A new age of retail has emerged over the last decade. This age is characterised by a richly textured digital landscape, buzzing with new technologies, devices and online communities which has gradually overshadowed analogue consumerism.
The report reveals that this growth will be powered by three primary factors: the changing demographic of the UK adult population, the development of faster, cheaper, in-home deliveries and fewer physical stores.
As the UK adult population evolves over the next decade the shopping habits of younger groups will become more dominant. Our research shows that 62% of 16-24 year olds (Gen Z) shop online at least every fortnight (compared with just 29% aged over 65 years), averaging around three online purchases per month. Millennials also spend the highest proportion online currently (22.1%), averaging £42.32 per online transaction and spending £110.45 online each month. Read more...
The top three factors that would accelerate online shopping for consumers are cheaper (47%) and faster (26%) delivery and easier returns (26%) all of which are key areas of investment for retailers looking to own more of the digital market. Again easier returns are more important for Gen Z (28%) and Millennials (30%) than any other age group highlighting their significance as dominant consumers in the future. In addition to this there is a rising trend of in-home deliveries (deliveries while homeowners are out) which is expected to grow. Read more...
There have been five consecutive years of net closures of retail stores and with dwindling levels of footfall across high streets, shopping centres and retail parks this trend seems set to continue. Indeed 10% of consumers say they will shop less in physical stores in next 12 months outweighing those who suggested they will shop more frequently in-store. With more consumers turning to online for even mundane purchases, demand for retail property is at its lowest since 2007 and the role of the store has become polarised with flagship 'destination' stores continuing to attract sustainable levels of footfall, while other secondary locations with dwindling levels of footfall remain under pressure. Read more...
"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."
There are also potential risks ahead for retailers that don't prioritise data security when embracing the new technologies needed to thrive in a digital future.
Over 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.
Consumers attitudes towards sharing data overwhelmingly showed they believe businesses benefit far more than consumers. In fact, two thirds thought companies benefit more from the sharing of data compared to just 8% of who thought consumers benefited the most. Only a quarter (26%) said there was an equal exchange of value. Financial rewards, free and discounted products rank most highly for consumers in terms of benefits they would still be willing to exchange their data for.
"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."