The continuing shift from store to online retailing is illustrated by two stories that have emerged in recent days. So far in 2020, almost 10,000 jobs in shops have already been lost, according to the Centre for Retail Research. Meanwhile a GlobalData study forecasts that as much as 19.8% of retailing will take place online by 2024. The latest ONS Retail Sales Report suggests that in December 2019, 19% of sales took place online.
That shift is being marked by huge job losses as thousands of shops close. The Centre for Retail Research has previously suggested that more than 17,000 shops will close during the course of this year, following the closure of more than 16,000 last year.
Stores that have closed so far this year have largely come as a result of announcements made last year – and now put into action following the end of the peak trading season. All of Mothercare’s 79 stores have closed after the business put its UK arm into administration last year, saying that its stores were no longer financially viable. Debenhams this month started to close stores as part of a CVA (company voluntary agreement) agreed last year.
The British Retail Consortium has said that last year was the weakest on record for the industry.
The Altus Group’s annual Commercial Retail Estate Innovation Report suggests that 5G may help to reverse the trend towards jobs closures. It surveyed 400 major property owners and investors with at least £200m in assets under management, and found that 66% saw cashier-less retail and 77% saw automated stock ordering as the leading benefits that 5G would bring. Super-fast connectivity will also allow retailers to improve the customer experience in store by improving the customer experience.
Scott Morey, an executive director at Altus Group, said: “5G presents a great opportunity for retailers to further improve the underlying performance of their physical stores by transforming the customer experience and shifting the role of their store personnel towards higher value tasks.” He added: “Shoppers fundamentally rely on stores during various stages of their shopping journey and 5G has the potential to further improve that interaction.”
The shift online
UK Online Retailing 2019-24, a report from data and analytics business GlobalData, draws on a survey of 10,000 online shoppers to suggest that 19.8% of retail spending will take place online within four years. Retailers selling clothing and footwear will continue to represent the largest sector, while the fastest growth will come in the grocery sector, the analyst suggests. Overall, the figures estimate a 30.4% growth in online spending over the next five years.
Sofie Willmott, lead retail analyst at GlobalData, said: “Clothing specialists continue to develop their online proposition with many players now offering easy-to-use credit options like Clearpay and Klarna’s buy now, pay later, driving online conversion and giving shoppers another reason to choose the online channel over stores.” She pointed to recent innovations including the launch fo Asos’ ‘see my fit’ augmented reality tool, that aims to cut returns by showing what an item of clothing would look like on different sized models.
The report predicts that food spending will rise online as shoppers look for convenient ways of buying and become more willing to buy over the internet, and as grocers improve fulfilment times.
“As growth in physical store sales continues to elude many retailers, particularly in non-food product sectors, investment should be focused online to ensure websites and fulfilment options are constantly improved, in order to remain competitive,” said Willmott.
Image: InternetRetailing Media/Paul Skeldon