ICSC Study: ‘Halo Effect’ Drives Online Sales From New Stores

Arthur Zaczkiewicz

Updated Mon, October 15, 2018 at 11:00 AM UTC

When a retailer opens a new store, not only does brand awareness increase but so does online traffic, according to a report from the International Council of Shopping Centers (ICSC).

The study quantified what industry experts have said for some time: new store openings can cause a significant increase in a brand’s online traffic. The report revealed a new physical store “leads to a 37 percent average gain in overall traffic to a retailer’s web site and increases its share of web traffic within that market by an average of 27 percent,” authors of the report said. “The opposite is also true as web traffic tends to fall when stores close.”

Authors of the study, “The Halo Effect: How Bricks Impact Clicks,” said that the halo effect, which is commonly defined as “the tendency for an impression created in one area to influence another,” is “radically transforming how retailers do business and innovate.” The 24-page report, released today, shows how physical stores “impact a brand’s digital presence, why that relationship matters, and why physical stores are essential to any successful retail strategy.”

Tom McGee, president and chief executive officer of the ICSC, said the “clicks versus bricks debate is over. We have long suspected that there is a direct and positive correlation between having both a physical and a digital presence, and the Halo Effect study confirmed this.”

McGee noted that the industry is experiencing a “retail renaissance as both new and established retailers are investing in their stores and reinvigorating their physical presence.”

The analysis also showed changes in “customer perception” of a retail brand in markets where physical stores are opened. “Customers in markets where emerging retailers have stores tend to consider those brands 69 percent of the time, versus 51 percent in general,” the ICSC said in a statement.

McGee described physical stores as the “hub of customer experience and service” and shoppers want “to choose where and when they shop. Retailers that innovate and create a true omnichannel experience, leveraging the strengths of both physical and digital, will thrive.”

The ICSC researchers said in the report that physical stores serve as “billboards” for brands and companies can “use both these stores and online retail to drive traffic to each other.” The research showed that “when and where stores exist, consumers tend to use them: 84 percent of shoppers either shop exclusively in-store (53 percent) or in combination with online (31 percent),” authors of the report said.

Don't Miss

ICSC Study: ‘Halo Effect’ Drives Online Sales From New Stores

Recommended articles