Smartphones and an ageing population will drive retail sales over the next decade, according to a new report commissioned by Hammerson, the developer behind the Eastgate Quarters in Leeds.
The report predicts retail spending will reach £377bn by 2022, up 26 per cent on current levels and it claims that the over 55s will contribute nearly two thirds of retail growth by 2022.
Hammerson said the report, which looks at the changing landscape of retail, will help to shape the Eastgate Quarters development in Leeds.
It predicted average annual growth in retail spending of 2.4 per cent between 2013 and 2022, an improvement on the 1.9 per cent achieved over the past decade. However, the rate of spending growth is far below that achieved through the 1980s and 1990s.
The report said retailers will need to be on top of their game to thrive in the age of ‘Considered Consumption’ over the decade ahead.
Hammerson’s chief executive David Atkins said: “Considered Consumption reflects a consumer who is less concerned with the pure acquisition of products and thinks more about what they are buying.
“It makes it vital for retailers to have a strong, differentiated brand, offer ‘must have’ products, and engage more frequently with their customers to give them a reason to visit their stores.”
He said the findings from the report will not only help Hammerson to understand how the consumer will behave over the next decade, but it will also help with the design of the Eastgate scheme.
The report said the consumer is shifting from ‘Careless Consumption’ to ‘Considered Consumption’, which is less impulse driven and more about selective purchasing.
By next year, 69 per cent of consumers are expected to use three or more channels to shop. By 2020, mobile spend is set to be £54bn of direct and indirect sales, compared with £3bn today.
Nearly 60 per cent of consumers are shopping using click and collect and this is a trend that is set to continue.
Overall store numbers are expected to decline by 10 per cent by 2020. Despite this the role of the store will still remain key with a greater share of retail sales informed by online research.
The report suggested that retailers will focus their expansion towards major cities and destination shopping centres, which offer larger stores, good accessibility and a better choice of restaurants.
It concluded that stores will have to evolve, with their role in highlighting brand awareness, showcasing product offers and facilitating click and collect purchases growing in importance.
Mr Atkins said: “While such dramatic change in retail will inevitably present challenges to some, there is also a huge opportunity for retailers which anticipate and meet the changing needs of customers.”