Half of UK retail sales will be online within 10 years, report predicts
Online shopping could more than double its share of the retail market by 2028, according to a report that spells further difficulties for landlords, stores and communities.
The internet is expected to account for 53% of retail sales in 10 years’ time, up from about a fifth at present, as younger people who have grown up with the internet become more than half the UK’s adult population, according to a report by the analysts Retail Economics for the law firm Womble Bond Dickinson.
One in 10 people of all ages questioned for the report said they planned to shop more online in the year ahead.
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.
The research is likely to fuel calls for action to protect communities and help to reinvent town centres after a wave of store closures.
Debenhams, Marks & Spencer and the Topshop owner Arcadia have all announced plans to close stores in the year ahead. Last month Bathstore became the latest of a string of high street retailers to go into administration under pressure from growing competition online.
Landlords are being asked to slash rents and the government urged to take action on business rates, which are based on property and so hinder retailers with a physical presence. The British Retail Consortium says retail conditions are the toughest in a decade.
“The industry is undergoing a painful readjustment period,” Lim said. “The acceleration of further store closures will eventually lead to a more ‘inconvenient’ experience for some groups of consumers across many parts of the UK. Inevitably, this frustration will be a catalyst for further online shopping with consumers turning to online as an alternative to in-store purchases.”
The differing behaviour of younger generations poses particular threats for certain kinds of shop. People aged between 25 and 44 are far more likely to buy clothing, books, electrical goods or food online than those over 55, for example, according to the research.
But it may not all be plain sailing for online businesses. The research also found that people were increasingly questioning whether they benefited from giving corporate entities access to their personal information. More than a quarter of respondents said they had taken some action to limit the amount of data shared with companies, rising to almost a third among 16- to 24-yearolds.