The high street will change forever as the UK’s shoppers turn online in coming years, spending more than £37bn a year by 2014, a new report predicts.
Familiar names will disappear from the high street while the ecommerce market will grow by £14bn, or 61% on 2010 spending, over the next three years, according to Verdict Research.
Currently, says the analyst, online retail is growing six times faster than high street sales. Its Webloyalty Online Retail Report predicts the continuation of a trend that has seen more than 40,000 shops disappear from the high street in the last ten years. Traders will shut shop to focus on selling online and through m-commerce – and this will change the way the high street works, says Verdict.
Neil Saunders, of Verdict Research, said: “Shoppers need to prepare for a radical change on their local high street. By 2014, we predict the high street will become less about shopping and more about the experience. Apple is ahead of the game, where the stores have already become a destination rather than just a shop. You can look, touch and test the products, speak to experts and make your decision then buy online.”
The use of smartphones will become integral to this experience, says the report. At the moment, it says, 52% of UK consumers use their mobile during the purchasing process, but that will reach 80% in the next five years. It will become an “essential” part of shopping, said Saunders, used to make payment and to find products, the best deals and discounts.”
He said: “Retailers that survive on the high street will be those that combine their online stores will mobile apps that offer shopps a better deal using location-based offers.”
The Webloyalty report analysed the development of different retail sectors, and predicts that by 2014 some 40% of electricals and 80% of music, films and games will be bought online – making more high street spaces redundant.
“Shoppers are beginning to find it increasingly difficult to find their favourite CD, film or book on the high street,” said Saunders. He points out that HMV has said it will close 40 HMV and 20 Waterstones stores this year, as its shops have become “nothing more than costly overheads.”
More of those who keep their stores will move out of town, where rents are cheaper – forcing shoppers to follow them to retail parks, or shop online. The retail space that does remain, meanwhile, will become more efficient.
Martin Child, managing director, Europe, of Webloyalty, said: “Shoppers will be able to find the best deal – either online or using their mobile – and the onus is now on retailers to rethink their high street presence in order to remain competitive.
“Technology can improve the way customers interact in store. For instance, customers can check in with their mobile phones upon entering a store to receive on-the-spot discounts. But retailers can’t just rely on footfall any more – online is crucial for today’s success. Mobile is the secret for tomorrow.”