What: As IADS members know, online sales are not entirely decorrelated from their store network coverage.

Why it is important: There is some danger in considering that “the destination store” with only one flagship might be the future of department stores.

A study reported by ICSC CEO Tom McGee and discussed on Yahoo Finance reveals that physical stores significantly impact online sales. Opening a physical store can boost a retailer's digital sales by nearly 7%, while closing one leads to an average online sales drop of 11.5% in the surrounding area. This phenomenon, termed the "halo effect," demonstrates the synergy between online and physical retail spaces. Physical stores not only serve traditional shopping needs but also act as mini fulfillment centers supporting online sales. The study also found that younger consumers, despite their integration with technology, share a preference for physical shopping similar to baby boomers, valuing the in-store experience.

Online sales fall when a physical store closes: study