Member Article

The North East and smartphones: Where does the future lie?

Consumers are set to spend £53.6bn a year using their smartphones and tablets by 2024, compared with the £9.7bn spent today, according to new research by Barclays.

However, the influence of mobile on spending is expected to more than double this figure from £18.4bn to £112bn over the same period. This means that nearly half (42.4%) of all retail sales will involve a mobile device in some way or another, making mobile the fastest growing retail segment.

So what does this mean for the North East?

According to the report, North East spend on smartphones and tablets is set to increase by 218% over the next five years from £328m to over £1bn as North East shoppers trawl the internet for bargains.

North East retailers will see an increase of 153% over the next five years of spend influenced by mobile devices with £624m increasing to £1.5bn by 2019.

Nationally if you were to equate mobile sales in terms of store numbers, in five years’ time it would require a chain of around 30,000 stores, nearly three times the size of Walmart, the world’s largest retailer, which has 11,000 outlets worldwide. Within the next decade, the number of stores required will rise to nearer 48,000.

This is against a backdrop of predictions for single digit growth across the wider retail sector. In 2014 the value of retail sales reached £325bn. During the next five years’ time the sector is forecast to enjoy 8.1% growth taking sales to £351bn with the figure rising to £391bn by 2024.

Brian Thorpe, Head of Barclays Corporate Banking in the North East said: “The size of the retail opportunity is clear for all to see. The question every North East retailer should be asking themselves is what they are doing about it to not only satisfy today’s consumer but, also tomorrows.

“While it may be premature to sound the death knell for desktops and laptops nearly half of consumers claim to be shopping far less on these devices thanks to mobile. With new gadgets and gizmos such as the Apple watch being launched all the time, this trend will inevitably gain momentum.

“There is also a lingering notion that mobile shopping is bad for store retailing. The physical high street store still has a fundamental role to play and the development of hybrids such as click and collect has conclusively demonstrated that stores can be supported rather than hindered by the growth of digital commerce.

“Inevitably practises such as ‘showrooming’ leads to some sales shifting online but, with almost three quarters of consumers using their mobile devices whilst out and about, ignoring this trend would be a missed opportunity. North East retailers must cater for the mobile consumer in order to remain relevant.”

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