Future growth of retail: from e-wallets to the toy market
Two studies out this week look at the future growth of retail. Here's what they said.
The UK will be the world's third biggest ecommerce market by 2021, after five years of near-10% annual growth, a Worldpay study suggests. In its annual Global Payments Report, the payments specialist found that UK ecommerce will be worth £203bn (US$268bn) by 2021, putting the country behind only China and the USA in terms of the value of ecommerce transactions – and representing compound annual growth of 9.7% in a market that already has near-universal smartphone and internet penetration.
Worldpay’s research examined the online shopping market in 36 countries across five continents and found that more traditional payment methods such as credit and debit cards are set to experience a steady decline over the next five years. By 2021 debit card payments are forecast to fall from 31% of the total ecommerce market to 26%, with credit cards and cash on delivery also in decline.
It predicts that e-wallets are set for strong growth and are set to eclipse debit cards and become the most popular payment method for online transactions, taking 34% of the market. This rapid growth will help fuel the mCommerce market, which is projected to rise at an annual average of 21% in the next five years, faster than China, the US and Japan.
Commenting, Dave Glaser, chief product officer, global ecom at Worldpay
, said: “The UK is a highly-developed ecommerce market, with a population of over 66m – 95% of whom have access to the internet. As a result, consumers are comfortable with making a wide variety of purchases online and via multiple devices and payment methods. The predicted rise in both ecommerce and mcommerce is a strong vote of confidence in the security and convenience of the UK’s digital payments infrastructure.
“UK consumers are among the world’s earliest adopters of new technologies, including new payment methods, so retailers need to stay on top of technological and regulatory developments. For example, mobile’s share of ecommerce is set to increase to nearly 50% in the next five years, while smartphones will outpace tablets in the same timeframe. Merchants should therefore invest in developing their own apps to build a seamless shopping and checkout experience for all users, across every device, and support the most popular payment methods.”
Global Data, meanwhile, concludes that the UK's toys and games market is set to move online fast in the next five years, new research suggests.
The sector will grow by 16.2% to reach a value of £4.9bn by 2022, of which 84.1% will come via ecommerce, with 43.4% of sales expected to be made online in 2022, it predicts in its report, The UK Toys & Games Market 2017-2022
. Global Data senior retail analyst Molly Johnson-Jones predicts that Amazon will overtake Argos to become the largest toy retailer in the UK in 2020. Already in 2017, 51.4% of toys and games shoppers visit Amazon.
“Amazon has managed to improve shopper loyalty with its Amazon Prime services, and impressive range of toys and games," said Johnson-Jones. "Prices on this year’s must-have toys are lower than its competitors, its range is unrivalled, and the convenience of its offering is market-leading."
She also predicts that electronic toys, and traditional toys will support strong market growth out to 2022. Electronic toys have 13.1% of the total toy market in 2022; and arts & crafts, construction toys, and board games will have 30.5% over the same period.
“Electronic toy growth is not changing the market yet, as older parents and grandparents still choose traditional toys over toys which bridge the interface between physical and digital play," said Johnson-Jones. "However, as millennials who grew up with digital entertainment start to have families, electronic toy sales will increase, and their simultaneous desire to do more ‘wholesome’ activities will mean that the strong growth of traditional toys will continue.”
But it's pocket money toys have that have seen the greatest amount of innovation in 2017 with best-sellers such as LOL Surprise Dolls and Hatchimal CollEggtibles.
Johnson-Jones said: “The UK has always been a highly playground trend driven market, but this year has seen unusually high levels of innovation in toys under £10. Now that children are driving a portion of sales growth in the toy market, it is more important than ever for bricks and mortar retailers to create an engaging and immersive environment for young toy shoppers."