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Published
Nov 2, 2021
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The future is here as online to beat physical stores for UK clothing sales - report

Published
Nov 2, 2021

The UK fashion retail market is at a tipping point that very few people had expected to happen this early. Online clothing sales are about to take over from physical shops as the biggest channel.


Photo: Pixabay/Public domain



This is predicted to happen next year when e-clothing will account for 52% of all sales, clearly accelerated by behaviour changes due to the pandemic. And it means that physical shops could lose around £3 billion worth of sales a year if the trend continues.

That’s according to a new report, The Future of the European Apparel Industry, from Retail Economics and Eversheds Sutherland. 

The research was based on consumer panels in the UK, France, Germany and the Netherlands with a total of 4,000 nationally representative households surveyed.

The report said that UK digital fashion purchases rose by as much as £2.7 billion (19% of the total) during the pandemic, even though total clothing transactions fell by £9.6 billion. 

It means that the point at which online becomes the biggest channel for clothing sales will happen three years ahead of schedule, with pre-pandemic estimates assuming it wouldn't take place until 2025. 

It would also make the UK the first European country where the majority of clothing is bought online, although the Netherlands is expected to catch up by 2025. It will happen later in France and Germany.

Over a third of UK consumers said they're now not expecting to visit physical shops as often as they did before the pandemic. That marks out the UK as quite different from the other European countries where those planning to shop less often in physical locations only add up to around a quarter of all consumers.

Millennials are at the forefront of this change, with 34% in Europe and 44% in the UK changing their shopping habits completely.

James Batham, Head of Retail and Leisure at Eversheds Sutherland, said: “As lockdowns lasted for longer, and companies invested in the digital and logistics infrastructure to service demand, buying online stopped becoming forced and started becoming many people’s preferred method.”

STORES MUST NOW EVOLVE

Can anything be done in Britain to slow down the move towards online? That's debatable, but Batham added: “Now that consumers can return to the high street we can see that buying online has become a habit, and this change of habit means the way we think about high street retail has to evolve. The industry needs a transformation in planning, policy and skills to avoid billions of pounds of sales and thousands of jobs being lost. Retailers will have to alter the way they use commercial real estate and the customer experiences they deliver. They have to bring people back to the high street, and not just from across the UK, but from across the globe.”

He also thinks reducing tax and regulations could help. He said more needs to be done to encourage tourist shoppers to come to the UK. That's a particularly valid point given this year's change to tax-free shopping rules that retailers say will dent tourist shopping trips to Britain once international travel gets back to normal. 

Batham said: “Reform on shopping visas, Sunday trading and tax-free shopping are highly likely to generate more revenue through sales for the Government than they will through tax. These no-cost options should be considered as the UK looks to establish itself as an international retail market outside of the EU.”

But Retail Economics CEO Richard Lim said there will always be a place for physical shops in the future, we just have to accept change.

“Stores will play multiple roles to become much more than a point of transaction,” he said. “Some stores will function as immersive showrooms or ‘brand-bonding’ centres where customers can discover and interact with products, while others will operate as convenient fulfilment hubs geared towards click-and-collect and returns”.

This is clear from the survey as 68% of consumers said being able to touch, feel and try on products is key. That’s especially the case for the older Gen X and Boomer age groups, but in general, 30% of all UK consumers have bought clothing online following a visit to a store.

And they want to see more digital features in those stores. Some 66% say they’re likely to use in-store tablets or other interactive digital screens to both browse and order while in-store.

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