Social commerce set to expand as high street declines: research
One report, by retail analysts Conlumino for Webloyalty, predicts that 31% of High Street stores will close by 2020 as more people shop online. Some 85% of UK consumers aged 18 or over already shop on the internet, precipating the decline of the high street.
But as the high street shrinks, suggests the Conlumino report, social technologies will emerge. While, as yet, only 3.9% of consumers have bought through social media, and social media is thought to account for only 6.5% of direct and influenced online sales, this will rise, says Conlumino, as more retailers make their offers fully transactional on social media platforms.
For while actual transactions are low, the research argues that many consumers are already social shoppers. Some 69% of consumers are now members of social media websites and 49% have interacted with a retailer through social media.
The missing link, says Webloyalty managing director Guy Chiswick, is for retailers both to invest further in social media and incorporate it into their stores and online. Mobile technologies are also key, given that, predicts the report, mobile will play a part in a quarter of all purchases, through price checking or direct purchases.
“The emergence and adoption of new digital channels means that retailers need to incorporate social media and mobile technologies into their store and multichannel environments to actively engage and interact with their customers,” said Chiswick.
Neil Saunders of Conlumino added: “Social media will have a widening impact on the entire retail environment, with its role in the online shopping process growing in importance as the amount of data available on social media platforms enables experiences to be tailored specifically to the user’s interests and tastes.”
Research from Rakuten, also out this week, found that 45% of global consumers are actively recommending products on social media sites, with 36% of consumers doing so in the UK. The Rakuten E-commerce Index also found that Brits lead the world in online spending, parting with £1,088 on average per person each year.
The global online marketplace said that social platforms generated £1.8m of direct sales at its UK site, Play.com, in 2012. Over the last six months alone, it said, orders from social networks increased by 122%. Play.com marketing director Adam Stewart said the value social activity to retailers would also be boosted as more consumers log in using Facebook. He cited Gartner research that said half of information of new customers would come from such social network identities by the end of 2015.
“As an industry,” said Stewart, “we need to build consumer confidence in social shopping platforms, as well as allowing shoppers to easily share content through these channels.”
He added: “Whether online, on mobile, or in-store, consumers are coming to expect a high level of customer service and an integrated brand experience across all available channels. It’s no longer enough to merely have a website that compliments your brick-and-mortar presence, retailers must start to develop interactive experiences which merge physical and digital channels.”
A further report from the Local Data Company suggests a slightly different take on the future of the high street from that envisaged by Conlumino. PWC and the Local Data Company surveyed 500 town centres for the study, and found the major retail chains shut an average of 20 shops a day last year – suggesting that decline indicated by the Conlumino report.
However, the company also detects significant growth in independent shops. In a follow-up, it said it also found that as the major retailers exit the high street, independent shops are on the rise. More than 15,000 independent shops opened last year, boosting the total number of such shops by 2.4% in total. This, said Local Data Company director Matthew Hopkinson, “challenges the common view that independents are an endangered species being killed off by supermarkets and the internet.”