In the first instalment of our three-part series looking at the current state of the UK retail sector, we considered the challenges that our retailers are facing. We now turn to look at how those external pressures are shaping trends in the sector, as we look to the year ahead.
E-commerce driven by millennials
Much of the future growth in e-commerce will be driven by the millennial generation. Millennials now make up around two billion of the world’s total population and are seen as the emerging key consumer segment, so understanding their purchasing habits and preferences is vital.
Three of the top five online products (as measured by online sales as a percentage of total sales) include media (books and music), electronics and apparel. Whilst revenue generated from media online will continue to grow, expect to see a downward trend in conventional ‘sales’, with millennials preferring to stream rather than purchase.
The rise of M-commerce
According to the latest research from PwC, more than half of all e-commerce transactions by volume took place on a mobile device in the UK in 2016. Consumers are showing a strong preference for shopping via websites optimised for mobile devices, rather than in retailers’ own apps, which hold consumers captive and prevent them from shopping around. Even for those not buying on their phones, over two thirds of consumers admit to using their phones to research a product they are looking at in a shop, whilst in the shop – most commonly, to compare prices, look up specifications or check reviews. For retailers, investing in getting a mobile site right is now more important than ever.