UK clothing retailers will next year become the first in Europe to see the majority of sales take place online, according to a new report by Retail Economics.
The Future of the European Apparel Industry report predicts online apparel sales to overtake in-store sales in 2022, three years earlier than forecasted.
The pandemic has accelerated the online shift and high street stores will be left with a £14.5 billion sales shortfall unless imminent action is taken.
The research reveals that 52 per cent of UK apparel sales will take place online in 2022, followed by the Netherlands, where 52 per cent of clothing sales are expected to be online by 2025.
While UK online sales rose by 19 per cent or £2.7 billion in 2020, high street sales fell by 24 per cent or £9.6 billion.
In addition, 35 per cent of UK shoppers have yet to return to stores with the same pre-covid frequency, followed by France at 27 per cent, Germany at 25 per cent and the Netherlands at 24 per cent respectively.
A significant number of millennial shoppers, 44 per cent in the UK and 34 per cent in Europe, added that their habits have changed permanently.
In the UK, the report also estimates that the shift to online will result in apparel store-based sales losing an average of £3 billion a year compared to pre-pandemic projections.
“Over the pandemic we saw the switch to consumers buying online accelerate,” Eversheds Sutherland partner and head of retail and leisure James Batham said.
“As lockdowns lasted for longer, and companies invested in the digital and logistics infrastructure to service demand, buying online stopped becoming forced and started becoming many people’s preferred method.
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“Now that consumers can return to the high street, we can see that buying online has become a habit, and this change of habit means the way we think about high street retail has to evolve.
“The industry needs a transformation in planning, policy and skills to avoid billions of pounds of sales and thousands of jobs being lost. “
Batham added: “Retailers will have to alter the way they use commercial real estate and the customer experiences they deliver.”
Retail Economics chief executive Richard Lim continued: “The pandemic-induced shift to online and subsequent impact on store-based sales has magnified the urgency for retailers to adapt.
“Physical stores must be reimagined and repurposed to meet the needs of an increasingly digital-centric customer journey, becoming a powerful driver of online sales rather than competing against them.
“Stores will play multiple roles to become much more than a point of transaction.
“Some stores will function as immersive showrooms or ‘brand-bonding’ centres where customers can discover and interact with products, while others will operate as convenient fulfilment hubs geared towards click-and-collect and returns,” Lim concluded.
“Either way, the continued fusion of physical and digital realms will be key.”
