Younger shoppers are more likely to buy clothes online – while older shoppers want to try them on in-store. Image: Fotolia
UK clothing retailers will next year become the first in Europe to see most sales take place online, a new report suggests.
That point will come as online sales of apparel overtake in-store sales in 2022, three years earlier than previously predicted. The pandemic, says Retail Economics report The Future of the European Apparel Industry, has accelerated the shift online in the sector - and is set to leave high street stores with a £14.5bn sales shortfall unless urgent action is taken.
Retail Economics says 52% of UK apparel sales will take place online in 2022, followed by the Netherlands, where 52% of clothing sales are expected to be online in 2025.
While UK online sales rose by 19% or £2.7bn in 2020, compared to 2019, according to Retail Economics, clothing sales fell at the same time by 24%, or £9.6bn. According to Retail Economics’ survey of more than 4,000 European households in September 2021, 35% of UK shoppers have yet to return to stores with the same frequency as before Covid, followed by France (27%), Germany (25%) and the Netherlands (24%). Significant minorities of millennial shoppers in both the UK (44%) and Europe (34%) say their habits have changed permanently.
That is set to leave UK clothes retailers collectively losing an average of £3bn a year from in-store sales. Across the four European markets, average losses will come to £6.8bn a year between 2021 and 2025, or £34bn in total over that period.
Now, says James Batham of Eversheds Sutherland, which commissioned the report, online shopping for clothes is fast becoming a powerful habit. “This change of habit means the way we think about high street retail has to evolve. The industry needs a transformation in planning, policy and skills to avoid billions of pounds of sales and thousands of jobs being lost. Retailers will have to alter the way they use commercial real estate and the customer experiences they deliver. They have to bring people back to the high street, and not just from across the UK, but from across the globe.
“Whereas reforming business rates is well debated, removing the friction of shopping in the UK for overseas consumers is not. Exemptions for international shopping areas have been discussed for London, but what about in tourist hotspots across the UK? Reform on shopping visas, Sunday trading and tax-free shopping are highly likely to generate more revenue through sales for the government than they will through tax. These no-cost options should be considered as the UK looks to establish itself as an international retail market outside of the EU.”
Richard Lim, chief executive of Retail Economics, says: “The pandemic-induced shift to online and subsequent impact on store-based sales has magnified the urgency for retailers to adapt. Physical stores must be reimagined and repurposed to meet the needs of an increasingly digital-centric customer journey, becoming a powerful driver of online sales rather than competing against them.
“Stores will play multiple roles to become much more than a point of transaction. Some stores will function as immersive showrooms or ‘brand-bonding’ centres where customers can discover and interact with products, while others will operate as convenient fulfilment hubs geared towards click-and-collect and returns. Either way, the continued fusion of physical and digital realms will be key.
“Retailers will need to evolve their business models to stay ahead of the curve. This may involve integrating digital technology to provide a next-generation store experience, investing in supply chains to scale up delivery capabilities or forming strategic brand partnerships to reach new audiences.
“Fewer stores are inevitable, but those that are left will be a much better fit for the future. When executed correctly, physical stores can become powerful customer acquisition tools, complementing online channels whilst simultaneously offering unique and meaningful customer experiences that strengthen brand loyalty.”
Bringing shoppers back in store
The report asked shoppers what they valued about shops, and found the ability to touch, feel and try on products are the most important aspects of shopping in-store for 68% of consumers, especially Gen X (70%) and baby boomer (75%) respondents. Almost a third (30%) of UK consumers say they have bought clothing online following a visit to a store.
Two thirds (66%) of UK consumers say they are likely to use in-store tablets or other interactive digital screens to be able to browse and order online with a retailer while in-store.
And almost a quarter 39% of UK conusmers say they are more likely to visit an clothes shop if it offers free click-and-collect and returns. This percentage increases in UK millennials with 49% saying they would be more likely to visit an apparel store if it offered free click-and-collect. More than a third (35%) say personalised shopping experiences, such as personal styling or bespoke product recommendations, are more likely to make them visit a store.
via https://AiUpNow.com November 2, 2021 at 07:45AM by Chloe Rigby, Khareem Sudlow,
