Click & collect "good for physical retail... is here to stay", says Barclays report
At least one aspect of physical retail is growing in these tough times. The value of click & collect to the UK economy is expected reach £42.4 billion in 2022 as the need to integrate digital and in-store is fast becoming a standard industry expectation, according to a report by Barclays Corporate Banking.
The ‘What’s ‘in-store’ for retail’ report reveals that the £42.4 billion total is expected to account for 8.4% of the retail sector’s income this year. Click & collect now accounts for 40% of sales for retailers that offer the service, up from 37% a year ago.
Some 41% of physical stores in the UK are now used as click & collect locations, with the same 41% used to process returns.
Meanwhile, click & collect also supports 184,000 jobs across the industry, some 7.4% of the overall workforce in retailers with over 10 employees.
And it's good for physical retail. Despite the increasing popularity of online shopping, there is still support for high streets. When asked whether there is a future for physical retail space, 67% of consumers agreed that there is, with 32% strongly agreeing. However, there is a clear demographic split. Some 54% of 16-24-year-olds believe in the future of the physical store, compared with 74% of over 55s.
“There is a rise in ‘hybrid shopping’, which involves physical and digital interactions… with support for physical retail still strong, albeit with a clear distinction between age groups”, the report said.
“Our research reveals that having both an online and physical presence can be advantageous for a retailer’s appeal”, it said. Some 24% of consumers say they can be hesitant when buying from online-only brands, a figure that drops to just 13% when businesses also have physical stores.
It noted that the popularity of the service grew during the pandemic but, unlike pure online sales that peaked during the period, it has continued to grow after the lifting of lockdown restrictions, “indicating that click & collect is a consumer behaviour that is here to stay”.
Barclays’ data also shows consumers like to research products online and in-store in equal measure across a number of products, including fashion (33%) and accessories (31%).
From a retailer prospective, 88% feel that operating a physical store is vital to their business success. “However, many are re-evaluating where their real estate is based, to make sure they occupy the most appealing destinations for consumers”, the report said.
Some 41% of retailers have reduced the number of stores they have in city centres, while 32% have increased their presence in retail parks. This will likely be popular with shoppers aged over 55, a third of whom say retail parks are their preferred locations for a store.
Karen Johnson, Head of Retail and Wholesale, Barclays Corporate Banking, said: “Perhaps more than any other sector over the past two years, retail has been forced into a period of accelerated evolution. The pandemic drove everyone online, and now the rising cost-of-living is increasing business outgoings while reducing consumer spending.
“Encouragingly for the UK’s retail sector, however, businesses are adapting their sales models to weather these financial storms as effectively as possible. Links between digital and physical shopping are being evolved, which are opening up new opportunities and ways to generate income.”
Other findings from the study reveal: 31% of retailers report that festive shopping is already under way with discount retailers the most likely to have seen Christmas shopping starting early (38%); a quarter (26%) of retailers have introduced services in-store such as beauty and grooming concessions, while 24% have partnered with another brand to share retail space, and 21% have created co-working spaces in-store; 28% of retailers are investing more in their data capabilities; 15% of retailers say they have recreated the traditional in-store experience in the Metaverse; and 39% of consumers want retail space to become more sustainable through more efficient energy use (turning lights off at closing), and 25% would like to see more electric vehicle charging points.
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