Two thirds of retailers expect sales in physical stores to decline, Rakuten finds

Two thirds (63%) of retailers expect sales in physical stores to decline this year while just 75 predict an increase, according to research by the online marketplace Rakuten.

The research conducted at last month’s Internet Retailing Expo, also calls the future of the high street into question, with one in four delegates stating they expect Britain’s high street to shift to a showroom-led dynamic over the next 12 months, where shoppers browse in store, but ultimately purchase online.

Adam Stewart, marketing director at Rakuten’s, said: “There’s no question that shoppers still love that tangible branded shopping experience that the high street delivers so well, but this idea of showrooming is growing in popularity. 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.”

More Government support

Pressure was 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 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.

International growth top of the agenda

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. 

Omni-channel retail

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, said researchers.

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 just 13% and 15% of retailers respectively.

Stewart said: “It’s interesting to see few retailers are taking advantage of free social tools like Twitter and Facebook to engage shoppers. It’s true 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. 

“At Rakuten’s we find this channel to be incredibly valuable as a sales influencer, an instant conversational platform and for customer service.”