Online sales will overtake the high street in the next decade, expected to account for 53% of retail sales by 20208, according to new research.The research, from analyst firm Retail Economics on behalf of law firm Womble Bond Dickinson, found that one in 10 people of all ages questioned for the report said they planned to shop more online in the year ahead.
Online shopping currently accounts of 19 per cent of all sales but as the UK adult population evolves over the next decade the shopping habits of younger groups will become more dominant.
The research showed that 62 per cent of 16-24 year olds (Gen Z) shop online at least every fortnight, compared with just 29 per cent aged over 65.
Millennials also spend the highest proportion online, currently 22.1 per cent, averaging £42.32 per online transaction and spending £110.45 online each month.
More than half of Gen Z consumers said smartphones influenced them most in terms of ‘awareness’ of new retailers and brands. For those over 65 this statistic falls to just three per cent.
However almost a quarter of Gen Zs also said they are more likely to do shopping in high streets and shopping centres, highlighting the complexity of the customer journey and the importance of shopping experiences for these younger consumers.
Richard Lim, of Retail Economics, said: “Successful retailers have always had to reinvent themselves to stay relevant. However, the pace of change will inevitably prove too fast for many. It definitely feels like the digital retail revolution is only just getting started.”
Lim predicts that new and emerging technologies such as artificial intelligence that could enable the automation of delivery and personalised marketing will drive future online growth.
Commenting on the report findings, Grant Coleman, Executive Vice President EMEA at e-commerce experts Emarsys, said retailers must combine in-store and online experiences to achieve success.
“The balance of power is shifting, and e-commerce will become the predominant channel for retail spend,” Coleman said. “A significant reason for this is that convenience is the new normal for today’s connected shopper. They no longer see shopping as the sociable outing with friends it used to be.
“These days it’s far easier to click-and-collect, try clothes on at home, get a second opinion on your phone and send back for free if they’re not right. Consumers now expect an exceptional (and Instagram-worthy) experience before considering to a) leave the house and b) engage with retailers in person rather than opt for convenience and shop online.
“But for retailers to neglect the high-street would be a mistake. Apple was the first to understand how to use a physical space to inspire brand loyalty, and ecommerce-oriented firms like Amazon are realising the importance of building physical stores or pop-ups as a destination – which act as marketing tools as much as sales portals. Retailers need to acknowledge the shifting balance towards e-commerce, and create true omnichannel experiences that are punctuated by personalised, contextual digital content across both in-store and online shopping.”