Electricals market to overtake fashion in online sales

According to new research, sales of electrical goods will take a 29% share of online sales in 2015, meaning electricals will inch past online fashion sales for the first time.

Market research firm Mintel predicts sales of electricals will add up to £12.6 billion, up from £10.7 billion in 2014. Meanwhile, clothing and footwear sales will hit £12.4 billion in 2015, up from £10.7 billion last year.

Total online retail sales are expected to hit £43.3 billion in 2015, making up 12.7% of all retail sales. Meanwhile, total annual online sales will rise by 64% to £71.2 billion in 2020, making up 18% of total retail sales, according to forecasts.

Mintel estimates 48% of all electrical and electronic good sales will be made online, up from 38% in 2013, while 19% of fashion sales will come from online (up from 15% in 2013), but only 6% of grocery sales (up from 5%) will be digital. Grocery sales are still expected to account for 20% of total online retail sales this year, equating to £8.6 billion, up from £7.5 billion in 2014.

Richard Perks, director of retail research at Mintel, said: "Online is best at selling goods which are bought on specification or where a wide range is demanded – so books, music and electronics. Stores are best for goods where seeing the product is more important or where customers are going to need help in making their choice. One of the great strengths of a store based retailer is that it makes the selection for the customer. Online retailers generally leave the selection to the customer who can then be confronted with a huge choice."

Multichannel

Mintel research also explored consumer attitudes to in store and online retailing. It discovered that 53% of online shoppers would like to order goods online but pay for them in-store, while 48% want to use click & collect to avoid paying for delivery. Despite the need for stores to support online fulfilment, Mintel forecasts stores will account for 48% of all online sales in 2020, down from 51% in 2014.

Perks added: "For store based retailers the distinction between selling online and in store is becoming increasingly academic as shoppers use them interchangeably. The key for retailers in the future will be to offer as good a service as possible through whichever channel customers want to use at the time."

Daniel Todaro, managing director at field marketing agency Gekko, commented: "Shopping online may be easier and quicker for many consumers, but the benefit of being able to touch, experience and ask for advice on the product from a staff member should not be overlooked. According to recent research, 95% of shoppers 'frequently or occasionally shop' on a retailer's website and in store. To appeal to shoppers, brands need a consistent approach to their branding, ensuring product recall and a consistent brand experience from the tablet at home to the shop floor.

"High street stores need to be more than a showroom for electrical products. Retailers should aim to reflect online branding and enhance this with the benefit of product demonstrations from trained brand ambassadors, offering an intimate, personalised brand experience that can’t be matched through ecommerce alone."