Retailers expecting a 'Showrooming future'

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By: Wise Marketer Staff |

Posted on April 24, 2013

Despite major high street brands in the UK announcing good profits in the first quarter of 2013, retailer optimism is not widespread, with only 7% expecting sales growth this year and 63% expecting sales in physical stores to decline, according to a study by UK online marketplace operator Rakuten.

The research was conducted among delegates at the 2013 Internet Retailing Expo to examine trends within the retail industry, shedding new light on the apparent rise of 'showrooming', opportunities for growth through international sales and government support, and the role of social media in better customer communications.

The future of the high street was further called into question, with one in four delegates stating that they expect Britain's high street to shift to a showroom led dynamic over the next twelve months, where shoppers browse in store, but ultimately purchase online.

"There is no question that shoppers still love that tangible branded shopping experience that the high street delivers so well, but the idea of showrooming is growing in popularity," said Adam Stewart, marketing director for Rakuten's marketplace. "Ultimately it's about creating multi-touch shopping experiences and this extends online, from interacting with customers through social channels to providing a dynamic and entertaining digital shopping experience."

Pressure is also high for greater Government support for the retail sector; 83% of retailers thought the government could do more to support businesses both on and offline. Access to credit was of greatest concern, with 29% of vendors stating that banks needed greater encouragement to lend. Another key financial pinch-point was the rise in business rates, with many retailers calling for a revision in rates to stimulate growth in the economy.

On the topic of growth, international markets were of huge interest to British retailers, with three quarters pinpointing international trade as a significant opportunity to increase sales. In fact, 40% of retailers believe the biggest benefit to selling online is the ability to expand audience reach and access the international shopping community. However, nearly a quarter of retailers were scared to take the plunge selling overseas, with 28% citing concerns around e-infrastructure, such as international payments and local language websites, as a major barrier to international sales.

But despite the growing need for an online offering, half of retailers questioned were concerned about attracting sufficient footfall to an independent website online, which highlights the growing role of the online marketplaces as a virtual shopping mall, driving shoppers to browse and buy.

Most retailers questioned still rely on email for the majority of customer communications with 69% stating this was their main customer contact channel. Despite the growing hype around social shopping, surprisingly Facebook and Twitter platforms were used by only 13% and 15% of retailers respectively.

"It's interesting to see that few retailers are taking advantage of free social tools such as Twitter and Facebook to engage shoppers," concluded Stewart. "It's true that social is not for everyone, especially when you consider the resource required to run these channels effectively, but it's a key part of delivering the multi-channel brand experiences consumers are fast coming to expect."

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