The retail sector in the UK is changing fast, with online shopping one of the most important trends we have seen so far. In the latest shopping index released by Salesforce, we see that UK consumers now more than ever, use their mobile devices to shop. Last year, 43 percent of all online shopping traffic in the UK came from mobile devices, with that figure jumping to 64 percent this year. Previously, consumers would browse online and then head to a brick and mortar store to make a purchase but now, many shoppers prefer to browse and shop online.
Is mobile taking over?
Not quite. That more UK shoppers are using their mobile phones to shop does not mean brick and mortar stores will suffer. Many consumers still prefer to head to a physical store to pick up an item instantly. This is still an advantage brick and mortar stores have over online shopping which requires buyers to wait for days before they have their merchandise delivered.
Data from the Office for National Statistics shows that only 14.5 percent of sales were made online last year while offline sales accounted for 85.5 percent of all retail sales. While 5 percent of sales in the food sector were made online, the household goods sector saw 10 percent of online sales, and the clothing and footwear sector saw 13.5 percent of online sales.
Even as more UK shoppers continue to go online, brick and mortar stores will remain relevant by virtue of their convenience and the added advantage of the full shopping experience which buyers don't get when they shop online.
A new king
Industrial property is rising in demand alongside the need for storage facilities in broad distribution markets. This is to take care of the need to make online deliveries faster. When online retailers are able to position storage facilities as close to the buyers as possible, it becomes easier to deliver products in record time.
While national retailers such as Macy’s, JCPenney, and Sears are planning to close down many of their stores, we might begin to see these spaces taken up by large-scale retailers in need of storage space. For landlords, this means they would have to get landlord insurance as there may be higher risks of damage to property depending on the kind of products the property is used to store.
Synergy and flexibility
The way forward for brick and mortar stores may be to find a way to combine traditional retail with e-commerce. They can include flexible payment options in their physical stores and allow customers make orders online before picking them up in-store.
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Author
Ivan Radford