Online fashion retailers may face their own set of challenges (such as customers buying and returning items in bulk), but the figures indicate that online shopping behaviours are showing no signs of slowing. In fact, a study carried out by Credit Karma found that over 70% of those surveyed preferred to browse or buy goods online instead of heading to the store1.
The way we shop online is evolving too, with over 72% of all online purchases in 2021 being carried out online or via mobile2. With more and more of us picking up our favourite products using our mobiles, it looks as though we’re still more than happy to shop online and forgo the trip to the store.
With consumers stuck at home for long periods of time during the lockdowns, it’s unsurprising that many went online more frequently than usual to indulge in retail therapy, especially with many households saving money by working from home and fewer leisure expenditures. The question is, is this pattern likely to change now that the lockdowns are behind us?
Even with the option of visiting physical shops back on the table, consumers across the UK recognise the benefits online shopping can offer. In fact, as many consumers start to feel the squeeze of the cost-of-living crisis, online shopping can be more affordable.
One of the factors behind online shopping’s popularity is the option to split the cost of products over a set time. Many websites offer customers the opportunity to ‘buy now and pay later’, taking the pressure off those who are feeling the squeeze and enabling them to indulge without spending beyond their means.
With increased pressure on their finances, consumers are more likely to shop around and compare prices before making new purchases. The online shopping model makes this step in the shopping journey as easy as possible for would-be buyers, with the option to search their product and compare prices on Google without having to visit numerous shops to find the best price.
During the pandemic, the lockdowns meant that online shopping was the only option for consumers looking for a treat, and as shoppers were more likely to keep their orders instead of sending them back the costs associated with returns dropped too3.
So, what does this all mean for shop owners and their shop insurance needs? If you’re starting to sell online as well as from your physical shop to keep up with changing consumer habits, you’ll need to organise cover for stock sold online and anything you’re exporting from the UK. In fact, even if you’re only operating your shop online from your home, it’s not safe to assume that anything will be covered by your usual home insurance cover. By selling online you are operating as a business and require business insurance.
One of the most common shop insurance covers is product liability insurance. Hopefully, most of your customers will be happy with their products, but it’s important to have protection in place if you receive any claims in relation to your products supplied. If a customer is accidentally injured while using your product, product liability cover can help protect you and your business by providing legal defence cover, keeping the financial and reputational impact to a minimum if there is a problem.
Consider taking out additional marine cargo insurance for imports to you and goods in transit insurance for items you are sending out to customers. This will provide you with protection if your items are stolen or damaged during its journey to the customer. Goods in transit insurance means you may be able to claim, ensuring you’re able to replace the item for your customer without being out of pocket.
Alison Wild BCom (Hons), MAAT, MATT, Taxation Technician is a highly respected industry professional who has been working with and advising SMEs in areas including tax, pensions, insurance and marketing for over 25 years. She is a member of the Association of Accounting Technicians (AAT) and Association of Tax Technicians (ATT) and also has over 20 years' experience as a residential landlord.
1: www.chargedretail.co.uk: 70% of UK shoppers now prefer shopping online or via mobile (17-09-21)
2: fashiondiscounts.uk: What percentage of online shopping is mobile? (20-02-22)
3: The Guardian: Missguided went badly off course, could this become a trend? (04-06-22)
Date: August 09, 2022
Category: Small Business