My analysis of Consumer Behaviour in 2017 & Forecasts for 2018

1. Analysis of Consumer
Behaviour in 2017 &
Forecasts for 2018
By Jeff Nevil

2. The UK has witnessed a
considerable shift in consumer
purchasing behaviour, with a
greater number of individuals
opting to purchase products
online as opposed to visiting the
traditional high street stores.
This growth has primarily been
driven, and continues to be
attributed to, the growth in
consumers with smartphones,
and the unexpected rise in UK
eCommerce sales driven by those
purchasing on mobile devices.
Introduction: A Shift in UK
Consumer Behaviour

3. This has been reflected in the
number of high street shops that
closed in 2017, sales decreasing, and
fewer people opting to visit physical
stores.
Data released by the Local Data
Company in Q3 of 2017 revealed that
11% of the total number of high
street properties – both retail and
leisure units – were empty during Q2.
This has coincided with online sales
of non-food items soaring over the
previous five years, from 11.6% of the
total market in December 2012 to
24.1% in December 2017.
The High Street Retail Landscape
in 2017

4. However, the overall headline growth
rate did begin to slow, and different
sectors of the retail sphere
experienced a variation of shopping
trends.
In terms of clothing sales, there was
strong growth in both online and
offline purchases between 2009 to
2016.
However since 2016, the shift
towards the online sphere has meant
that there has been a decrease in
those purchasing goods from physical
stores and opting instead to shop
online.
There are a variety of reasons as to
why this is the case:
The Shift in the Clothing
Landscape

5. It is likely that the growth in online
retail sales is due to the
convenience that it affords the
consumer and the ability to shop at
any time of the day, from any
location.
The advent and continued increase
in next day delivery has been a key
factor in this continuous growth.
There are now a greater number of
retailers offering same-day delivery
in specific areas and this, along
with a greater trust in being able to
return goods, has assisted in
increasing eCommerce sales.
There is also a widely held and
engrained belief amongst shoppers
that online stores offer cheaper
products, even though this not
necessarily the case.
Why Has There Been An Increase
in Online Clothing Sales?

6. When analysing the sphere of
eCommerce as a whole, it is
perhaps unsurprising to learn that
the sector as a has continued to
see sustained growth as more and
more shoppers make the transition
from the high street to online
When looking at the overall retail
sector, total sales reached $22,737
trillion by the end of 2017, up 6%
when compared to 2016
However, perhaps surprisingly,
overall eCommerce sales are a
small percentage of the total with
9% of all sales in the USA and 17%
in the UK, but with continued
sustained growth.
The Performance of eCommerce
in 2017

7. How Will eCommerce Perform
in 2018?
It is expected that m-commerce will
continue to increase as more
individuals gain greater confidence
in using their mobile to shop online.
While desktop purchases will
continue to plateau, this growth in
mobile will continue to fuel the
substantial growth in eCommerce
overall.
Online (“pureplay”) merchants are
expected to increase their physical
footprint as consumers continue to
place greater importance on the
depth and versatility of online
convenience of purchasing,
collecting and returning items at a
location that is convenient.

8. The UK and European media have
heavily focused upon the potential
consequences of the Brexit vote on
the British car industry.
There was positive news in the first
quarter of 2017, when UK car
production hit a 17-year high.
Exports were boosted by a
combination of the weakened
pound and high levels of
investment over the previous years,
which led to large increases in
demand for vehicles from abroad,
both from inside and outside the
European Union.
How Did The Motor Industry
Fare in 2017?

9. However, the industry was unable to
continue this performance for the
duration of 2017, and by the beginning
of October, UK car sales decreased for
the sixth month in succession due
declines in consumer confidence.
This had a devastating impact upon the
industry, which suffered its first annual
decline since 2011.
By the end of the third quarter of 2017,
new car registrations declined by 9.3%
to 426,170, this was the first time that
sales by the end of Q3 had declined in
six years.
This decline was believed to be due a
consumer confidence ebbing away due
to the uncertainty surrounding Brexit,
and confusion regarding the air quality
plans relating to sales of diesel cars,
which declined by 22% in September.
How Did The Motor Industry
Fare in 2017?

10. Fears were realised in January 2018
when it was reported that UK car
production went into reverse in 2017 for
the first time since the depths of the
financial in 2009.
A total of 1.67m cars were produced
over the year, down 3% compared to
2016 as demand for British-made cars
dropped both at home and abroad.
How Did The Motor Industry
Fare in 2017?

11. Due to the continued interest in the
British car industry, experts have analysed
historical and recent buyer trends, which
combined with the latest financial
planning software, have predicted that
the UK car industry will see a further 6%
decrease in sales in 2018.
This is likely to be further compounded
due to a decline in investment;
companies including Toyota, Jaguar Land
Rover, McLaren committed £1.1bn in
future investment in the UK, down 34%
compared to the £1.66bn in 2016.
This will have larger ramifications for the
overall UK economy, due to there being
169,000 workers directly employed in the
manufacturing of vehicles, with another
814,000 individuals across the wider
automotive sector.
What are the Predictions For
The Motor Industry in 2018?

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