Predictions highlight changing global landscape where bricks and mortar stores evolve into interactive showrooms
By 2022, the emerging countries of China, India, Russia and Brazil will have become four of the six largest retail markets in the world, according to a new report from the Economist Intelligence Unit (EIU).
The report, Retail 2022, predicts that the Chinese retail market will be worth $8.3 trillion (£5.2tn) by 2022 – around a quarter of global retail sales and twice the size of the US market at $4.5tn (£2.8tn).
India will be next in line at almost $4tn (£2.5tn), followed by Japan ($1.6tn or £1.007tn), Russia ($1.5tn or £944 billion) and Brazil ($1.2tn or £755 billion). In ten years the analyst said that the Indian retail market alone could be the size of Western Europe’s.
Domestic midmarket to feel the squeeze
In contrast to this, weakness in the UK market could see polarised shopping habits – when consumers purchase staples from discounters to fund luxury purchases – leading to an even greater squeeze on midmarket retail by 2022.
Jon Copestake, Economist Intelligence Unit chief retail analyst and author of Retail 2022, commented: “The opportunities for retail over the next decade and beyond are enormous. But where the future markets will reside and the way in which we will buy goods will change dramatically. Retailers will need to evolve to adapt to this new landscape.”
The report predicts e-commerce, m-commerce (sales made via smartphones) and s-commerce (sales made through social media) will transform global retail and 2022 will see online purchases account for one-third or more of sales in markets like the UK, compared to around 10% now. M-commerce will be a mainstream means of shopping by 2022, as more consumers make impulse purchases directly on mobile platforms.
S-commerce, led by investment in traffic drivers such as Pinterest, will add a further dimension to virtual shopping. By 2022, bargain-driven technologies such as Groupon and mysupermarket will have merged and expanded into sophisticated sites tailoring and personalising the best offers for consumers.
Evolution of store as showroom
It also forecast that ‘bricks and mortar’ stores will fight back, as traditional retailers respond to change by integrating online with physical store offerings. Physical stores will not disappear by 2022, but they will play a very different role. Many shops may operate as little more than showrooms, collection centres or customer service hubs. Augmented reality displays will also become the norm, driven by smartphone applications, according to the report.
Convenience will be king, it added, as consumers take a multichannel approach rather than ‘one-stop shopping’. As a result, convenience store penetration will rise further by 2022 as the balance between price and convenience shifts back towards the latter.