Tougher competition for online retail

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Online retailers face tougher competition in the coming year, Manhattan Associates, the supply chain IT specialist,  predicts.

Manhattan said online shopping is expected to account for 11 per cent of UK retail spend over 2013, rising to 15 per cent by 2017 and more than 30 per cent by 2022.

“Online-only retailers have, by and large, been the winners to date in the ongoing retail revolution that continues to see the volume of goods bought online grow and grow, however traditional bricks-and-mortar retailers are starting to fight back by investing in services and technologies that will help them remain both profitable and relevant, said Craig Sears-Black, UK managing director.

“They are implementing what consumers like about ecommerce into their stores at the same time as investing in their own online offer and making the overall cross-channel shopping experience seamless for their customers. They are also, in increasing numbers, selling their goods overseas – through online and offline ventures – and building infrastructures and associated systems capabilities that can facilitate this.”

Increasing online competition is one of seven trends identified by Manhattan in the UK retail market in the coming year. Other trends include:

* increasing mobile shopping and force retailers to optimise their websites and online shops for smartphone and tablet access.

* a rise in the level of “showrooming” when consumers visit bricks-and-mortar stores to look at products but then buy them online at a lower price. To win this showrooming battle, retailers will need to build customer profiles based on previous purchases to encourage future transactions.

* accelerating investment in in-store technology to provide integration between the store and other channels to ensure customers get what they want when they are actually in the store.

* emerging competitors.  Manhattan expects to me more consumer-to-consumer marketplaces to emerge this year. Existing examples include Airbnb, Pinterest,, and Etsy and involve consumers selling and trading online, and advising one another about their buying experiences at the same time.

* rising demand for a seamless shopping experience across multiple channels

* accelerating international expansion. With UK consumers tightening their purse strings, the real business growth opportunities lie in overseas markets, e.g. Australia, Brazil, Russia, India or China, says Manhattan. “The starting point to grow overseas is to expand their shipping options to include international delivery, like ASOS did, before launching a transactional website in a given market. The longer the supply chain will become, the more complex and prone to risk it will become. In the same way that it has enabled the global sourcing process, supply chain IT can also manage the complexities of feeding stores globally and the increases in throughputs that ensue. Logistics systems such as warehouse and transport management; supply chain planning for replenishment and applications offering supply chain visibility to view, link and manage a globalised retail operation will be vital.”

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