|Carousel by Herve Boulben|
More evidence was announced this week in the Financial Times about the profound changes taking place in the UK, where 33 million people – more than two thirds of British adults – use the internet every day. This is twice the number who did so just six years ago. The data produced by the Office for National Statistics certainly reveals some interesting trends. 47% of adults say that they bank online and 67% say that they shop on the internet, up from 53% in 2008. Among the 25 to 34 year group, some 87% shop online. Use of the internet for telephone and video calls has risen much faster than expected, with 32% of adults now doing so, four times the number forecast in 2007. This builds on other anecdotal evidence we have seen over the last month. A recent report indicated that the number of visits to a car showroom before purchasing a new car is 1.8, down dramatically over the last decade, as more of the research is carried out from the comfort of one’s sofa rather than the dubious pleasure of meeting the salesman.
This all, of course, reflects the profound changes that we have talked about before. Certain goods – books, CDs, DVDs – have become commoditised to the extent that there is little value added in the retail experience for most consumers. I would disagree profoundly with this of course, as far too much of my time has been spent in various bookshops and record shops (whoops, I think I many have given my generation away there). However, for other areas, the retail 'experience' is still of key importance – you can’t go for a test drive on a website, for example. Indeed, for car retailers, no longer needing to provide consumers with their own body weight in high quality glossy brochures is a positive advantage.
So, as ever in life, it is very much a case of swings and roundabouts. The door for some unfortunate retailers has closed, while for others it has opened. What is clear, however, is that the pace of change is continuing to quicken.
Divisional Director - Investment Management