“Digitisation is Not the Cause but the Catalyst of Change”

The effects of online sales on urban spaces

Joachim Stumpf, managing director and shareholder of IPH Handelsimmobilien GmbH and of BBE Handelsberatung GmbH


Question: “Mr Stumpf, online sales are accelerating structural change in over-the-counter trade. This has been apparent for quite some time. Now a study by BBE Handelsberatung, elaboratum New Commerce Consulting and the German Institute for Urban Studies (Deutsches Institut für Urbanistik (DifU)) for the Federal Ministry for the Environment, the Protection of Nature, Construction and Reactor Safety, as well as the retailers’ association HDE Handelsverband Deutschland, reveals that the effects on inner city, district and local centres vary. To what extent?”

Stumpf: “The effects on urban spaces are multi-faceted and are developing with a greater impetus than we could have imagined 10 or 15 years ago. Polarisation between large and small locations and cities is increasing. Small cities and medium-sized cities with a low degree of retail centrality are under the most pressure. In these cities we are increasingly encountering empty premises in traditional shopping streets, ever-shortening occupancy cycles for commercial properties, a deterioration in infrastructure and the desolation of public spaces. The reason for this is their position, sandwiched between the big-city retail experience and small-town local shopping. Therefore, medium-sized cities are always less attractive, new concepts are not developed and shop vacancies are on the increase. Particularly adversely affected are local, owner-managed businesses. According to the study, almost a fifth of independent specialist stores in Germany are under threat of closure.”


Question: “What is happening in the top-seven cities? Do they automatically benefit from this trend?”

Stumpf: “In principle yes, but even there, individual microlocations have to be considered in detail. The inner cities of the major metropolises, with their differentiated and varied range of retail opportunities, will certainly continue to retain their profile as places to shop and experience into the future. These are the destination of global players where over-the-counter and digital concepts can be successfully combined. But that does affect demand for locations and space. Store-based businesses are being transformed into showrooms as information and technology minimise or replace retail space. However, on the edges of major cities we will, depending on local conditions, see changes similar to those witnessed in small and medium-sized towns, especially if retailers do not succeed in combining online and offline business intelligently.”


Question: “But the study also shows that not every small or medium-sized town is doomed. Despite online sales, they can remain a vital place for commerce. What does survival depend on?”

Stumpf: “Cities differ in how severely they are affected by the concentration of retail space. Individual fundamentals also play a major role, as the experts in various models have concluded. Therefore it can be seen that a mix of retail and social interaction as a basic characteristic of town life will not be replaceable in the foreseeable future. Therefore, towns with a distinct character have good prospects of being appreciated as attractive places of business into the future, including those that are not major cities.”

Lars Jähnichen

Tel: +49 89 55118-151
E-Mail: jaehnichen.iph@bbe.de