ABSTRACT
In the last decade, the retail market and the way consumers are shopping has undergone a major transformation due to the rapid growth of e-commerce, which has been “stealing” sales and market share from the traditional in-store retailing. According to data provided by the U.S. Department of Commerce, the share of total retail sales that is captured by the internet increased from 2.9% in 2006 to 10.2% in the first quarter of 2019 (preliminary estimate). In some items like books and CDs the penetration of internet sales is very high. The rapid growth of online sales at the expense of physical store sales is likely to lead to a reduction in per capita retail space needs (Henderson Research, 2013). However, the magnitude of the negative effects of online retailing on demand for retail space in the long term is debatable, as recent trends point to the complementarity of the role of the two sales channels (electronic and physical space), which has led 244many companies to seek their seamless integration (referred to as omnichanneling) in terms of all aspects of the interface between the consumer and the retailer, such as available merchandise, pricing, promotions, marketing, and delivery (Piotrowitz and Cuthbertson, 2014; Hortacsu and Syverson, 2015).
