Clothing & footwear to drive UK E-retail spend to £68.8 billion by 2022
Issued by GlobalData - Sep 18th 2017, 10:59
The UK E-retail market is forecast to rise 35% over the next five years reaching £68.8 billion by 2022, according to GlobalData, a recognised leader in providing business information and analytics.
The UK E-retail market is forecast to rise 35% over the next five years reaching £68.8 billion by 2022, according to GlobalData, a recognized leader in providing business information and analytics.
The company’s latest report: ‘E-retail in the UK 2017-2022’ reveals that although clothing & footwear will be the biggest contributor to growth, sectors that have traditionally experienced low online penetration such as health & beauty and furniture & floorcoverings, will rise significantly during the same period shopping via smartphone will continue to be consumers’ channel of choice as mobile spend rises 112% over the next five years. This trend will be driven by improvements in retailers’ own mobile functionality together with the prominence of a ‘see now, buy now’, instant gratification consumer mentality.
In the last 12 months, 78% of the UK population have shopped online the prime drivers being convenience and the lure of lower prices.
As Sofie Willmott, Senior Retail Analyst at GlobalData comments: “Our E-retail report shows online shopper penetration for 16-34-year-olds above 90% affirming the importance of the online channel for younger consumers. Online pureplays including Amazon and ASOS continue to innovate introducing new technology and driving up consumer expectations of delivery and user experience, requiring multi-channel players to quickly follow suit to maintain their relevance.”
Despite low online penetration in 2017, the health & beauty sector is forecast to experience the highest growth in the next five years with sales set to rise by 66.2%.
Willmott explains; “Market leaders Boots and Superdrug are well placed to benefit from the shift to online, with strong brand and delivery lead time propositions in place. However, they remain under threat from online pureplays such as Lookfantastic.com and ASOS as well as the department stores which have rapidly improved their beauty propositions, – making brands and exclusives far more accessible.”
Online returns are forecast to grow at practically the same rate as online spend over the next five years with clothing & footwear dominating the channel, accounting for 70% of all online returns by 2022.
Willmott adds: “Despite the online channel providing a lifeline to bricks & clicks retailers experiencing tough offline sales, e-retail still imposes significant challenges, including the management of returned stock. Online returns will continue to rise over the next five years as consumers become more experienced and confident in managing the free and simple returns processes, combined with increased availability of online delivery saver schemes.”
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