Online shopping will account for at least a third of UK retail commerce by 2022, up from 13 per cent now, according to a new report.
The Economist Intelligence Unit’s Retail 2022 report examines how the retail landscape will change over the next 10 years.
Key points include:
• The report goes on to say that the high street will no longer be where transactions are primarily made
• Retailers will have to adapt with services like click and collect and expecting consumers to try in store before buying online
• Senior representatives from retail, banking, property and local government have come together to create a new task-force that has been set up following recommendations made in the Portas Review to revive high streets
In contrast to this, weakness in the UK market could see polarised shopping habits (when consumers purchase staples from discounters to fund luxury purchases) leading to an even greater squeeze on mid-market retail by 2022.
Jon Copestake, chief retail analyst, Economist Intelligence Unit and author of Retail 2022, said: “The opportunities for retail over the next decade and beyond are enormous. But where the future markets will reside and the way in which we will buy goods will change dramatically. Retailers will need to evolve to adapt to this new landscape.”
E-commerce, m-commerce (sales made via smartphones) and s-commerce (sales made through social media) will transform global retail and 2022 will see online purchases account for a third or more of sales in markets such as the UK, compared to around 10% now.
Mobile commerce will be a mainstream means of shopping by 2022, as more consumers make impulse purchases directly on mobile platforms. S-commerce, led by investment in traffic drivers such as Pinterest, will add a further dimension to virtual shopping.
By 2022, bargain-driven technologies such as Groupon and mysupermarket will have merged and expanded into sophisticated sites tailoring and personalising the best offers for consumers.
‘Bricks & Mortar’ will fight back as traditional retailers respond to change by integrating online with physical store offerings. Physical stores will not disappear by 2022, but they will play a very different role. Many shops may operate as little more than showrooms, collection centres or customer service hubs. Augmented reality displays will become the norm, driven by smartphone applications.
Convenience will be king as consumers take a multichannel approach rather than ‘one-stop shopping’. Convenience store penetration will rise further by 2022 as the balance between price and convenience shifts back towards the latter.
Adam Stewart, Marketing Director, Rakuten’s Play.com, comments: “It’s no surprise that the figures from the Economist Intelligence Unit show that online will continue to be a successful selling channel for retailers through to 2022. While the high street is vital to the retail ecosystem and will always have a place, it is retailers’ new approach to curating products online that will continue to fuel the growth in years ahead.
Retailers are increasingly creating richer online shopping experiences, with access to 360 degree product images, live video streams from the catwalk and out of the box video product testing that makes shopping online far more tactile.
The power of images in the e-tail environment is further supported by recent findings from the ‘Benchmarking the Digital High Street: UK Ecommerce Performance Index 2012’ which show that 62% of consumers see rich media as vital to their shopping experience.”
Global outlook
By 2022, the emerging countries of China, India, Russia and Brazil will have become four of the six largest retail markets in the world, according to a new report from the Economist Intelligence Unit.
The report, Retail 2022, predicts that the Chinese retail market will be worth $8.3tn by 2022, which is around a quarter of global retail sales and twice the size of the US at $4.5tn.
India will be next in line at almost $4tn, followed by Japan ($1.6tn), Russia ($1.5tn) and Brazil ($1.2tn). In 10 years, the Indian retail market alone could be the size of Western Europe’s.
Read the full report here (registration required)