Online shopping to account for at least a third of UK retail commerce by 2022
Because of the rise in internet commerce
London: Britain’s high streets will become little more than glorified showrooms because of the rise in internet commerce, according to new research.
Online shopping will account for at least a third of UK retail commerce by 2022, up from 13 per cent, and the high street will no longer be where transactions are primarily made, according to Economist Intelligence Unit forecasts.
“Shops would operate as little more than showrooms but will continue to act as a channel for consumers to see, touch and try out goods – even if they make purchases using other means,” said Jon Copestake, chief retail analyst at the EIU.
The consumer spending downturn and the growth in shopping online and at out-of-town retail parks have hit Britain’s high streets hard. Last month it was revealed that retail chains shut 20 stores a day in the first six months of this year.
The EIU said shops that survived would have to adapt to the trend of shoppers trying out products in-store only to buy them later online, often from another retailer.
One suggestion the Retail 2022 report makes is for stores to expand click-and-collect services so consumers can try out, pick up or return products bought online at their convenience rather than by post.
Some online retailers are making a foray into the high street. Ebay has trialled pop-up showrooms in shopping locations in the UK, while Amazon has set up “lockers” for click-and-collect customers.
“The ease of online shopping means the showroom function of bricks-and-mortar shops will become more focused on establishing brand visibility and a reputation for service than on generating in-store sales,” said the report.
The high street transition would occur as middle-market retailers were squeezed even more. UK shopping habits would polarise as consumers bought staples from discounters to fund luxury purchases.
“If people are polarising it’s a question of when it will stop,” said Copestake. “If consumer confidence improves, the middle retailers could still find themselves squeezed as consumers stay with supermarkets such as Aldi for basic foodstuffs and trade up for value-added goods at Waitrose.”
The report also forecast that China’s retail market would be double the size of the US’s in 10 years — equivalent to $8.3trillion in sales — driven by retail growth in its fast-growing cities.
Copestake said retail companies exposed to China should stick it out.