Shopper Discounts and Rewards: the growth of online retail
For many retailers the growth has come so fast that it no longer complements high street sales. Instead many are seeing high street sales cannibalised by online channels in ways that many would have never predicted. High street baker Greggs claims that because more consumers are staying in and shopping online, they have seen a drastic reduction in footfall into their establishments.
‘online only’ still dominates
The winner in the battle for dominance in the online retail sector is yet to be decided. Whilst some of the biggest UK retail brands such as M&S, Next and Topshop are seeing success through online channels, sites like ASOS and Net-a-Porter are reaping the biggest rewards. These sites benefit from low barriers to entry, small start-up costs, competitive pricing and an efficient experience. These online businesses are not only experiencing tremendous growth from local markets but also from international sales.
overseas sales
A recent report from consulting firm OC&C states that sales generated in the UK from international markets are expected to soar sevenfold to £28bn by 2020. OC&C consultant Anita Balchandani commented:
“It is perhaps no surprise that companies like Amazon and eBay now generate about half of their revenues from international markets in a fraction of the time that it has taken the likes of Wal-Mart and Tesco.”
Even the likes of high end brands such as Jimmy Choo and Burberry receive more than half of their web traffic from overseas.
So what makes international eCommerce so popular and successful? Firstly, online retail provides consumers with the option to shop around. Not just between retailers but also between countries in order to find the best price or deal. Secondly, it doesn’t require substantial investment to grow into new markets therefore the risk of expansion is low. Finally, thanks to web technologies, companies can expand quickly. In fact, over 40 of the UK’s top online retailers now serve customers in more than 40 countries. Anita Balchandani from consulting firm OC&C says in This is Money:
“It is perhaps no surprise that companies like Amazon and eBay now generate about half of their revenues from international markets”
Related Post: Shopper Discounts and Rewards reveals the new M&S collection
omnichannel future
Despite the success of online only businesses, many believe that the future of retail lies in the omnichannel environment.
This is a trend many retailers are following. Catalogue retailer N Brown has just opened seven physical stores with plans for 20 more. Even Amazon and now ASOS have developed lockers in the physical world to make it easier for customers to return their items. Only time will tell how far online players will have to move into the ‘real’ world before they catch up with their high street rivals.
Related Posts:
Shopper Discounts and Rewards reveals the new M&S collection
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Sources:
This is Money: the Omniretailing Revolution
Real Business: international sales to boost UK online retailers
