With the Retail Technology Show fast approaching, we take a closer look at the British retail market and key consumer trends at the checkout.
Retail is an integral part of the UK economy.
Generating £112.9 billion annually, it’s home to over 314,040 retail businesses, and some of the world’s most innovative and well-loved brands. Despite the recent cost of living crisis, the nation’s consumers still love to shop and are among the most digitally-savvy in Europe.
Where UK consumers are shopping.
UK consumers still expect to be able to shop in store, even if they research in digital channels. When buying online, many also like to have the option of checking out their digital purchases in a physical outlet – especially if trust is important in their decision-making journey. Just under a quarter of consumers are “hesitant to buy from online-only brands” compared to only 13% when businesses “also have physical stores.
What Brits are buying.
In terms of spend value, food makes up the highest proportion of UK purchases, with fashion also high on consumers shopping lists.
- 40% is spent in food shops
- 11% in clothing shops (including textiles and footwear)
- 9% on automotive fuel
- 7% on household goods shops (including electronics and furniture stores)
- 33% in non-specialist shops, market stores, catalogues and online only retail.
Demand for experiences and convenience.
Consumers are increasingly drawn towards shops that provide experiences and services that cannot be sourced online (such as stylists, repairs, cafes) rather than simply browsing space. At the same time, convenience stores, are benefited from the “localisation” of shopping habits, as more people work from home on a regular basis.
The evolving payment mix.
When it comes to payments, the UK is gradually becoming a cashless economy. In 2024, as little as 7% of in-store purchases in the UK are expected to be made by cash, as consumers switch to other payment methods.
Contactless is now the most popular payment method. In 2023, 93.4% of all in-store card transactions up to £100 were made using contactless. Interestingly, 80% of 85-95 year old Brits now use contactless, showing that young or old they all everyone loves the power of convenient tap and go payments.
Mobile-first, buy later is the new mantra.
Britain’s high smartphone penetration is also impacting the payment mix – more than 10 million people now use mobile payments with Apple Pay the most popular wallet. Buy now pay later (BNPL) has also had a significant impact on payment preferences with 14 million people, 27% of UK adults, now using it at the checkout – in store and online.
Omnichannel and hybrid services are now expected.
Although 36% of consumers still make most purchases in physical stores, 36% split their shopping between stores and online in equal measure. 28% of UK shoppers opt to do most of their shopping online. Many shoppers now start and finish their journeys in different channels, researching, discovering, purchasing and ordering is a multi-channel affair.
Unsurprisingly, hybrid services are becoming the new normal. In 2022, click and collect accounted for 8.4% of total UK retail spending, and is gaining traction with consumers as retailers continue to develop their omnichannel propositions.
Supporting customer-centric retailers.
With a portfolio of high-performance POS devices suitable for large and small stores, for remote acceptance and unattended, Castles Technology is a firm favourite for UK retailers seeking competitively priced solutions with a technical edge.
Accepting all popular payment methods – cards, contactless, digital wallets, QR codes and BNPL – they have all the front and back-end functionality required to deliver great sales experience that appeal to the UK’s convenience-orientated customers. Our Android devices are also among the most secure with advanced features to safeguard users and retailers reputations.
Not only that, with extensive local support – including dedicated merchant management and customer service teams located in the UK – and cloud based remote management, we deliver first-rate merchant services for first class sales performance.
