Over Half of UK Shopping to be Online in 10 Years
More than half of all retail sales in the UK are expected to be made on online by 2028, according to Retail Economics.
The Digital Tipping Point report, made for law firm Womble Bond Dickinson, showed that analysts are predicting online shopping to account for 53% of all retail sales in the UK in 10 years’ time, more than double the current rate of 19.2%.
This is bad news for the high street, as many retailers have been struggling to keep shops open in recent months. Marks & Spencer, Debenhams and Topshop have all announced they will be closing stores within the next year.
The report said that one of the primary causes driving the growth in online sales is the increase in Generation Z and millennial shoppers. By 2029, theses generations that grew up with the internet will make up more than half of the UK population, compared to 39% now. Other factors behind the future growth in online shopping will be the ongoing development of new technology such as artificial intelligence, delivery automation and personalised marketing.
“It’s no exaggeration to say that the retail industry is undergoing a period of unprecedented change,” said Richard Lim, chief executive of Retail Economics. “Despite concurrent waves of political and economic upheaval in our midst, our work with retailers suggest this is a mere distraction from the seismic structural shifts reshaping the retail landscape.
“Successful retailers have always had to reinvent themselves to stay relevant. However, the pace of change will inevitably prove too fast for many – as shown by the number of CVAs hitting the headlines. While the impact of future technologies and consumer acceptance is highly uncertain, it definitely feels like the digital retail-revolution is only just getting started.”
However, the report also suggested that the growth of online shopping still faces some potential barriers. Young people especially are become increasingly concerned about online security and are wary about giving away their personal information. Over a quarter of people in the survey said they want to limit the information they share online, while a third of 16 to 24-year olds said the same.
“Online retail is being driven on apace due to a combination of factors and early adopters in the retail market who can flex and adapt their business models quickly will rise to the top,” said Gavin Matthews, head of retail at Womble Bond Dickinson. “However, as retailers leverage new technologies to support this growth, new risks also emerge.
“Consumers are increasingly conscious of the need to protect personal data and their privacy in order to reduce the risk of fraud, identity theft and misuse of their data. Real damage can be done to a retailer’s brand and reputation with any data breach and loss of trust can have far reaching consequences for any business and its bottom line.”
A separate report from the British Retail Consortium revealed that consumer spending in the UK in June was at its weakest in almost a quarter of a century. The annual growth rate of 0.6% and monthly sales fall of 1.3% were both the lowest figures recorded by the BRC since they began the survey in 1996.