Top500 Uk 2019 Annual Report
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6238 - KLA - Internet Retailing Magazine_A4_AW.indd 1 25/01/2019 10:15 FROM THE EDITOR-IN-CHIEF
Introduction
Welcome to the InternetRetailing Top500 2019 report. Our annual reading of how UK ecommerce and multichannel retailers are performing is now in its fifth year. Over the last half-decade this research has stood out because while it starts with a Footprint ranking based on retailers’ revenues, store networks or web traffic, it adds to that an in- depth understanding of their performance. That’s measured through six Performance Dimensions: Strategy & Innovation, The Customer, Merchandising, Brand Engagement, Operations & Logistics and Mobile & Cross-channel. Through this approach we aim to understand more accurately which retailers are performing strongly, and which strategies, tools, technologies are helping them achieve that success. We believe that our research offers practical and useful insights into the best practice of what we term ‘RetailCraft’, and this report will be a highly useful tool for retailers eager to learn from the best. This year’s ranking comes at a time of continued turbulence in the retail market. A significant number of retailers that appeared in last year’s list, such as Toys R Us and Maplin, are no longer trading. Others, such as House of Fraser, have failed but subsequently been bought out of administration and continue to operate under new ownership. Many more are going through transformation plans that they believe will better equip them for the future. At the heart of this crisis, or revolution, in retail is the changing way that shoppers now want to buy. Customers are now more willing to complete their retail errands online, and they’re also uncertain about spending at a time of political uncertainty, in the light of Brexit. These shifts, combined, will no doubt mean more challenges to members of our Top500 lie ahead. We’ll be monitoring through our research and news analysis through the year how retailers respond to those challenges. But, for now, our congratulations go both to this year’s Elite retailers, Amazon, Argos, H&M, John Lewis, New Look and Sainsbury’s, and to all members of the IRUK Top500.
IAN JINDAL, EDITOR-IN-CHIEF
INTERNETRETAILING.NET/IRUK ◉ 3 OUR METRICS
Our research covered seven Performance Dimensions (see page 25 for more details):
0. FOOTPRINT: UK retail turnover, ecommerce turnover, web reach and store estate of retail businesses give the ‘heft’ and a preliminary rank. We then modify and weight that analysis through consideration of the following Dimensions: 1. STRATEGY & INNOVATION: the extent to which the retailer is adapting for growth, international commerce and customer responsiveness 2. THE CUSTOMER: measuring the experience from the customer’s point of view 3. OPERATIONS & LOGISTICS: delivery, returns, collections 4. MERCHANDISING: displaying and describing 5. BRAND ENGAGEMENT: making their brands familiar to the customer and connecting with them 6. MOBILE & CROSS-CHANNEL: beyond single ecommerce or store channels
PERFORMANCE CLUSTERS We’ve ranked the UK Top500 in statistically similar groups. Elite retailers have performed at an exceptional level across all Dimensions, statistically separate from the subsequent clusters. In 2019 they are Amazon, Argos, H&M, John Lewis, New Look and Sainsbury’s. Our congratulations to new entrants H&M, New Look and Sainsbury’s, to returning 2017 Elite retailer John Lewis, and to Amazon and Argos on retaining their positions from last year. Top50 retailers bring us to the 50-retailer point and represent the current standard of UK best practice in ecommerce and multichannel retailing, exemplifying RetailCraft at its best. Between the Top100 and the Top500, retailers are grouped in a way that expresses their measured performance in a way that goes beyond their variation in size, reach and turnover. Throughout 2019, we will be continuing our testing and measurement of the whole group, with our findings contributing to the 2020 ranking.
JUDGEMENT Our current system started with the IRUK Top500 in 2015. Since then, research methods and metrics have developed steadily. The criteria regarded as cutting edge this year will necessarily differ from those of last year, since many one- time innovations have now moved firmly mainstream.
KNOWLEDGE PARTNERS We thank Edge by Ascential (formerly Brand View) for sharing data on the Top500’s price strategies and the information they provide on product pages; BuiltWith for tracking the Top500’s websites and providing information on the software used, such as ecommerce platform and payment methods; Hitwise for sharing data on website interaction and visitor demographics; and Eggplant for measuring the performance and load times of Top500 websites on mobile and desktop browsers. We are also grateful to Return Path for measuring retailers’ use of email, including how often they send emails, and the open, deletion and marked-as-spam rates of those campaigns. We thanks SimilarWeb for sharing data on the visits and interaction that Top500 websites receive.
ELITE RETAILERS Congratulations once more to the InternetRetailing UK Top500 Elite retailers for 2019: Amazon, Argos, H&M, John Lewis, New Look and Sainsbury’s.
IAN JINDAL, EDITOR-IN-CHIEF, INTERNETRETAILING
4 ◉ INTERNETRETAILING.NET/IRUK CONTENTS & CONTRIBUTORS
Contents MEET THE TEAM
CHLOE RIGBY THE INTERNETRETAILING UK TOP500 ...... 06 EDITOR Chloe is the editor of ELITE AND LEADING RETAILERS ...... 08 InternetRetailing.net and an award- winning business journalist. NEW AND BUBBLING UNDER ...... 09 [email protected] MARTIN SHAW BRANDS: SELLING DIRECT ...... 10 HEAD OF RESEARCH, RETAILX Martin devises the scope and methods FROM OUR PARTNER ...... 11 of InternetRetailing’s research.
STRATEGY AND INNOVATION: PERFORMANCE PLANNING ...... 12 [email protected] FERNANDO SANTOS THE CUSTOMER: EXPERIENCE AND USABILITY ...... 14 RESEARCH PROJECT MANAGER, RETAILX Fernando co-ordinates the timelines OPERATIONS AND LOGISTICS: DELIVERY, COLLECTION AND RETURNS ...... 16 for our research team.
