More than half of retail sales will take place online in less than 10 years’ time, a new report has predicted, prompting further concern for landlords and struggling high streets.
Ecommerce is expected to account for 53% of retail sales by 2028, the report by analyst Retail Economics for law firm Womble Bond Dickinson suggests. This is more than double the 19.2% of sales that occur online at present.
The report, The Digital Tipping Point, found one of the main causes of this shift in spend to be the increase in Generation Z and millennial shoppers, who spend the most online.
By 2029 these generations will account for more than half of the adult population, compared with 39% in 2019, and will provide the bulk of spending.
Splitting consumers into age groups, the report found that, currently, those aged between 25 and 34 accounted for the largest clothing spend online (35.7%), and those aged 45 to 54 were responsible for the largest online footwear spend (35.1%).
After books, clothing was the largest product category contributing to online retail sales.
Other contributing factors to online doubling its share in the retail market, were found to be changes in the property market, improvements in connectivity and innovate technology.
Richard Lim of Retail Economics said: ”Despite concurrent waves of political and economic upheaval in our midst, our work with retailers suggest this is a mere distraction from the seismic structural shifts reshaping the retail landscape.
”New and emerging technologies will empower further online growth as artificial intelligence and 5G dovetail to enhance retailers’ capabilities for speedier and cheaper online fulfilment, including in-home delivery. Meanwhile, innovative new retail business models will emerge. Subscriptions, auto-replenishment and fewer (but more experiential) stores will drive online sales to heights where online will become the largest channel within the next 10 years.
”Successful retailers have always had to reinvent themselves to stay relevant. However, the pace of change will inevitably prove too fast for many. While the impact of future technologies and consumer acceptance is highly uncertain, it definitely feels like the digital retail revolution is only just getting started.”