The retail sector has spent over a decade being framed as a contest between online and offline. Whilst that framing has been passé for some time, new buzzwords are emerging. "Phygital" retail, the seamless blending of digital and physical journeys, assumes the customer does not think in channels at all. They browse on an app, check local stock, reserve online, collect in store, return an online purchase at the till, and expect the experience to feel like one transaction. The store is therefore no longer simply a shop. It is part showroom, part collection point, part returns processor, part local fulfilment node and part marketing platform. Google Trends data backs this up with searches for the term up dramatically in 2026.

For the owners and developers of retail assets, this matters because it changes what the building has to do. Three implications in particular need to be considered by owners:

Power becomes a leasing issue. EV charging, electrification of heating, digital displays, kiosks, parcel lockers and tenant equipment all draw from the same incoming supply. Where capacity is constrained, owners need to be considering how supply can be improved.

Fit-out specifications shift. It is likely proportionally more back-of-house space will be required. Picked orders, returns, secure storage for goods awaiting collection, and dedicated collection zones near entrances all require separate space that needs to be delineated from the shop floor.

Car parks become operational space. Collection bays, lockers, ANPR, wayfinding, charging infrastructure and courier movements turn a passive amenity into active fulfilment infrastructure – with consequent implications for surfacing, drainage, lighting and lifecycle maintenance.

There are, however, practical constraints to implementation. Rising materials and labour costs continue to reinforce a preference for retrofitting and lighter-touch enhancement over wholesale redevelopment, while contractor and labour availability is already extending programmes. Meanwhile, UK out-of-town retail vacancy currently sits around 3.9%, meaning that units, as they are, remain in high demand from retailers. However, the asset management issue may rear its head sooner than we think. As retailers start to implement the use of AI within their own operations, the data silos that previously existed and were an impediment to Phygital retail will slowly start to come down. This means owners and asset managers need to start thinking about what the impact of Phygital retail will be on the physical space that they own.

_{Read the articles within Savills Build: Perspective report below}