MERCHANDISING: SHOWCASE PRODUCTS ACROSS CHANNELS ...... 18 [email protected]
BRAND ENGAGEMENT: RELATIONSHIP DEVELOPMENT ...... 20 IAN JINDAL EDITOR-IN-CHIEF MOBILE AND CROSS-CHANNEL: JOINING ONLINE AND THE STORE ...... 22 Publisher, speaker, advisor and NED, Ian leads our editorial and WHAT CONSTITUTES A RETAILER? ...... 24 research businesses. [email protected] GROWTH 2000 ...... 27
MULTICHANNEL IN CONTEXT: FOCUS ON DEPARTMENT STORES ...... 28
THE INTERNETRETAILING UK TOP500 AROUND THE WORLD ...... 29
KNOWLEDGE PARTNERS ...... 30
CONCLUSION ...... 31
INTERNETRETAILING.NET/IRUK ◉ 5 THE IRUK500
THE ELITE OF 2019: AMAZON, ARGOS, H&M, JOHN LEWIS, NEW LOOK, SAINSBURY’S InternetRetailing congratulates all the members of the Top500 in 2018 as leaders in UK multichannel and ecommerce retailing. This list was put together through an assessment of retailers’ size and performance. For more detail on the research parameters see page 25.
Amazon Elite Apple Top_100 Accessorize Top_150 AllSaints Top_250 Lakeland Top_250 Argos Elite Bonmarché Top_100 Adidas Top_150 AppliancesDirect Top_250 Lands' End Top_250 H&M Elite Boohoo.com Top_100 Andertons Music Top_150 Avon Top_250 Lego Top_250 Boux Avenue Top_100 John Lewis Elite Beaverbrooks Top_150 Banana Republic Top_250 Levi's Top_250 Clarks Top_100 New Look Elite Blacks Top_150 Bathstore Top_250 Links of London Top_250 Cotswold Outdoor Top_100 Burton Menswear Top_150 Sainsbury's Elite Cotton Traders Top_100 Bensons for Beds Top_250 Lloyds Pharmacy Top_250 Claire's Top_150 American Golf Leading Disney Store Top_100 Boden Top_250 Long Tall Sally Top_250 Decathlon Top_150 Ann Summers Leading Dorothy Perkins Top_100 The Body Shop Top_250 LookFantastic Top_250 Early Learning Centre Top_150 Ao.com Leading Estée Lauder Top_100 BonPrix Top_250 Louis Vuitton Top_250 eBay Top_150 B&Q Leading Euro Car Parts Top_100 Bravissimo Top_250 Lovehoney Top_250 Ellis Brigham Top_150 Everything5pounds.com Top_100 Boots Leading Mountain Sports Burberry Top_250 Machine Mart Top_250 Fat Face Top_100 Currys PC World Leading The Entertainer Top_150 Carpetright Top_250 MajesticWine Top_250 Footasylum Top_100 Debenhams Leading Cath Kidston Top_250 Mango Top_250 Fragrance Direct Top_100 Fashion World Top_150 Evans Cycles Leading Charles Tyrwhitt Top_250 Massimo Dutti Top_250 The Fragrance Shop Top_100 Feelunique.com Top_150 Halfords Leading Freemans.com Top_100 Foot Locker Top_150 Clas Ohlson Top_250 Mint Velvet Top_250 House of Fraser Leading Game Top_100 Getthelabel.com Top_150 Coast Top_250 Molton Brown Top_250 Go Outdoors Top_100 JD Sports Leading Goldsmiths Top_150 The Cotswold Company Top_250 Musto Top_250 Grattan Top_100 JD Williams Leading H.Samuel Top_150 Crew Clothing Top_250 The North Face Top_250 Marks & Spencer Leading Hobbycraft Top_100 Company NotOnTheHigh Top_250 Joules Top_150 Mothercare Leading Homebase Top_100 Diesel Top_250 Street.com L'Occitane Top_150 Next Leading Hugo Boss Top_100 Dr. Martens Top_250 Novatech Top_250 Iceland Top_100 MAC Cosmetics Top_150 Screwfix Leading Ebuyer.com Top_250 Offspring Top_250 Kaleidoscope Top_100 Mamas & Papas Top_150 Tesco Leading Ernest Jones Top_250 Orvis Top_250 LaptopsDirect Top_100 Matalan Top_150 Wickes Leading Evans Top_250 Oysho Top_250 Littlewoods Top_100 Millets Top_150 Farfetch Top_250 Paul Smith Top_250 Wilko Leading M&Co Top_100 Missguided Top_150 Figleaves.com Top_250 Pavers Top_250 Asda Top_050 Mainline Menswear Top_100 Monsoon Top_150 Peacocks Top_250 Asos Top_050 Marisota Top_100 Mountain Warehouse Top_150 Fortnum & Mason Top_250 Axminster Top_050 Microsoft Top_100 Nike Top_150 Foyles Top_250 Phase Eight Top_250 Beauty Bay Top_050 Miss Selfridge Top_100 Oliver Bonas Top_150 Furniture Village Top_250 Pull & Bear Top_250 Carphone Warehouse Top_050 Ocado Top_100 Paperchase Top_150 Gabor Top_250 RS Components Top_250 Chain Reaction Cycles Top_050 Russell & Bromley Top_250 Overclockers UK Top_100 Post Office Shop Top_150 Gant Top_250 Dune London Top_050 PartyCity Top_100 Ryman Top_250 PrettyLittleThing Top_150 GAP Top_250 Dunelm Top_050 Pets at Home Top_100 Samsung Top_250 Quiz Top_150 Gear4music.com Top_250 Forever 21 Top_050 Radley Top_100 Skechers Top_250 Harrods Top_250 Holland & Barrett Top_050 Reiss Top_100 Reebok Top_150 Slaters Top_250 Harvey Nichols Top_250 Jacamo Top_050 Sally Top_100 Richer Sounds Top_150 Specsavers Top_250 Robert Dyas Top_150 Hawkshead Country Top_250 Karen Millen Top_050 Seasalt Cornwall Top_100 Wear SportsBikeShop Top_250 Selfridges Top_100 Route One Top_150 Laura Ashley Top_050 Hobbs London Top_250 Ted Baker Top_250 Shoe Zone Top_100 Skatehut.co.uk Top_150 Morrisons Top_050 Home Bargains Top_250 Tessuti Top_250 Moss Bros. Top_050 size? Top_100 SportsDirect.com Top_150 Hughes Electrical Top_250 Thomann Top_250 Nisbets Top_050 Smyths Toys Top_100 Sweaty Betty Top_150 Ikea Top_250 Thomas Sabo Top_250 Oasis Top_050 Superdry Top_100 TK Maxx Top_150 Interflora Top_250 Thorntons Top_250 Office Top_050 Topps Tiles Top_100 Topshop Top_100 Toolstation Top_150 