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High street set to drive 89% of sales by 2020 as shopping evolves: study

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The role of the high street is set for a sea change as shopping evolves still further into a leisure activity, a new report predicts. By 2020, three quarters of us will go to the high street for inspiration in the future – influencing 89% of all retail sales by that date.


O2’s The Future of Retail report uses analysis from retail analyst Conlumino to calculate that a high street presence will influence retail sales worth as much as £338.5bn a year by 2020. Without stores, online sales would fall by as much as £52bn.

Today, says the report, 89.3% of sales – worth £278.5bn a year – take place in UK stores, while 10.7% (£33.4bn) take place online. But added to that, the value of the store is boosted by orders worth £0.2bn made over mobile devices from a store, the £6.2bn in click and collect orders picked up from a store, and the £12.3bn of online orders inspired in the store. That adds up to store-related sales worth £297.9bn.

By 2020, the 02 report predicts, stores will account for 78.7% of sales (£286.6bn) and online for 21.3% (£77.6bn). But the value of the store is boosted to £338.5bn a year when a forecast £3bn of mobile-in-store sales, £24.1bn of store as online inspiration and £24.8bn of store as click and collect point are added in.

Already, says the report, 85% of online shoppers return products to stores and 75% collect items they bought online from a local shop. The study predicts that by 2020 some 7% of all retail sales will be made through click and collect services. That’s 260% up on today. It also envisages a 1,000% boost to the number of people who shop on their mobile while they’re in a store. It also sees 51% going to shops for entertainment and 33% to eat out.

Stores, however, will have an important part to play in building a brand’s reputation, with consumers placing 30% more faith in those that have shops compared to those that trade online only. Some 77% of shoppers go to stores for advice.

All of this means, says 02, that retailers must reshape their stores, introducing more social spaces where visitors will come for events while also shopping at the same time. At the same time, they must integrate offline and online shopping in ways that might include enabling shoppers to broadcast their in-store experiences through social media.

Topshop , for example, created a virtual front row for Fashion Week 2014 in its Oxford Street store. Sir Philip Green, chief executive of its parent company, Arcadia Group , said of the initiative: “This season’s live stream in virtual reality takes the idea of the traditional fashion show to a new dimension, as we continually look for new ways to engage, excite and involve our customers.”

Meanwhile, online marketplace eBay is trialling click and collect services through branches of Argos . At the time, Devin Wenig, president of eBay marketplaces, said: “Traditional retail isn’t going away, it is transforming. Smart retailers are innovating, reimagining the store and what it means to shop.”

“Technology is breathing new life into the high street,” said Feilim Mackle, director of sales and service at O2. “With more and more people shopping on their smartphones and tablets, stores are no longer just about buying. They are becoming go-to destinations for social, inspiring and rewarding experiences that ultimately drive sales online.

“Retailers have to recognise that the high street store is here to stay but its role has fundamentally changed. As the distinction between digital and physical becomes increasingly outdated, the brands that truly embrace technology to create a seamless experience for all their customers, wherever they choose to shop, will ultimately win the greatest share of both sales and customer loyalty.”

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