According to the ONS Retail Sales Index for January 2026, online retail now accounts for 28% of all sales in the UK. On average, it showed that internet sales reached £2.7 billion, with online spending values rising 1.8% in three months.
People are spending more online than face-to-face as well. Last year, a report from ONS suggested that the average cost of transactions for online purchases increased by 16.7%. For face-to-face purchases, this was just 6.9%.
Why Online Retail Is Taking Market Share
The shift comes down to three things. These are convenience, variety, and value. Something that brick-and-mortar shops have been struggling with for years.
Take a brand like Next, for example. Once only a high-street retailer, they now generate the majority of their revenue through their online platform. Shoppers get a much better variety and can filter products by colour, size, and price, improving the shopping experience.
Entertainment brands have even taken note. Platforms offering slots online now carry categories with well over 100 titles, like the Big Bass series, all the way to King Rich Win. This level of variety just wouldn’t be possible in a physical venue. Players can filter, play, and switch between games with just a click or tap.
Supermarkets have done the same. When Ocado entered the market with their online-based supermarket model, other brands had to follow. Tesco, Sainsbury’s, and Asda now compete against this stolen market share with their own online platforms and through delivery apps.
What Brick-and-Mortar Retailers Can Do
For physical retailers, the answer isn’t to fight online retailers. Often, it isn’t possible to.
The one thing they do lack, however, is real, in-store experience. This is something that online retailers will never be able to compete with again. Therefore, physical retailers can use this to their advantage.
Retailers like Lush and Apple do this perfectly. The shop floors at either of these brands don’t feel like a shop; they feel more like a destination. With such environments in place, it makes people want to visit and not just purchase online.
Click-and-collect is something else brick-and-mortar shops can consider. It brings online shoppers into a physical store. This is where you can provide them with a world-class experience to keep them coming back.
What This Means for Retail Business Owners
Both online and brick-and-mortar shops are presented with opportunities and problems.
For online retailers, the data is encouraging. Online sales are increasing. However, this isn’t new. Every business knows about this, so competition is fierce. Standing out can often feel difficult as there are so many brands competing for the same customers.
With a brick-and-mortar store, a 28% market share for online sales might seem like a lot. But what about the other 72%? That’s where the opportunity is. And if they’re able to capture even a small percentage of this market through captivating in-store experiences, they’ll thrive.