ITS Top_250 Tiffany & Co. Top_250 The Perfume Shop Top_050 Travis Perkins Top_100 Topman Top_150 Jack & Jones Top_250 TJ Hughes Top_250 River Island Top_050 Ugg Top_100 Vans Top_150 Jack Wills Top_250 UK Ecig Store Top_250 Schuh Top_050 Uniqlo Top_100 Victoria's Secret Top_150 Jessops Top_250 USC Top_250 Simply Be Top_050 Urban Outfitters Top_100 Victorian Plumbing Top_150 Jigsaw Top_250 Wallis Top_250 Space.NK Top_050 Wex Photographic Top_100 The White Company Top_150 JoJo Maman Bébé Top_250 Watch Shop Top_250 Superdrug Top_050 White Stuff Top_100 Kurt Geiger Top_250 Wayfair Top_250 Very Top_050 Wiggle Top_100 Whittard of Chelsea Top_150 La Redoute Top_250 Waitrose Top_050 Yours Clothing Top_100 WHSmith Top_150 Whistles Top_250 Waterstones Top_050 Zara Top_100 The Works Top_150 Laithwaite's Top_250 Zalando Top_250
6 ◉ INTERNETRETAILING.NET/IRUK THE IRUK500
Abercrombie & Fitch Top_350 IronmongeryDirect Top_350 & Other Stories Top_500 Garmin Top_500 Photobox Top_500 Aldo Top_350 Jaeger Top_350 Abel & Cole Top_500 Geox Top_500 Planet Organic Top_500 AliExpress Top_350 Jimmy Choo Top_350 Adobe Top_500 Glasses Direct Top_500 Playstation Store Top_500 Anthropologie Top_350 Jones Bootmaker Top_350 Agent Provocateur Top_500 Google Top_500 Plumbase Top_500 Arco Top_350 JYSK Top_350 Aldi Top_500 GoPro Top_500 Prada Top_500 Aria Technology Top_350 L.K.Bennett Top_350 American Eagle Top_500 Grailed Top_500 Pretty Green Top_500 Bershka Top_350 Lacoste Top_350 Armani Top_500 Graze Top_500 Printing.com Top_500 Blackwell's Top_350 Leekes Top_350 Asics Top_500 Habitat Top_500 Ralph Lauren Top_500 The Book People Top_350 Lush Top_350 Aspinal of London Top_500 Hattons Top_500 Rapha Top_500 Bose Top_350 Made.com Top_350 Asus Top_500 Hawes & Curtis Top_500 RedBubble Top_500 Bottega Veneta Top_350 MandM Direct Top_350 ATS Euromaster Top_500 Heal's Top_500 Regatta Outdoor Top_500 Burton Top_350 MatchesFashion.com Top_350 Austin Reed Top_500 Hermès Top_500 Clothing Calendar Club Top_350 Max Spielmann Top_350 Bang Good Top_500 Hobby Link Japan Top_500 Rich Tone Music Top_500 Calvin Klein Top_350 MenKind Top_350 Barbour Top_500 Home, Beauty & Gift Top_500 Romwe Top_500 Cass Art Top_350 Mobile Fun Top_350 bareMinerals Top_500 Shop The Royal Mint Top_500 CeX Top_350 Moda in Pelle Top_350 Barker & Stonehouse Top_500 In The Style Top_500 Scotch & Soda Top_500 Chaos Cards Top_350 Mole Valley Farmers Top_350 Belkin Top_500 J Crew Top_500 Scribbler Top_500 Charles Clinkard Top_350 Monki Top_350 Bettys Top_500 Jewson Top_500 ScS Top_500 Cloggs Top_350 Montblanc Top_350 Build-A-Bear Top_500 JML Top_500 See Tickets Top_500 Workshop Costco Top_350 Moonpig Top_350 Joe Browns Top_500 Select Top_500 Card Factory Top_500 CycleSurgery Top_350 Mr Porter Top_350 John Smith's Top_500 Sevenoaks Sound Top_500 Clinique Top_500 and Vision Deichmann Top_350 Mulberry Top_350 JTF Top_500 Sneakersnstuff Top_500 Demon Tweeks Top_350 Myprotein Top_350 The Co-operative Top_500 Juno Records Top_500 Electrical Steam Top_500 Desigual Top_350 Nespresso Top_350 K√§rcher Top_500 Converse Top_500 Studio (Express Gifts) Top_500 DFS Top_350 Net-A-Porter Top_350 Kate Spade Top_500 COS Top_500 Sunglass Hut Top_500 Dior Top_350 Nordstrom Top_350 Kenzo Top_500 Outdoor & Country Top_350 Crabtree & Evelyn Top_500 Supreme Top_500 Dreams Top_350 Kiehl’s Top_500 Dulux Decorator Top_350 Pandora Top_350 Craghoppers Top_500 Swatch Top_500 Kitbag.com Top_500 Centres Puma Top_350 Cromwell Top_500 Tate Shop Top_500 Lenovo Top_500 The Edinburgh Top_350 QVC Top_350 Cult Beauty Top_500 Thomas Pink Top_500 Woollen Mill Liberty Top_500 The Range Top_350 Dell Top_500 Timpson Top_500 END. Top_350 LightInTheBox Top_500 Rohan Top_350 Denby Top_500 Tommy Hilfiger Top_500 Esprit Top_350 Lindex Top_500 Roman Originals Top_350 Digikey Top_500 TomTom Top_500 F.Hinds Top_350 Logitech Top_500 Scan Top_350 Distinctive Doors Top_500 Triumph Top_500 Fendi Top_350 Lululemon Top_500 Snow+Rock Top_350 Dobbies Garden Top_500 Under Armour Top_500 Field & Trek Top_350 SoleTrader Top_350 Centres Mennace Top_500 United Colors of Top_500 Fitness Superstore Top_350 Staples Top_350 Dover Street Market Top_500 Michael Kors Top_500 Benetton Fossil Top_350 Stella McCartney Top_350 Ecco Top_500 Mobile Phones Direct Top_500 Versace Top_500 French Connection Top_350 Stradivarius Top_350 Epson Top_500 Monica Vinader Top_500 Viking Top_500 Games Workshop Top_350 Superga Top_350 Farrow & Ball Top_500 Muji Top_500 Virgin Wines Top_500 Gucci Top_350 Surfdome Top_350 Firebox Top_500 Muscle Food Top_500 VitalSource Top_500 Guess Top_350 Swarovski Top_350 Fired Earth Top_500 Music Magpie Top_500 Warren James Top_500 Guitarguitar Top_350 T.M. Lewin Top_350 Fitbit Top_500 Naked Wines Top_500 Watchfinder Top_500 Hackett Top_350 Toolstop Top_350 Flannels Top_500 Neptune Top_500 Wedgwood Top_500 Hamleys Top_350 Trespass Top_350 Footpatrol Top_500 New Balance Top_500 Weekday Top_500 Harveys Top_350 Tripp Top_350 Forbidden Planet Top_500 Nintendo Top_500 Weldricks Pharmacy Top_500 hmv.com Top_350 Vape Club Top_350 Fraser Hart Top_500 Oakley Top_500 West Elm Top_500 Hollister Top_350 Warehouse Top_350 Fred Perry Top_500 The Original Factory Top_500 Wish Top_500 Shop Hotter Top_350 Watches of Switzerland Top_350 funkypigeon.com Top_500 Wyevale Garden Top_500 HP Top_350 Wynsors World of Shoes Top_350 G-Star Raw Top_500 The Outnet Top_500 Centres The Idle Man Top_350 Yankee Candle Top_350 GAK Top_500 Philips Top_500 YesStyle Top_500
