Over the past year, retail sales in the UK dropped as traditional bricks and mortar shops struggled to compete with online retailers that are expected to see a surge in sales as shoppers turn to the internet to seek out deals.
Following on from Black Friday, forecasts suggest consumers will spend an estimated$3.81bn (£2.86bn) on Cyber Monday, up from $3.45bn in 2016, according to Adobe Digital Insights.
Jeremy Gleeson, manager of the Axa Framlington Global Technology fund and Axa WF Digital Economy fund, said shopping holidays like Cyber Monday are perfectly suited to today’s consumer.
He said: “Recently, the Chinese equivalent, Singles day 2017, crushed this record seeing e-commerce giant Alibaba sell $25bn of goods – more than what Starbucks makes in a whole year.
“This is being driven by changes to the retail industry underpinned by innovation and the digital economy. The smart phone, digital marketing and finding ways to fulfil the online customer experience are all trends that continue to transform the retail industry.”
On Cyber Monday last year, 31% of transactions were done on mobile phones accounting for approximately $1.07bn, according to Adobe Digital Insights. An estimated 60% of shoppers also use their phones to look up product information, even when in-store.
With this convenience factor taking priority, Gleeson said this is why “optimised mobile sites have never been more important”.
Traditional retailers such as Next saw shares topple earlier this month due to unpredictable weather.
“Traditional bricks and mortar businesses are increasingly requiring expertise from third party specialists in order to compete and catch up with ‘digital native’ businesses,” Gleeson said. “Convenience for customers has also become priority – the ordering, payment process and delivery should be fast, secured and as smooth as possible.
“As the growth of online sales increases, we also see large investment into supply chains which have helped improve supply chain software and warehouse automation helping businesses to keep up with same day and next day delivery.”
While retailer’s warehouse activity currently stands at above 90% manual work, it is thought automation could be 5-6 times more productive; we expect to see more companies (as Amazon has done) turn to robo-tech to further streamline processes.”
A win all-round
Although Cyber Monday is expected to boost online retailers’ sales, logistics providers are also likely to benefit from this surge.
But Nigel Thomas, manager of the Axa Framlington Select Opportunities Fund said online retailers need to do more than just have lorries, vans and distribution centres.
He said: “Earlier this year, we invested in Eddie Stobart Logistics through their initial public offering (IPO).
“Their CEO, Alex Laffey, who formerly ran Tesco’s logistical operations, has expanded the business into this part of the logistics industry, leveraging their existing expertise in distribution centres and the ‘middle mile’ haulage.
“The other crucial part of fulfilling the online customer experience is around the payment process. We have witnessed significant improvements in online transaction security as well as growth in credit payment options, with companies such as Worldpay and Experian benefiting from the growth of payments online.”
