High Street and Online Retailing Expectations

High Street and Online Retailing Expectations

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Now that the Brexit vote to leave Europe has gone through, the persistent uncertainties are palpable, and it’s tough to understand what Britain’s new standard will be like. There’s a lot of pessimism about the future, but the action of consumers, businesses and politicians after the referendum will determine how the future will be.

Glaring issues such as trading with Europe exist, essentially Britain’s top trading partner. Whether there’ll be bilateral agreements with the European Union, Brexit represents not a single event or thing but the beginning of various changes that the nation will have to discuss with other partners. As market turbulence immediately followed the Leave vote, consumers and retailers were hugely dominated by frustrations. While the full effect of Brexit will be felt from 2018, when Britain will finally leave the EU officially, the immediate disastrous impact on the stock exchange and the sterling pound is expected to dissipate for now.

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Not a rosy picture of the coming two years

In light of this, the way the retail future will be by 2018 paints a picture of different colours that might not be great news even with the fresh Brexit aftermath. By 2018, the total number of retail stores is expected to drop by 22 percent to about 220,000 from a high of 281,930.

Online retail expectations

At the same time, sales on online retail are expected to hit 21.5 percent by 2018 from 12.7 percent by the turn of 2013. Medium-sized and significant companies, about 164 in number, are expected to go into administration, which will see over 140k workers losing their jobs and 22.6k stores going down. At the same time, the High street could be in trouble as 41 percent of town centres will see about 27,638 high street stores going down by 2018.

It’s worth noting that the UK online retailing world is growing and seeing a massive increase in retail sales. This has been a critical observation, and many British and foreign observers are still analysing how the region will turn out as the retail innovation bug hits home.

Noteworthy is the fact that online retailing is turning out to be made up of primarily North American and European retailing. In Europe, the online retail growth rate stood at 18.4 percent in 2014 and 18.6 percent by 2015. After the recession, many shoppers today turn online to purchase their products, ignoring traditional stores. The Internet search’s predictability and comparative ease have made online retailing lucrative and attractive for all sectors and niches.

In Europe, the online retail market is mainly dominated by France, Germany and the UK, which cater for 81.5 percent of online sales in Europe. In the UK, Online sales stood at £52.25 billion. £60.04 billion is expected for 2016.

Mobile e-commerce

Mobile commerce has grown much; 70-80 percent of website visits are via mobile devices. Nonetheless, in Europe, online spending via mobile devices was only 20 percent, with 28.6 percent of shoppers in the UK using mobile devices in 2015. Overall online retail sales through mobile devices are highest in Europe, where online sales via laptops and PCs stood at only 6 percent.

Stores and online retailing

In terms of traditional stores vis a vis online retailing, the effect is already apparent. Traditional shops are losing their market; in 2016 alone, online retailers are growing by 16.7 percent while retail markets remain stagnant. Sales through conventional stores are expected to dip by 1.5 percent in 2016 in Europe and 4.3 percent in the United Kingdom alone. It’s already creating a huge strategic problem for many furniture retail stores and other industries, while fewer physical stores mean a diminished employment rate.

Shunning the high street

Consumers are also shunning the high street for other reasons, with spending on the high street declining from 50 percent by the turn of the 21st century to an expected 40.2 percent by 2017. As a result of less shopping in high street stores, online retail is expected to enjoy 21.5 percent of retail sales margins by 2018 from just 12.7 percent in 2013.

As lots of transactions took place on the web, those retail with robust online offerings could have enjoyed a national presence easily and fast, with just about 70 retail stores on the high street in 2013, while in 2006, 250 stores in the high street were required for a company to be deemed to have a national presence.

The United Kingdom has faced high-street stores and online retail dilemmas. Retailers and retailing have to make strategic moves to allow web retailing to work hand in hand with in-store retailing chains and let high-street stores self-transform. On the contrary, if decisions aren’t made, many high street retailers will disappear or be obliterated as a significant category in business will be dominated by web retailers.