INTERNETRETAILING.NET/IRUK ◉ 7 ELITE AND LEADING RETAILERS
Leading the way In this sixth year of the IRUK Top500, we take a look at which retailers top this year’s ranking and at how that picture has changed over the years – and discover which one name has been in the top group every year so far
It’s now more than half a decade since the first IRUK stores since 2016. Prior to that, five department stores Top500 index was produced and since the UK’s ecommerce featured. This year the number has fallen to three, perhaps and multichannel traders were first grouped into as fashion retailers – selling their own-brand goods – have categories, led by the Elite and Leading retailers of the successfully challenged for a place for the first time. year. These retailers won their places for both the size of their ecommerce and multichannel businesses, and for their performance across InternetRetailing Performance LEADING RETAILERS Dimensions. Just one retailer has appeared in the cutting- To date, 45 retailers have appeared in the Leading group of edge Elite group every year. So far, 12 retailers have won the IRUK Top500. Retailers that have not yet fallen below the title of Elite and 45 have appeared in the list of Leading Leading in the index include Debenhams, Halfords and retailers, exemplifying the standard of what we term House of Fraser, which has overcome administration and ‘RetailCraft’. Here we take a look at how these groups have temporary website closure to retain its place in the Leading been made up. group this year. New-for-the-first-time entrants to this year’s Leading group include American Golf, JD Williams, JD Sports, Ann Summers and Evans Cycles. ELITE RETAILERS Amazon retains its place in the Elite of the IRUK Top500 2019 for the fifth consecutive time. The mammoth US merchant is the only retailer operating in the UK to WHAT IT MEANS TO BE ELITE CHANGES win this distinction. In 2019, it is joined by Argos, H&M, John Lewis, New Look and Sainsbury’s. Argos and John EVERY YEAR, MOST NOTABLY BECAUSE THE Lewis both feature in the listing for their fourth year, but H&M, New Look and Sainsbury’s all win the top METRICS MEASURED IN THE STRATEGY & ranking for the first time. And while New Look (four times) and Sainsbury’s (three times) have both previously INNOVATION PERFORMANCE DIMENSION been repeatedly ranked in the Leading group, H&M has moved straight to the Elite. Last year it was ranked as a VARY Top50 retailer. It’s worth noting here that what it means to be Elite changes every year, most notably because the metrics measured in the Strategy & Innovation “How we assess the IRUK Top500 retailers, and therefore Performance Dimension vary. Argos and Sainsbury’s are judge which are the Elite and Leading companies, changes part of the same group and both benefit in this year’s from year to year as we drop metrics that are no longer research from their ability to use each other’s stores to relevant, and recognise the importance of new features, enable their customers to pick up online orders. This may functionality and strategic priorities through new metrics,” ultimately prove to be a temporary effect. said Martin Shaw, head of research at RetailX. “Despite Three of this year’s Elite, Amazon, John Lewis and this, it’s notable that the membership of the top groups has Argos, can be classed as ‘department’ retailers, selling remained consistent over the years. It’s likely that reflects products from several different categories. Sainsbury’s is the consistent performance of the retailers themselves, as predominantly a grocer, and Amazon can also be classed they adapt and improve in order to meet the new challenges as one following its own expansion into grocery delivery, a of the market. Those who were always innovative have fact that underlines the virtuosity of this retailer. New Look mostly remained so, while others are raising their game to and H&M are firmly in the fashion and footwear categories. win inclusion in the higher reaches of the ranking for the The Elite group has consistently featured four department first time.”
8 ◉ INTERNETRETAILING.NET/IRUK NEW AND BUBBLING UNDER
New and bubbling under New retailers enter the IRUK Top500 each year, but many more lie just on the other side of the Top500 borderline. Here we list the 75 new members for 2019 and the ‘bubbling under’ British retailers that are close to featuring in the index. This ‘bubbling under’ group is the largest in the Growth 2000 index (see page 10 for more), and its 150 members will feature in the 2019 edition of that research.
