Online shopping could account for as much as 50% of UK within the next ten years, a new report has found.
The findings come in a new report produced by Retail Economics and commissioned by law firm Womble Bond Dickinson (WBD), which says that the changing demographic of the UK population, coupled with faster delivery times, will lead to a rapid escalation in online shopping in the years to come.
Currently, online shopping (across all retail formats) accounts for 19% of sales, the study found.
It also suggested that there are potential risks on the horizon for retailers that don’t prioritise security when embracing the technologies needed to thrive in an increasingly digital future.
Generation Z
The study found that the shopping habits of younger consumers are likely to shape the retail landscape in the near future, as Generation Z and Millennials become increasingly influential members of the shopper base.
Some 62% of 16-24 year olds (Generation Z) shop online at least every fortnight, compared with just 29% of those aged over 65 years, the study found.
Generation Z shoppers are also more likely to be impacted by the marketing they view on their smartphone, with 53% of this demographic saying they were most influenced by mobile advertising, compared to just 3% of those aged over 65.
At the same time, however, almost a quarter of Generation Z consumers said they are more likely to shop in high streets and shopping centres, meaning that traditional retail channels will remain important.
In addition, millennials spend the highest proportion online out of any demographic (22.1%), averaging £42.32 per online transaction and spending £110.45 online each month.
Generation Z and Millennials will account for over half of the adult population by 2028, compared to 39% in 2019.
Delivery Demands
According to the study, the top three factors that would likely accelerate the adoption of online shopping for consumers include cheaper (47%) and faster (26%) delivery and easier returns (26%).
Ease of returns is of significant importance for Generation Z (28%) and millennial (30%) shoppers; more so than any other age group.
The study also found that 10% of shoppers say they will likely shop less in physical stores in the next 12 months, outweighing those that said that they plan to shop more frequently in store.
At the same time, shoppers are increasingly aware about the amount of data they share with firms. More a quarter of respondents have taken some action to limit the amount of data shared with companies, reaching almost a third for 16-24 year olds, the study found.
‘Unprecedented Change’
"It’s no exaggeration to say that the retail industry is undergoing a period of unprecedented change,” commented Richard Lim of Retail Economics. “Despite concurrent waves of political and economic upheaval in our midst, our work with retailers suggests this is a mere distraction from the seismic structural shifts reshaping the retail landscape."
Lim added that while successful retailers have always had to “reinvent themselves” to stay relevant, “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,” he added.
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
