Britain is a nation of shopkeepers, or so claimed Napoleon Bonaparte. It was not meant as a complement. It appears that today, the UK is a nation of online shoppers. It is not so certain that it is a nation of online shopkeepers, however.
By 2018, claims the Centre for Retail Research, online retail is set to account for 21.5 per cent of total retail sales in the UK, from 12.7 per cent today, which is the highest online retail share in the world.
That may not be such good news for jobs. The Centre for Retail Research says that job losses could be around 316,000 compared to today, as total store numbers will fall by 22 per cent, from 281,930 today to 220,000 in 2018.
A number of retailers have discovered a High Street presence can complement online sales. Customers are going into John Lewis, for example, and then going home and buying products from the John Lewis Web site that they saw in the store. Some even go online while they are in the store.
But the numbers speak for themselves. “With such a high number of transactions carried out online, retailers with a strong web offering now need just 70 high street stores to create a national presence compared to 250 in the mid-2000s,” says the Centre for Retail Research.
In many ways the move from High Street to online illustrates both the opportunity and the challenge. Online shopping opens up a market for what is called the long tail. Someone specialising in a niche product can find that their web site promotes their products to a global audience, making it viable for them to sell their wares, whereas in the pre-Internet days the numbers were just not there to justify making the effort, or investing money for such a business.
On the other hand, online shopping is creating fewer jobs than it is destroying, and not all former sales assistants can work in coffee shops.
As we move further towards Internet sales, it will be even easier for companies to plough their profits into subsidiaries where corporation tax is lower, which is yet another reason why global cooperation in taxation is so essential.
© Investment & Business News 2013