NEW THIS YEAR American Eagle GoPro Logitech Scotch & Soda Beauty Bay Grailed Lululemon Scribbler Bottega Veneta Hermés Mennace Studio (Express Gifts) Clinique Hobby Link Japan Michael Kors Supreme Cult Beauty In The Style Moda in Pelle Virgin Wines Denby IronmongeryDirect Music Magpie VitalSource Desigual JML Nintendo Weldricks Pharmacy Digikey JTF Nordstrom West Elm Distinctive Doors JYSK Oakley YesStyle Epson Kate Spade Philips Geox Lenovo Romwe
BUBBLING UNDER Acne Studios Eve Sleep Massdrop Sofa.com AllBeauty Eventim Merlin Cycles SofasWorld American Apparel Fashion Nova Military 1st SportPursuit Angling Direct Feather & Black MissPap SportsShoes.com APC Find Me A Gift Mobiles.co.uk Ssense Approved Food FitFlop Nasty Gal Stanley Gibbons Armani Exchange Gamiss National Trust Shop Sterling Furniture Baker Ross GearBest Newegg StubHub Balenciaga Gemporia OKA SuperBuy Berry Bros. & Rudd Get Me In OnePlus Superfi Black Circles GettingPersonal.co.uk Oponeo Tails Blinds2Go Green Man Gaming Patagonia Teespring Bodum Gymshark Patrol Base Thompson & Morgan Bondara Hawkin's Bazaar PC Specialist Ticketmaster Box.co.uk Heinnie Haynes Pepe Jeans London Tiso Bradfords Hema Personalised Gift Shop TLC Electrical Supplies Brandon Hire Hornby PeruvianConnection Toast Browns Fashion Hotline Peter Christian Tredz Bulk Powders HTC Premier Man UK Flooring Direct The Cambridge Satchel Company I-sells Pro-Direct Urban Industry Camper Ideal World Professional Music Techology Vero Moda Carhartt iHerb Protyre Viagogo CCL Computers Instant Print QD Stores VictoriaPlum.com Chemist Direct Japan Centre Rajapack Vivienne Westwood Christian Louboutin Joy Razer Wacom Clintons Just Last Season Reserved Walls and Floors Coach Kwik Fit Reverb WeirdFish Complete Care Shop La Perla Rokit Western Digital Corsair Leisure Lakes Bikes Rose Gal The Whisky Exchange Crocs Linzi Rowlands Pharmacy Wolf & Badger Cruise Liz Earle Samuel Windsor Wolseley Dolls Kill Loaf SecretSales Wordery DronesDirect Loro Piana ShopTo Yoox Dunnes Stores Loveknitting.com Skagen YvesSaintLaurent EMP Lyle & Scott Smythson Zavvi EnvatoMarket Magic Madhouse Snapfish Zee & Co eSpares Manfrotto Society6 Euronics Marc Darcy SockShop
INTERNETRETAILING.NET/IRUK ◉ 9 FOCUS ON BRANDS
Brands selling direct The success of direct-to-consumer brands is reflected in the latest IRUK Top500 research, where a record number are included
The rise of direct-selling brands continues in 2019. The improving in the Merchandising Dimension, for example, IRUK Top500 2019 includes a record number of brands, where RetailX research found more brands enabling listed both for their size and for their performance. In visitors to their mobile web to zoom in on images. There the IRUK Top500 2015 report, 151 – or 30% – of those was a 14 percentage point (pp) growth in the use of this listed were brands, selling their own products direct to feature among the 133 retail brands that appeared in the consumers, rather than retailers selling products produced IRBX in both 2018 (56%) and 2019 (70%). by third-party businesses. The number of brands dipped to 144 (29%) in 2016, but ever since then has grown steadily, rising to 165 brands (33%) in 2017, 169 brands (34%) in 2018, and in 2019 there are 177 BRANDS ARE BECOMING MORE EFFECTIVE brands, accounting for 35% of all those included in the index. Direct-selling brands that have long been listed in the IRUK IN THEIR SELLING TECHNIQUES Top500 include Apple, New Look and H&M, the latter two names named as Elite retailers this year for the first time. Clinique is among the new arrivals in this year’s index. The use of next-day delivery grew too – by 8pp to 35% in This slow but steady growth is also seen in the IREU 2019 – while 6pp more brands enabled shoppers to return Top500 index of European retailers. That list featured 96 their online orders to store in 2019 (52%) than in 2018 brands in both 2016 and 2017, but in 2018 grew by 11.5%, (46%). However, the use of next-day collection fell, to 14% compared to the previous year, to 107 brands. That’s in 2019 from 30% in 2018 of the 147 retail brands measured equivalent to 21.4% of all those listed. in both periods. This drop, however, is broadly in line with The steady growth of this group suggests that the what we’ve measured across non-brands as well. presence of brands in the IRUK Top500 is growing at the Another fall was seen in the proportion of direct-selling expense of retailers that sell products made by other brands enabling shoppers to share an item with their businesses. Since last year, for example, retailers including friends via social media. Among 147 brands measured Toys R Us and Maplin have gone out of business, while in both years, 16pp fewer enabled social sharing on the still more have slipped out of the Top500 – the largest product page in 2019 (37%) than in 2018 (53%), while the 500 ecommerce and multichannel retailers are chosen use of social ‘likes’ to illustrate a product also fell to 18% in according to criteria shown on page four. As brands have 2019 from 23% in 2018. gained ground within the index, retailers have, conversely, lost ground. If back in 2015 they accounted for 70% of the index, today 65% of those listed are retailers which predominantly sell goods that don’t carry their own brand. Allied to that is the related suggestion that brands are becoming more effective in their selling techniques. That’s likely to be leading to higher sales, profits and performance – and an IRUK Top500 listing.
HOW BRANDS HAVE IMPROVED Research carried out for the upcoming InternetRetailing Brand Index – IRBX 2019 – of European direct-selling brands shows some of the metrics on which brands are improving their performance. These extend across Performance Dimensions. Product presentation is
10 ◉ INTERNETRETAILING.NET/IRUK PARTNER PERSPECTIVE
Only the smoooth survive The biggest retail trends of 2019 are going to be driven by two key things: choice and convenience. Finding ways to keep shoppers interested in, and loyal to, your brand remains a pressing priority, but those that align to the Klarna mantra of smoooth (yes, so smoooth we need 3 o’s) will find a significant payoff.
