What percentage of retail sales happen online?

Combine the fact that two of the UK’s biggest retailers operate purely online – Amazon and eBay – with customers’ growing dependence on digital transactions, and it should come as no surprise that the number of sales happening online is rising.

In the last 10 years alone, total online retail sales have risen by 5% to 20%! That’s a massive increase which is already predicted to grow.

Why are online sales rising?

The answer to this rests in the transition of businesses onto the web. In the past, shops were all about the bricks and mortar, and enticing customers to come visit.

Websites allowed businesses to go a step further and cater for a wider clientele – beyond those who lived locally and – without having to open more shops. In doing so, they were able to save money on renting space and reinvest this money back into their business.

Yet this too is now evolving, with many businesses choosing to launch their business online first – as digital first retailers – before even exploring the idea of having a physical store.And this concept has got a lot of merit for businesses and customers alike:

1. Businesses

• No physical store location fees e.g. rent, electricity, gas, maintenance, etc.
• No location restrictions – they can reach customers across the entire country and beyond.

2. Customers

• Able to shop 24/7.
• Save money – through price comparisons and searching for the best deal.
• No transport/parking issues – products delivered straight to their home
• Saves time – online customers can find everything they need at a click of a button.
• More convenient – no queues, no crowds, etc.
• Free shipping – this is quite common amongst online stores. Amazon offer their Amazon Prime customers free shipping for a small yearly fee. Others offer free shipping once you spend a certain amount.

Now this is not to discount physical stores. In fact, once their online presence is established, many digital first retailers then open physical shops so that they can maximise customer experience.

You see, whilst online stores can fulfil customer demands for instant goods and answers; as a society we crave interaction. We like the possibility of being able to interact with products before we buy so we can determine if we want them.

This is especially true of clothes, for example, a size 10 in one shop can be a size 8 or 12 in another. This means that without the option to try them on, customers run the risk of buying clothes online that don’t fit and which they’ll have to send back – wasting time.

And this is true of a lot of products, especially as not all photos are true to life – in terms of size, colouring, and especially quality.

However, by giving customers the chance to visit a physical store, your team can easily help them to make a purchasing decision as they’ll be able to see, test or watch a demo of the product in action.

Then there are these factors:

• Customers crave human interaction with more than just your staff, but other customers. They like to see what’s popular and listen to feedback.
• Instant access to goods – not every customer wants to spend a set amount in order to get free delivery, nor wait 3 – 5 days for their products to arrive. This means you risk losing a sale because you lack an instant physical option. However, by offering your customers the chance to click and collect from your store – for free – they can gain immediate access to your goods without having to wait for delivery.
• Customers still enjoy physical shopping – stats suggest the older the customer, the more they’ll prefer visiting an actual shop. For instance, only 28% of seniors like online shopping, compared to 67% of millennials. As such, you need to have a balance that caters for everyone i.e. a physical AND an online presence.

How might designs for these stores differ from other retailers?

There’s no denying that there will be design differences between stores opened by digital first retailers and those who used the brick and mortar route first.

This is because of knowledge and experience. Unlike traditional retailers, digital first have the advantage of having access to data from their online sales. They therefore already know what’s popular amongst their client base – and where – and will be able to stock their stores appropriately.

Amazon is a prime example of this strategy working. Using data they’ve accumulated, they’ve been able to open bookstores in locations where they know that book sales will be high.

But these are not the only tactics digital first retailers can use:

• Be cashierless – by providing customers with handheld devices which can scan and complete their transactions; they remove the need for a checkout area and eliminate potential queues. Amazon is further proof that this idea can work with their Amazon Go Grocery stores. Here customers pick their own produce and pay without having to go to a checkout.
• Integrate digital into the shopping experience – Asda’s new Scan & Go device, allows shoppers to manage their own shopping journey – including payment – and sustain social distancing in the current climate. In fact, they can scan and pack their items using this device as they shop, before paying at their dedicated card checkouts.
• Design with social media post-worthy, Instagrammable backgrounds in mind – the latest trend amongst digital first retailers is to design their stores to be visually ‘share-worthy’. In doing so, they hope that customers will post their experiences online and make their stores a ‘must visit destination’. At the same time, this tactic can help broaden brand awareness, increase foot traffic and sales, and provide you with user-generated content that can be used for marketing.
• Focus on experiences – instead of highlighting the amount of products on display, many digital first retailers choose to focus on the impact their instore experiences have on customers so that their journey is more meaningful. This can be achieved by offering them in-store brand experiences where they can test out products and bring their story to life.

Whilst online sales may be on the rise; customers still love the option of being able to shop in a physical store. If anything their purchasing decisions are based on a combo of the two – physical browsing and digital research. This means as a business you need to find the best of both worlds.

Give your customers the shopping journey they deserve – talk to our team of designers at Resolution Interiors today.