediate weeks following the opening; conversely, closing stores has an even greater negative impact on retailer performance, resulting in an 11.5% drop in sales on average.

“ICSC’s data has always shown that consumers prefer shopping in-store over other channels,” said Tom McGee, President and CEO of ICSC in a statement. “While our earlier research on the halo effect demonstrated how physical stores drive web traffic and brand awareness, our latest report dives deeper by analyzing actual spend data. The findings quantify just how important brick-and-mortar is to today’s omnichannel consumers and underscore what retail experts already knew — the core of the omnichannel experience is the retail store.”

For the third installment in its The Halo Effect research series, ICSC (formally known as the International Council of Shopping Centers) analyzed the in-store and online sales of 69 retailers and 2,103 individual stores. The study authors also reviewed nearly $850 billion in credit card transactions over a four-year period in order to explore the impact of physical stores on both emerging and established retailers in categories including apparel, big box specialty, cosmetics, department stores, discount department stores and home stores.


The findings show that across nearly all categories, online sales increased following the opening of a store and decreased when a store closed. Apparel, department stores, home goods and emerging DTC brands stand to benefit most from opening new stores. For established retailers, online basket sizes among shoppers in the area around new stores also increase from an average of $94 before an opening to an average of $104, and those numbers are even higher for emerging brands.

On the flip side, closing a location tends to impact home stores and department stores the most, with online sales declining an average of 32.2% and 26.1%, respectively – emphasizing the importance of a space where consumers can test, browse and shop for products in those categories.

In final piece of good news, the study also found that despite being the “digital native generation,” Gen Z is a driving force behind a revitalization of physical retail, with this cohort shopping more in-store than millennials and Gen X and at a similar rate to boomers.

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