E-Commerce Growth Forcing Retail Sector Evolution

May 2018


How E-Commerce Growth is Forcing the Retail Sector to Evolve

The retail industry has undergone a lot of big changes over the past two decades or so, with the finger often pointed at the internet for forcing such adaption. A decline in high street sales has coincided with a massive boom for the e-commerce industry and seen a number of big names go out of business, such as BHS and Toys ‘R’ Us, while many more continue to struggle.

For other retailers though, the rise of e-commerce and changing consumer habits has to lead to them evolving to stay in business and thrive. While e-commerce has also helped other industries grow themselves, as explored here.   

Strong Ecommerce Performance

From 2015 to 2018 e-commerce has increased its share of retail sales revenue consistently, from 14.4% in 2015 to 18% predicted in 2018. This has been a common trend for many years now. Even though e-commerce is still behind high street and traditional retail, if it continues to grow at the same rate then in the next couple of decades it could easily overtake them.

Having a physical presence is now no longer essential for retail companies to survive. A lot has taken inspiration from e-commerce, with almost all supermarkets offering online shopping these days, while some retailers have moved more of their focus online as some of their physical stores have closed their doors. It’s the retailers that haven’t made such a move who are getting left behind as they aren’t evolving with the industry.  

The Death of the High Street

One recent report claims that by 2030 the high street may be dead as we know it, with the impact of e-commerce and home deliveries having taken its toll. If e-commerce continues to rise in the way it has then by 2030 it may account for 40% of all UK retail sales, with supermarkets expected to fall to just 24%, which would be unsustainable. The online fashion industry is one of the main sectors expected to benefit, with it's market share predicted to increase to 63% compared to 21% in 2018. 

In order for the high street to survive than many retail businesses will need to adapt and evolve. Focusing on e-commerce can be a great way to increase revenue without the overheads of opening up new stores. However, further steps such as using technology and apps in-store, creating innovative ways to combine these with the shopping experience and making it a more social thing are required to avoid all physical shops disappearing.

Mobile and Future Ecommerce Growth

One of the biggest shifts for e-commerce is the evolution of mobile. Issues such as security and hard to use e-commerce sites on mobile have previously put off many consumers from buying through their phone. However, given the convenience and greater focus on improving the layout of mobile e-commerce sites, by 2020 it’s expected to account for 50% of all e-commerce sales.

Meanwhile, e-commerce as a whole is predicted to keep growing, with more demand for one-day shipping and voice activation playing a bigger role. The more the e-commerce sector grows, the harder it could be for the high-street retail to catch up.   

Fulfilment and Deliveries are Thriving

As the high-street retail sector struggles in the face of e-commerce growth, a few other industries have prospered. Parcel delivery services and fulfilment have been greatly bolstered by the increase in e-commerce companies needing to arrange high volumes to be sent out and delivered each month. With many start-ups and large, established e-commerce firms in existence, more are using fulfilment services as well to smooth out and simplify their operational processes.

Get started with Whistl by filling out an online form or giving us a call to find out more about parcel delivery and fulfilment services to help your e-commerce or online retail business succeed.  

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