The most successful online retailers — those that appear Only once retailers are confident that they have an in the IR UK500 — know the dedication and customer-first exceptional foundation, should they consider enhancement focus that it takes to win. Here are our recommendations for via next-gen tech. Our research into the future of fashion retailers to boost sales and take your retail business to the technology revealed that half of fashion retailers want to next level in the coming year: invest in high-tech features such as Augmented Reality (AR) and Virtual Reality (VR), even though 4 in 5 shoppers say they wouldn’t be interested in using it. EXPAND THE PAYMENTS PORTFOLIO Retailers can’t afford to ignore the more innovative payment options in the market. And the lack of flexible and fast PERFECT THE MULTI-CHANNEL JOURNEY payments is especially frustrating to online and mobile Multi-channel retailing isn’t new. Whether through shoppers, who want to be in and out of a transaction swiftly. catalogues or online, retailers have always had ways of Having more financial choice is proven to be beneficial for reaching their customers outside of physical stores. What is both retailers and shoppers alike. In fact, a recent study we changing, however, is the heightened demand for a seamless carried out revealed that over half (53%) of shoppers want shopping experience within and between the different new and easier ways to pay online, while 56% would buy channels. Our research revealed that 46% of shoppers think more online if there was more variation in payment options online shopping is more convenient than in-store, and that available. Alternative payment methods such as Klarna – almost half (49%) miss the personalisation that online offers which lets shoppers pay later for their items after they’ve when shopping in-store — this rose to 69% amongst 16-24 arrived on their doorstep – fulfils the shopper’s desire to “try year olds. Retailers must take note that no one channel before they buy.” Klarna seamlessly bridges the infamous holds the key to success; diversifying the journey — and offline-online gap, removing a key barrier to purchase. recognising and integrating the most attractive elements of both routes — is what matters. Ultimately, the goal for retailers is to build a great BOOST EXPERIENCE WITH EXCEPTIONAL BASICS experience that is convenient for customers, no matter how, Retailers are increasingly realising that they need to offer where or when they are choosing to shop. And in 2019, only consumers more than just an outlet to shop. They need the smoooth will survive. to provide an exciting and convenience-centric overall experience, starting with the basics. ABOUT KLARNA Many make the mistake of thinking that to make a real It’s all about smoooth (yes, with 3 ooo’s). Klarna is difference, they must roll out the latest buzzy tech tools and Europe’s leading payments provider and a newly- platforms to wow consumers — often at great expense. But licensed bank, which wants to revolutionise the the fact remains that no flashy technology can compensate payment experience for shoppers and merchants for inconvenience in the customer journey. alike. Founded in Stockholm, Sweden, in 2005, the It’s crucial that retailers consider the whole shopping fintech unicorn gives online consumers the option to experience — from browsing through to purchase, delivery pay now, pay later or over time – offering a trusted, and returns. This journey needs to be simple and frictionless, frictionless and smoooth checkout experience. otherwise consumers will turn to a competitor out of LUKE GRIFFITHS Klarna now works with 100,000 merchants, including GM, KLARNA UK frustration. Perfecting the basics such as a fast checkout, ASOS, Topshop, H&M and JD Sports in the UK, to mobile-optimisation, one-click repeat purchasing, easy offer payment solutions to users across Europe and North America. Klarna has 2,000 returns and multiple payment options is fundamental to employees and is active in 14 countries. customer retention.
INTERNETRETAILING.NET/IRUK ◉ 11 STRATEGY & INNOVATION
Thinking across channels Leaders in this field offer joined-up services, from start to finish of the shopping journey
The retailers that stand out in the IRUK Top500 Strategy & Retailers enabled shoppers to get in touch via an average Innovation Dimension deploy new techniques and services to of 9.5 communication channels - from email and by phone offer shoppers a flexible and convenient shopping experience to a range of different social media platforms. On Twitter, – however they choose to buy. These traders get ahead of the shoppers had an average of 219,000 followers: larger crowd by innovating, and they maintain that leading position retailers have much larger followings however, since the by consistently building on their performance, developing median number was just over 30,000. services that work to join up their sales channels, and to Considering how easy retailers made it for shoppers to find improve the way that channels and sales processes operate. an item on their mobile website, 58% offered autocomplete RetailX researchers assessed Top500 retailers against dropdown suggestions when shoppers searched, while 82% more than 30 wide-ranging metrics that they consider had the hamburger button - the three-line navigation aid strategically important and which take the customer that makes it easier to get around mobile websites. That was from the beginning to the end of the shopping journey. down from 93% last year but remained the clear standard. That starts with judging availability and quality of service At product-level, shoppers could view an item through across different channels – how quickly it loads on mobile an average of 3.8 images on a desktop website, and four and on desktop – and whether a retailer offers an Android images on a mobile website. More than half of retailers (59%) or iOS app. Next, researchers judged how easy it was to enabled shoppers to zoom in on product images. Cross- find a product on the website, using search and navigation selling, by recommending similar products, was offered by tools and assessed the level of personalisation present 71% of retailers. Well over half (59%) enabled shoppers to in recommendations. Merchandising metrics such as save items to a wishlist. how the quality of product information and the number Almost half of retailers (47%) had an iOS app, slightly more of product images illustrate how easily customers can than the 45% that had an Android app. see whether an item is the right one for them. Retailers’ Across the Top500, 58% of retailers offered next-day responsiveness to customer queries if assessed through delivery. Of the retailers that offer delivery and that were its use of social media and other communication included in the Top500 both this year and last year, 59% offered channels. The research concludes the shopping journey at next-day delivery in 2019, up by six percentage points from the the point of delivery, collection and return, assessing how 53% that offered it in 2018. The proportion of retailers offering easily a shopper can first take possession of the item, and same-day delivery stayed in line with last year, at 5%, while potentially return it if necessary. 16% offered nominated day delivery – up from 14% last year – Innovative services included same-day delivery and and 7% offered nominated time. Almost a third (30%) offered collection, as well as visual search. Saturday delivery, while 13% offered Sunday delivery. Well over half (60%) of Top500 retailers also offered collection, and 11% offered same-day collection. While WHAT THE TOP500 DO the proportion of retailers offering collection stayed flat, Top500 retailers win their place in the index by delivering a compared to last year, those offering same-day collection well-thought out shopping experience to their customers. was significantly down. Of those retailers that offered Here we take a look the tools they use in order to do that, collection in both years, 21% offered a same-day service starting with the speed with which their websites load. last year, compared to 14% this year. Among those offering Desktop websites were visually complete in an average collection, items were ready to pick up in an average of of 9.9s, while mobile websites were visually complete in an three days from the time of delivery, a figure that stayed average 9.2s. Among the retailers whose mobile websites the same as last year. Only 1% of Top500 retailers enabled were measured both in 2017 and 2018, visual completion shoppers to collect from their own lockers in their store, or took 14% longer in 2019 (8s) than in 2018 (7s), while page another store, in 2019: that’s down from 2% last year. Some sizes, measured in bytes, increased by 27%. Shoppers spent 49% enabled shoppers to return an item bought online to an average of 325 seconds – or 5.4 minutes – on a Top500 the store, while 16% enabled them to return an item via website, and a median of 289s - or 4.8 minutes. pick-up from the house.
12 ◉ INTERNETRETAILING.NET/IRUK STRATEGY & INNOVATION
YEAR ON YEAR PERFORMANCE OF THE TOP500 The Aggregated Index Value for each Performance Dimension for 2018 and 2019
250 Mobile & Cross-channel Strategy & Innovation
200
150
100
50
Brand Engagement The Customer
Early 2019 (current)
Merchandising Operations & Logistics Early 2018 RetailX 2019
We score performance in our tests and create an index value. The Aggregated Index is the sum of the test results and – while it has no inherent nominal meaning – it gives us a way to compare performance between years, since an increase in AIV represents an increase in measured capability and performance. This chart shows the areas in which performance has most markedly improved, and the overall quantum of improvement for the IRUK Top500 2019.
