Parts of this article originally appeared in RetailTechNews.
Shoppers around the world no longer simply go to the nearest store; they grab the nearest digital device. eMarketer projects that online retail sales will more than double between 2015 and 2019 and account for more than 12% of global sales by 2019.
Despite the common misconception that the rise of online retail is coming at the expense of sales in physical stores, new research reveals that the current retail ecosystem is allowing both to thrive in the UK.
According to research by the UK Office for National Statistics (ONS), published in September, both online and in-store sales are growing quickly.
Key findings from the report show that:
- To date in 2018, shoppers have spent about £366bn ($483.83B) on retail sales, 4.7% up on the previous year.
- During 2017, online-only sales grew by 15.9% to reach £59.8bn ($79.05B), while store sales were 2.3% ahead at £306bn ($404.51B).
- Shoppers still spent most of their money (82%) in stores.
- Most online spending took place not at multi-channel retailer websites, but with retailers that have no stores.
When compared to retail sales, food sales were 5.5% up on last year, and accounted for 5.5% of all retail spending on groceries.
Department store e-commerce sales grew by 26% on last year (+1.5% on the previous month) to account for over 18% of spending in the category; while sales at textiles, clothing, and food stores were 10% up on last year and accounted for 17% of sales in the category.
Household goods stores showed rapid growth of 27% in e-commerce sales – 10% up on last year – to reach 13% of all sales in the category. Retailers without stores – mostly pure-play retailers, but also market stalls and auctions – saw sales grow by 14% to reach 78% of spending in that category.
Experts Analyze ONS Findings
RetailTechNews spoke to retail leaders, including Wayne St. Amand, Nielsen Marketing Effectiveness, to find out more about what the results mean for the industry.
Wayne St. Amand says that consumer choice is driving this trend.
“While the ONS results show an increase in online sales, this is predominantly in the pure-play online domain, indicating spending habits are more nuanced than we think. Today’s consumers have more options over how they browse, research, and purchase products, often going back and forth between online and offline channels before making a transaction.
“In fact, these channels often complement each other – online channels bring speed and convenience and the ability to compare prices, while brick-and-mortar stores offer the ability to see, feel, touch, and try out items before purchase.
“In today’s omni-channel world, retailers must capitalise on the strengths of both online and physical stores in order to meet the changing demands of consumers.”
Ed Bussey, CEO, Quill:
“To protect their share of the online market, and compete effectively with continually emerging pureplays, multi-channel retailers must focus on delivering exceptional online experiences for their customers. This extends from the basics – intuitive, mobile-friendly website design and navigation, fast and accurate product search, smooth checkout processes, convenient delivery options – through to the often-overlooked, but crucial, website content that influences consumer decision-making immediately prior to purchase, such as product descriptions and buying guides.”
Tiffany Carpenter, head of customer intelligence, SAS UK & Ireland:
“By tapping into the data that customers give up online, retailers can understand their customers better: what they want, where they want it, what colour they want it in, and how many they want. This form of analytics allows the online environment to support stores, rather than taking business away from them.”
Richard Willis, VP innovation & growth, Aptos:
“Modern brick-and-mortar retailers are capitalising on the fact that, although e-commerce can deliver great customer experience through the wide range of choice and ease of sales, they can’t deliver an immersive physical experience. Consequently, we are seeing savvy retailers use their stores as experience centres, allowing customers to see and feel the merchandise firsthand and create a connection with the brand before making purchases.”
Michyl Culos, head of marketing communications, Mailjet:
“While it’s easy to assume personalisation means customising online communications to every single consumer, it is actually about personalising your content to broad categories like interests, behaviours, or other attributes that many people can have in common. Today, every business should be investing in their online presence and their own properties in this way.”
Read the complete interviews here.
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