Up To A Third Of Physical Store Space Could Be Dedicated To Online Fulfilment: Study

By Steve Wynne-Jones
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Up To A Third Of Physical Store Space Could Be Dedicated To Online Fulfilment: Study

As much as a third of physical retail store space could be dedicated to online fulfilment in the future, a new study by Edge Retail Insight has found, as e-commerce sales reach 34.8% share of the global retail market by 2023.

According to the study, Winning Strategies: Store of the Future 2021, the share of in-store sales will decline to 62.4% by 2025, down from about 70% in 2021, with shoppers retaining many of their online shopping habits post-pandemic.

Across the overall retail spectrum, e-commerce adoption accelerated by two years as a result of the pandemic, ahead of previous projections.

Grocery E-Commerce Slower To Evolve

It's worth noting that grocery e-commerce is expected to show a slower migration to online, but will grow by at least two percentage points in major markets over the next five years, according to the study.


In the UK, for example, Edge Retail Insights estimates that e-commerce grocery will account for almost 16% of the category by 2026, up from 12% in 2021.

Unsurprisingly, China is the market that is likely to 'lay the foundations' for the store of the future template, as digital giants such as Alibaba and develop seamless online-offline shopping experience, according to the study.

"The global pandemic accelerated the adoption of online retail across all key categories," commented Deren Baker, CEO at Edge by Ascential. "With record numbers of store closures since the outbreak of the pandemic, store-based retail is now at a tipping point. However, a lot of value remains in the bricks-and-mortar model - you just need to look at Alibaba and Amazon’s investment into the high street as evidence of that.

“But retailers and suppliers must invest in a range of new capabilities to drive successful actions in the future store, which will have very different characteristics to the model that worked until about 2010.”


Retail Categories

In terms of the retail categories that are likely to see the highest level of online adoption, the electrical goods category could see as much as 70% of purchasing take place online over the next five years, which is 10 basis points higher than today according to Edge Retail Insights.

Elsewhere, the leisure and entertainment category in the US and UK is moving towards an e-commerce share of 50%, while Germany is expected to reach 60% by 2026.

© 2021 European Supermarket Magazine. Article by Stephen Wynne-Jones. For more Technology news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.

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