WHAT LEADING RETAILERS DO Fashion retailer H&M also offered visual search and Argos and Tesco both stood out in the research for predictive search, as well as a barcode scanner in its comprehensive delivery and collections services. They both mobile app. It also stood out for offering returns via pick-up offered services that most retailers did not, including same- from the house. day delivery and collection, as well as nominated time delivery. B&Q’s range of flexible services included returns via Next combined a flexible delivery and collection promise, pick-up from the house, nominated day delivery a store stock that included same-day delivery and collection as well as checker and predictive search. nominated time delivery, with a highly innovative visual A robust customer journey from health and beauty search capability. retailer Boots included nominated day delivery and same- Debenhams stood out for a flexible delivery offer – which day collection. It had an Android app, and offered predictive included nominated time and day options – and for the way search through its iOS app. it in which it made it easy for shoppers to find the items they Halfords made it easy for shoppers to find the products wanted to buy, through tools including a store stock checker they were looking for from its app, where it had a store and predictive search on the Debenhams mobile app. stock checker, a barcode scanner and offered predictive A varied range of cutting edge services helped to keep search and daily deals. Amazon ahead: customers could collect from its own Sainsbury’s had a strong delivery promise - including same- collection lockers or opt for same-day delivery. They could also day, nominated time and nominated day delivery. It also use visual search and live chat to aid their shopping mission. offered predictive search in its mobile app.
INTERNETRETAILING.NET/IRUK ◉ 13 THE CUSTOMER
Putting the customer first Shoppers enjoy good service and the customer experience when they visit retailers ranked highly in The Customer dimension
Traders that combine a first-rate customer experience with more quickly this year. A third (33%) responded slower; responsive service stand out in The Customer dimension. and 4% were almost the same. The fastest response times These leading retailers ensure that their customers’ came from those selling music, film and TV, while the shopping journey works for them, across the full range effectiveness of customer service by email was ranked of touchpoints. Whether shoppers visit their websites, highest in the grocery sector. download and use their apps, contact them through customer service channels or decide to return an item, it’s important that they can achieve their aim easily and effectively. That’s likely to be a deciding factor both for SAINSBURY’S STOOD OUT IN THIS whether they buy on the first occasion, and whether they DIMENSION FOR THE SPEED OF ITS are likely to come back to buy in the future. RetailX researchers assessed the customer service RESPONSE TO CUSTOMER ENQUIRIES ON promises that Top500 retailers make, and the quality of the customer experience through more than 40 metrics FACEBOOK that, taken together, give a multilayered picture of how well retailers respond to shoppers’ needs. This starts with how many communication channels retailers Facebook enquiries had a somewhat faster response, offer customers, and continues with an assessment of the in an average of 13 hours, and a median of five. Although quality of service across the channels. Customer service is faster than email, this was still several times slower measured through an assessment of both how fast and how than the median of 45 minutes for the same retailers last effectively traders respond to shoppers’ queries. Customer year. We aren’t sure of the reason for this change but experience is measured by how quickly websites – both mobile will continue to measure this aspect of customer service and desktop – load and by considering how well retailers over the year ahead. Retailers selling children’s toys and inform customers about the products they sell, and how easily accessories were highest rated for service, while consumer they enable them to find them. Researchers also gauged how electronics retailers were most highly rated for resolving easy and convenient the returns process was for shoppers. issues. The fastest response times on Facebook came from InternetRetailing Knowledge Partner SimilarWeb contributed those selling footwear. data measuring website visits, duration and page views. Turning to customer experience, desktop websites loaded in an average of 9.9s, while mobile websites loaded in 9.2s. Among the mobile websites measured both this year and WHAT THE TOP500 DO last year, sites loaded in an average of 7s in 2018,, and in On average, Top500 retailers enabled customers to get in 2019 in an average of 8s, while page size, measured in touch via 9.5 channels. Those selling homewares, drinks, bytes, increased by 27%. fashion footwear and children’s toys and accessories Visitors to Top500 websites spent an average five minutes were among those that offered shoppers a median of 11 viewing an average of nine pages, according to analysis channels to get in touch, including email, phone, web from InternetRetailing knowledge partner SimilarWeb. submission form, in-store, live chat, and a variety of More than half of retailers shared product ratings (54%) popular social networks. At the other end of the spectrum, and reviews (57%) on their desktop websites, while on their those selling automotive goods and utilities had a median mobile websites, 81% featured a ‘hamburger’ navigation of eight. button – down from 93% last year. Focusing on the end Retailers responded to a customer email in an average of of the shopping process, researchers found that retailers 18 hours – suggesting some instances of very slow service. enabled shoppers to return items for up to 34.5 days from The median response time was 10 hours. Of retailers the point of purchase, and then took an average of 11.9 measured both this year and last year, 63% responded days to process a refund. Some 98% said they would fully
14 ◉ INTERNETRETAILING.NET/IRUK THE CUSTOMER
THE TOP500’S MOBILE WEBSITES ARE BIGGER AND SLOWER
Time to visually complete (seconds) Page size (MB) Speed index Date 9 4 5000
8 Time to visually complete (seconds) 7 4000 3 6 Page size (MB) Speed index
5 3000 Average
4 2
3 2000
2
1 1 1000 Jun 2017 jul 2017 Jun 2018 jul 2018 Jun 2019 RetailX 2019 Retailers face competing demands to make their websites smaller and faster to appeal to a time-poor generation, and full of functionality to appeal to the same consumers. Top500 websites – including in desktop browsers, not shown here – have slowed down while also increasing in size. Speed Index is an aggregate measure of load time, incorporating the time taken to load each stage of the website. Lower values correspond to faster load times. Researched in collaboration with InternetRetailing Knowledge Partner Eggplant refund an unopened item, and 95% would refund original its mobile search was deemed highly relevant, while its shipping costs. navigation featured the hamburger button. Its service and issue resolution on Facebook were highly rated, and it processed returns quickly. WHAT LEADING RETAILERS DO B&Q supported a wide range of communication channels Sainsbury’s stood out in this dimension for the speed of – responding quickly on Facebook – and it shared reviews its response to customer enquiries on Facebook, replying and ratings on its desktop website. more quickly than 99% of the Top500, and for the choice New Look offered fast responses to both Facebook and of communication channels that it offered to customers. It email enquiries and shared product ratings. Its web visitors also shared product ratings. looked at a high number of pages per visit. Marks & Spencer won recognition for the extent to Wilko shared products ratings and reviews and supported which it shares feedback. It enabled product reviews and a high number of communication channels. It responded star-ratings on its mobile and desktop websites. The food- quickly to customer emails. to-homewares retailers also scored highly for its use of Iceland shared product ratings and reviews, and personalisation. shoppers looked at a high number of pages per web visit. Tesco was highly rated across a diverse range of Debenhams supported a wide number of channels, metrics, from its use of personalisation to the time it took shared product reviews and returned relevant search to process a refund and to respond to a Facebook query. results. Both Iceland and Debenhams responded quickly to Reiss performed strongly on mobile and on social media: Facebook enquiries.
