UK businesses could be forgiven for worrying about the coming year, with UK consumer retail spending set to shrink owing to rising household bills. Eleanor Thomas of online retailer Wholee, however, disagrees, saying that with the right business approach, 2022 can be a successful year for retailers.
2021 was a struggle for the UK retail industry. Lockdowns, goods shortages and new variants disrupted an industry that had barely recovered from the initial shock of Coronavirus. On the surface, 2022 does not look much better, with consumer retail spending set to fall as household budgets are squeezed by rising bills, tax increases and inflation.
However, dig deeper and retailers should not be downhearted. After all, consumers will not cease spending altogether, they will just look to cut back. This means they will become even more savvy than they already are when it comes to shopping and looking for the best prices, and retailers need to be just as savvy with how they operate.
Many retailers, having been forced to by the pandemic, have embraced the possibilities that online marketplaces provide for growing their businesses. The platform these marketplaces provide for reaching consumers has grown rapidly. Mirakl’s ‘2022 State of Online Marketplace Adoption’ survey, published earlier this month, found that 68 per cent of UK consumers felt online marketplaces were the most convenient way to shop. Given the pressure that family finances will face this year, this figure will grow, particularly as those surveyed noted competitive prices as being key to their preference for online marketplaces.
Of course, for the majority of UK shoppers, their go-to choice for shopping online is Amazon, and has been for a long time. Since it arrived in the UK in 1998 as an online book store, it has grown to dominate UK online shopping sales, taking over £20 billion in revenue in 2020.
However, as it has grown so has scrutiny of the company. The sights of its founder Jeff Bezos blasting off into space as the pandemic continued last year, and more recently its attempts to strong-arm Visa into changing its credit card fees by threatening to block the use of UK-issued credit cards, have done damage to Amazon’s reputation among consumers. Consumer exploration of the variety on offer in e-commerce had been growing anyway thanks to the pandemic, and Amazon’s recent negative publicity means shoppers are now even more likely to have a look around at alternatives to the big names.
Now is therefore exactly the right time for those businesses who were sceptical of the merits of adding an online arm to take that step.
Of course, as Isaac Newton’s third law states, “every action has an equal and opposite reaction.” With the growth of e-commerce and the emergence of online marketplaces as
the first choice for consumer retail spending, the UK high street will continue to see a decline in footfall. Whilst high streets have been a staple of British culture for decades, times change. If businesses choose to deny the benefits and overwhelming convenience for consumers of e-commerce in favour of nostalgia, it will lead to business decline and, ultimately, closure. The online space is not about forcing people out of business; it is the opposite, giving businesses the chance to expand beyond the limits that their physical retail spaces previously imposed.
In August 2020, Wholee began business with a promise to consumers to provide the range of goods they had come to expect from marketplaces like Amazon for prices less than they were used to paying. Key to this model, along with our zero mark-up prices, has been the adoption of technology that being online can permit. Our use of 360 degree product viewing technology and AI to help match consumers with products that best meet their needs has helped set us apart in consumers’ eyes, and has played a major part in the growth we have achieved. This growth is proof it is possible to enter the apparently overwhelming online universe and thrive.
2022 will unquestionably be another tough year. But in the face of anticipated cutbacks in consumer spending, there is a clear route for businesses of all sizes to succeed and grow, and that route is online.
Leave a Comment