Click-and-collect worth over £42bn to UK in 2022 as ‘hybrid shopping’ grows

The value of click-and-collect to the UK economy stands at £42.4bn in 2022, and is 8.4% of the UK’s total retail spending this year, according to new research by Barclays.

Click-and-collect, where goods are bought online but picked up from a physical store, now accounts for 40% of sales for retailers who offer the service, up from 37% a year ago.

The ‘What’s in store for retail?’ report by Barclays Corporate Banking also reveals that click-and-collect supports 184,000 jobs across the industry, and 7.4% of the overall workforce in retailers with over 10 employees.

The study examines the role of the physical store versus online retail, showing there is a rise in ‘hybrid shopping,’ which involves physical and digital interactions, such as online research and an in-store purchase.

The need to integrate digital and in-store is fast becoming a standard industry expectation. Over two fifths (41%) of physical stores in the UK are now used as click-and-collect locations, with the same amount being used to process returns.

Consumers like to research products online and in-store in equal measure across a number of products, including fashion (33%), accessories (31%), homewares (34%) and garden products (28%).

The Barclays data reveals that having both an online and physical presence can be advantageous for a retailer’s appeal, as a quarter (24%) of consumers say they can be hesitant when buying from online-only brands, a figure which drops to just over one in 10 (13%) when businesses also have physical stores.

John Lewis's Click & Collect service

Karen Johnson, Head of Retail and Wholesale, Barclays Corporate Banking, said: “Perhaps more than any other sector over the past two years, retail has been forced into a period of accelerated evolution. The pandemic drove everyone online, and now the rising cost-of-living is increasing business outgoings while reducing consumer spending.

“Encouragingly for the UK’s retail sector, however, businesses are adapting their sales models to weather these financial storms as effectively as possible. Links between digital and physical shopping are being evolved, which are opening up new opportunities and ways to generate income.”

Despite the increasing popularity of online shopping, there is still big support for high streets. When asked whether there is a future for physical retail space, 67% of consumers surveyed agreed that there is, of whom 32% strongly agreed. However, there is a clear demographic split: just over half (54%) of 16-24 year-olds believe in the future of the physical store, compared with almost three quarters (74%) of over 55’s.

Following the inevitable acceleration in the shift to digital shopping during the Covid pandemic, consumers are now returning to stores to make their purchases with confidence, and trust in bricks and mortar stores remains strong.

Almost nine in 10 (88%) retailers feel that operating a physical store is vital to their business success. However, many are re-evaluating where their real estate is based, to make sure they occupy the most appealing destinations for consumers. Two in five (41%) have reduced the number of stores they have in city centres, while 32% have increased their presence in retail parks. An increased presence in retail parks will likely be popular with shoppers aged over 55, a third (33%) of whom say it is their preferred location for a store.

Other findings from the ‘What’s in store for retail?’ report include:

• A third (31%) of retailers report that festive shopping is already underway. Discount retailers are the most likely to have seen Christmas shopping start early (38%)
• A quarter (26%) of retailers have introduced services in-store such as beauty and grooming concessions, while 24% have partnered with another brand to share retail space, and 21% have created co-working spaces in-store
• Three in 10 retailers (28%) are investing more in their data capabilities
• 15% of retailers say they have recreated the traditional in-store experience in the Metaverse
• 39% of consumers want retail space to become more sustainable through more efficient energy use, such as turning lights off at closing, and 25% would like to see more electric vehicle charging points

The cost-of-living crisis is also creating additional challenges for retailers. Barclays’ research shows that British shoppers are aiming to reduce their spending by between 25% and 30% before the end of the year, across a broad span of retail categories.

However, the biggest strain on business profitability is staff wages - selected by 23.4% of the retailer respondents, ahead of fuel costs (21.6%), rent (21.6%), energy bills (21.3%) and a predicted fall in revenue (21%).

The Barclays report is based on bespoke market research conducted by Censuswide among 2,006 UK consumers of a nationally representative make up, and 600 UK senior managers in retail businesses who have at least one physical store. The research was conducted between 25 - 27 July 2022 and 25 July – 8 August 2022 respectively.

Development Economics used the results of Barclays’ research, coupled with official data from the ONS, to calculate industry workforce totals and the value of the click-and-collect economy.