The Evolution of Online Retail in the UK

Factors affecting online retail sales in the UK 

The last ten years has seen the destruction of analogue consumerism, fuelled by the rapid and ongoing transition to online, the growing importance of experiences and heightened consumer expectations. The power dynamic is shifting from the retailer to the consumer, and this digital disruption will only gain momentum in the next ten years as digital natives form the majority of the adult population. 

“Online will account for more than 50% of all retail sales by 2028

We forecast that online will account for more than 50% of all retail sales by 2028, and our research identifies 10 principle reasons why this might be. This article covers four of those reasons which details past and present factors that have shaped the development of online: 

1. The customer journey evolution

Digital technology has irreversibly changed our relationship with shopping. The explosion of consumer choice has influenced how shoppers research, communicate, consume content, seek information and purchase products. 

Figure 2: The retail customer journey

Source: Retail Economics 

The smartphone continues to be a major driving force behind this influence. The first iPhone launched in 2008, and now consumers spend 62% of their online time on mobile devices. 

Almost half of consumers suggested that smartphones are the most important device to connect to the internet, rising to 72% for those aged 16-34. These shifts in behaviour and preference have torn apart the analogue customer journey and replaced it with an almost endless array of digital and physical alternatives. 

New technology has enabled smoother and speedier transactions, but consumer preferences have become more fragmented with increasing options. One reason for this fragmentation is that consumers are exposed to more influences for inspiration, such as social media, influencers, celebrity endorsement and online communities. For Gen Zs and Millennials, this occurs most frequently on smartphones.