Online shopping is set to account for more than half of retail sales in the next decade, new research suggests.
The Digital Tipping Point 2019 report forecast that online retail sales will reach 53% of all sales by 2028 – up from 19% currently – and will be powered by the changing demographic of the UK adult population, the development of faster, cheaper, in-home deliveries and fewer physical stores.
The report, commissioned by law firm Womble Bond Dickinson and conducted by Retail Economics, revealed that almost two-thirds (62%) of 16 to 24-year-olds shop online at least every fortnight, compared with just 29% of those aged over 65, while 10% of all consumers said they would shop less in physical stores in the next 12 months.
Retail Economics chief executive Richard Lim said: “It’s no exaggeration to say that the retail industry is undergoing a period of unprecedented change. Despite concurrent waves of political and economic upheaval in our midst, our work with retailers suggest this is a mere distraction from the seismic structural shifts reshaping the retail landscape.
“Successful retailers have always had to reinvent themselves to stay relevant. However, 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.”
According to the report, the top three factors that would accelerate online shopping for consumers were cheaper (47%) and faster (26%) delivery and easier returns (26%).
Womble Bond Dickinson head of retail Gavin Matthews said: “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. However, as retailers leverage new technologies to support this growth, new risks also emerge.
“Consumers are increasingly conscious of the need to protect personal data and their privacy in order to reduce the risk of fraud, identity theft and misuse of their data. Real damage can be done to a retailer’s brand and reputation with any data breach and loss of trust can have far reaching consequences for any business and its bottom line.”