A new report has predicted up to 53% of retail sales will take place online within the next 10 years, as consumers shift from traditional ‘bricks and mortar’ shops in favour of online shopping.
According to the report, undertaken by law firm Womble Bond Dickinson, Gen Z and millennials will make up half the adult population by this time, with 62% of 16-24 year olds shopping online every fortnight.
One in 10 people questioned in the report revealed they plan to shop less in physical stores over the next year, and against a backdrop of five consecutive years of net closures of retail stores, this is a concerning figure for some. Womble Bond Dickinson forecasts that online sales will overtake store-based sales within 8-10 years.
The report proposes that cheaper, faster deliveries and easier returns are key factors in driving further online growth, with easier returns being more important for Gen Z (28%) and millennials (30%) than any other age group. Online sales and discounts also draw customers online, such as November’s Black Friday price reductions which saw consumers spend 73% more online than they did in the previous month.
A number of retailers in the bike industry are already adapting to the growing trend towards digital, with the likes of UK distributor, Madison, rolling out its freewheel programme to help retailers serve their customers online and folding bike brand, Brompton, offering point-of-purchase finance to its online customers.
Meanwhile, innovative technology, improved connectivity, new business models and generational shifts are all additional factors altering our current retail landscape, which in turn is creating significant challenges for the retail industry. According to the report, these factors clearly influence how shoppers now research, communicate, consume content and purchase products, and this explosion of consumer choice has ‘irreversibly’ changed the way we all shop.
Smartphones and devices have also had a hand in altering the way consumers shop. The research revealed that since the launch of the first iPhone in 2008, 62% of the time consumers spent online occurred on mobile devices with more than half of visits to retailer websites happening through smartphones.
The report revealed online retail has risen four-fold in the last 10 years to £70 billion, and now accounts for one in every five pounds (19.2%) spent in retail.
Falling numbers of physical outlets also means consumers are increasingly turning online, with the report stating a huge net closure of 7,550 retail units across the UK last year alone, and demand for retail space at its lowest since 2007. The report warns an acceleration in further store closures will eventually lead to a more ‘inconvenient experience’ for some groups of customers, with this frustration catalysing an increase in online shopping.
However there are ways in which independent retailers and shops can adapt to this shift to online, and perhaps even capitalise on it, according to Sales Trainer Colin Rees, who has written a series of articles on sales training for CIN. For advice on preparing for the, perhaps inevitable, online marketplace boom, this article from Rees asks what an owner-run bike shop can do about it?
Across the pond, Rick Vosper tackles the pros and cons of online click and collect trends stateside, internet-based used bikes sales, and expanding the service department, as he explores the big issues affecting the bicycle retail industry in the US.
Gavin Matthews, Head of Retail at Womble Bond Dickinson, summarised the reports findings: “Online retail is being driven on a pace due to a heady combination of factors; early adopters in the retail market who can flex and adapt their business models quickly will stand the best chance of success.
“With the world of retail going through such an unprecedented change and retailers more exposed than ever with the speed and power of social media, the stakes are high and getting it wrong is not an option.”