Sep 15, 2017
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Fashion and beauty will be key for UK e-tail rise says GlobalData

Sep 15, 2017

Fashion is going to be the big driver behind the UK’s 35% rise in e-tail sales in the next five years, a new report says. Analysts at GlobalData believe the market will reach a value of  £68.8 billion by 2022.

Pureplays like Boohoo will be big winners as e-tail expands

But fashion won’t be the only star growth sector and beauty will also be a major player with the researchers saying that sectors that have traditionally experienced low online penetration, such as health & beauty and furniture & floor coverings, will “rise significantly”.

During the period, shopping via smartphone will continue to be consumers’ channel of choice as mobile spend rises 112%, helped by improvements in retailers’ own mobile functionality “together with the prominence of a ‘see now, buy now’, instant gratification consumer mentality.”

GlobalData said that 78% of the UK population has shopped online over the past year with convenience and low prices being the big attractions. And young shoppers in particular are increasingly e-focused.

Sofie Willmott, Senior Retail Analyst at GlobalData said: “Our E-retail [In The UK 2017-2022] report shows online shopper penetration for 16-34 year olds above 90% affirming the importance of the online channel for younger consumers. Online pureplays including Amazon and ASOS continue to innovate introducing new technology and driving up consumer expectations of delivery and user experience, requiring multi-channel players to quickly follow suit to maintain their relevance.”

The company said that the health & beauty category will rise by 66.2% in the five-year period (albeit from a lower starting point than fashion) with market-leading retailers such as Boots and Superdrug likely to be major beneficiaries of this shift.

“However they remain under threat from online pureplays such as Lookfantastic.com and Asos as well as the department stores which have rapidly improved their beauty propositions, making brands and exclusives far more accessible,” Wilmott added.

But it looks like anything e-tailers can do to offer a greater chance that shoppers will pick the right goods first time will be a boon as online returns are forecast to grow at practically the same rate as online spend over the next five years. That means an ever-larger logistical operation to get those returned goods back and onto store (or e-store) shelves.  Fashion, which dominates the e-tail channel, will account for 70% of all online returns by 2022.

Willmott added: “Despite the online channel providing a lifeline to bricks & clicks retailers experiencing tough offline sales, e-retail still imposes significant challenges, including the management of returned stock. Online returns will continue to rise over the next five years as consumers become more experienced and confident in managing the free and simple returns processes, combined with increased availability of online delivery saver schemes.”

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