Retailers must adapt to a new age of consumption – new study
A new study has found that the rise of smartphones and an ageing population will drive faster retail sales growth over the next decade although retailers will need to adapt to the changing market.
The Reshaping of Retail, produced by Conlumino on behalf of shopping centre owner Hammerson, predicts an average annual growth in retail spending of 2.4% between 2013 and 2022. By 2022, retail spending is predicted to reach £377 billion, up 26% on current levels.
The report predicts there will be a changing mindset amongst consumers in which there is a switch from ‘careless consumption’ to ‘considered consumption’, which is less impulse driven and more about selective purchasing.
“Considered consumption reflects a consumer who is less concerned with the pure acquisition of products, and thinks more about what they are buying,” saids Hammerson chief executive David Atkins. “It makes it vital for retailers to have a strong, differentiated brand, offer must-have products, and engage more frequently with their customers to give them a reason to visit their stores”
Never Miss a Retail Update!The reports says that much of the retail growth will be driven by older shoppers with the over-55s contributing towards 62% of retail growth by 2022.
While stores will retain a vital role, the report says that overall store numbers in the UK will decline by 10.3% and that retailers will focus their expansion towards major cities and destination shopping centres, which offer larger stores, ease of access and a good choice of restaurants and cafés.
The report also predicts that mobile devices will account for over a quarter of retail sales by 2020 – some £54 billion – partly through direct sales and partly through customers using their devices to research purchases in store or on the move.
Neil Saunders, managing director, Conlumino said: “Hammerson’s report reveals that Britain needs to rewrite the retail rules. Retailers must differentiate their ranges, engage more frequently with consumers and adapt their business model to a slower growth environment if they are to inspire, excite and compel shoppers in an era where consumers are calling the shots.”
Atkins added: “While such dramatic change in retail will inevitably present challenges to some, there is also a huge opportunity for those retailers which anticipate and meet the changing needs of customers.”
