Spotlight: Retail Revolutions

Retail Revolutions
The consumer relationship between retail and etail

27 September 2016, by Tom Whittington

Is choice and convenience driving the move online?


While most people still prefer to shop in-store for fashion, the move online may reflect instances where the retail offer in the locale fails to meet their needs and the physical alternatives are not convenient. For example, 48% of survey respondents stated that they would go online for their fashion purchases if their local offer did not satisfy their needs, compared to the 38% who would visit a larger town or shopping centre.

Access to retail is also key. For example, rural shoppers generally use the internet for the highest proportion of their shopping, giving them access to brands only available in large shopping destinations further afield. This has implications with regards to home delivery and internet connectivity.

The ‘physical’ store still holds the aces when it comes to customer experience and engagement. There remains an overwhelming preference for trying on clothes before buying across all demographic groups, with around 75% of consumers stating this as a preference. For Generation Z (aged 16-24 years) and Millennials (Gen Y aged 25-34 years) 79.9% and 76.1% of respondents respectively state this as important, dropping slightly for the 45-64 age group, who are likely to have embraced the internet and are comfortable making repeat purchases. Trying on clothes, however, becomes less of a key concern for consumers the further they are required to travel to a shop.

Several online retailers (e.g. Thread) are working hard to address this specific challenge through a more bespoke online offer, with personal stylists and an efficient and free delivery/returns service. For the consumer, it is not about either shopping on the internet or shopping in-store. It is about switching seamlessly between the channels depending on their specific demands and needs at that point in time. The most frequent proponents of shopping online think that the internet offers a better solution with regards to browsing, price, comparison, convenience, speed and range, with over indexing on these issues for all consumer groups regardless of age, demography or location. Yet, when it comes to enjoyment, trust and returns, the physical store wins out.

Online also provides an increasingly important resource for shoppers to undertake research. Millennials are the most adept at this ‘online’ research pre store purchases, particularly in London and Scotland, and are more likely to switch between channels than older generations, for whom online research typically results in an online sale (Figure 3).


Online research of in-store purchases

Figure 3

Source: Savills Research, Verdict

There is some variation between age and location with regards to how well embraced etail has been. Baby Boomers in the North use the internet for the least proportion of shopping trips (13% NE), while Millennials from Wales use it the most (49%). London, where there is by far the biggest choice of delivery and collection options, has below average use of etail in all ages/social grades, other than the over-65s; choice and quality of the high street offer clearly playing a vital role for most shoppers in the capital. There is not a single consumer group that does more than 50% of their fashion shopping online. However, several towns have seen a surge in online, some of which may reflect a lack of choice and convenience. Survey results for Scunthorpe, Grimsby, Dalkeith and Sleaford suggest that online fashion spend is as high as 50%.

Considering that the retail offer in these towns is heavily skewed towards value (over 50%) and with vacancy rates in excess of 15%, suggests that the current offer may not be meeting shoppers’ demands. In contrast Aylesbury, Huddersfield, Wigan and Hull, which enjoy a more rounded fashion offer, including a higher proportion of aspirational retailers, tend to report far lower online fashion spend. This raises the question, did the demise of ‘convenient’ fashion in our local centres help to further propel the move of sales online?

This is perhaps a point not lost on some of the ‘convenience’ fashion brands such as Primark, H&M and Pep&Co, who have been expanding in both ‘prime’ and in some cases what could be considered as ‘secondary’ and ‘tertiary’ locations. This expansion of store portfolios across a wider range of location types could be considered as way of protecting total sales due to the relationship that is often found between online sales and the opening of a new store in certain catchments. It is this relationship, along with the brand boost, that is encouraging some pure play fashion brands to develop their own physical stores.


Key Contacts

Tom Whittington

Tom Whittington

Retail Research


+44 (0) 161 244 7779


Marie Hickey

Marie Hickey

Commercial Research

Margaret Street

+44 (0) 20 3320 8288


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