INTERNETRETAILING.NET/IRUK ◉ 15 OPERATIONS & LOGISTICS
Delivering joined-up logistics Traders that meet demanding customer expectations stand out in the Operations & Logistics Dimension
Fast, free and convenient collection, delivery and returns The proportion of retailers offering same-day delivery are at the core of the fulfilment service that online and stayed in line with last year, at 5%, while 16% offered multichannel shoppers have now come to expect. It’s by nominated-day delivery, and 7% nominated-time delivery. meeting those exacting service expectations that retailers Grocers were especially prominent in this area. Some 13% stand out in the Operations & Logistics Performance of Top500 retailers offered Sunday delivery. Dimension this year. Saturday delivery was steady, with 31% offering the It’s notable that there’s little change at the top of the service at the beginning of 2019, the same as last year. The rankings this year, compared to last. Perhaps that’s median delivery cost stayed close to last year at £3.90, as because having gained an advantage through logistics did the threshold for free delivery (£40), and the standard processes that work, retailers are then more able to build delivery time frame (five days). on their success in the years that follow. Perhaps for the retailers that do not offer these services, it’s harder, or takes more time, to build the logistics processes that are WHAT THE TOP500 DO: COLLECTION needed. Indeed, some have stepped back from offering Six in 10 (60%) Top500 retailers enabled their customers to faster delivery and collection services. That said, across the collect a paid-for online order from a store, while a falling Top500, more retailers now have comprehensive delivery proportion – 6% – enabled them to reserve and collect, services than do not. This will shape shoppers’ expectations without paying. Those who offered collection did so from of the service they receive. In other words, customers’ an average of 623 stores, and a median of 59. The number expectations have been met by increasingly premium and of retailers offering next-day collection (23%) fell from last joined-up services, raising standards in an area that has year according to analysis that tracked the change among become a real point of differentiation in a competitive retailers included in both the 2018 and the 2019 Top500. market. But where once retailers stood apart when they In 2018, 43% offered next-day collection and in 2019, offered the speedy services that customers aspired to, now 29% did so. In 2019, 11% of the Top500 offered same-day it’s more noticeable when they don’t offer them. pick-up. Contrasting those retailers that were included RetailX researchers looked at retailers’ delivery, in the indexes both years, in 2018, 21% offered same day collection and returns promises for the 2019 edition of this collection, and in 2019, 14% did so. In 2019, the average research. As well as assessing the number and cost of standard fee for collection was £1.31, although most made the different options they offered, researchers also looked no charge: the median charge was zero, unchanged from at how quickly Top500 retailers promised to deliver to the the previous year. Retailers enabled shoppers to collect home or for collection, and at how easy they made it to their items in an average – and median – of three days, return an unwanted item, and to gain a refund. a figure that remained stable since last year. Just 1% of retailers offered shoppers the ability to collect their product from a locker that they own. That’s down from 2% last year. WHAT THE TOP500 DO: DELIVERY A third (34%) of retailers enabled shoppers to see stock Top500 retailers offered an average of three delivery availability on their mobile website, while 18% enabled options. Standard delivery cost £3.88 and took five days them to check if stock was available in-store. on average. More than half (58%) of retailers offered next-day delivery. That’s down by five percentage points from 63% WHAT THE TOP500 DO: RETURNS last year. In most sectors, at least half of retailers offered Top500 retailers enabled shoppers to return their unwanted next-day delivery within the UK. Notable exceptions were in online orders for an average of 35 days, although the median the trade tools, garden and books categories. By contrast, returns window stood at 27 days, down slightly from 28 days fashion and clothing retailers were more likely to do so, in 2018. Most (88%) enabled returns of unwanted online especially those selling sports clothing (67% of these returns through the post, while 48% supported returns to retailers offered next-day delivery) or footwear (65%). their store, 20% to a third-party returns point, and 16% via
16 ◉ INTERNETRETAILING.NET/IRUK OPERATIONS & LOGISTICS
THE DELIVERY COST PRICING STRATEGY OF THE TOP500
Free delivery on all orders Free delivery with minimum spend Paid delivery only
0 20 40 60 80 100 Direct-selling brands Sports equipment Grocery Cosmetics Jewellery Footwear All Top500 Tools and DIY Clothing Fashion accessories Children's toys Consumer electronics Garden Homeware Appliances Stationery and craft
RetailX 2019 Direct-selling brands are the retailers that subsidise delivery the most, with 65% offering free delivery with a minimum spend, and 20% offering at least one free delivery option for every purchase
pick-up from the house. The biggest year-on-year change Sainsbury’s was among the minority of Top500 was for those offering returns to a third-party point: of those retailers that offered same-day delivery, nominated day retailers included in the 2018 and 2019 Top500, 26% offered and time delivery, and returns via drop-off at a third- this service in 2018, but only 21% in 2019. party location. Almost all (98%) promised to fully refund an unopened Carphone Warehouse offered nominated day delivery returned item in 2019, while 95% refunded the original and Sunday delivery alongside next-day collection, while it shipping costs, and 22% offered pre-paid returns. Retailers also had a store stock checker on its desktop and mobile took an average 11.9 days to process a refund. website. Screwfix offered same-day collect and Sunday delivery alongside a store stock checker. WHAT THE LEADING RETAILERS DO The Perfume Shop was among the 11% of retailers that Argos and Tesco were among the few retailers that promised same-day collection, and the 29% that offered promised same-day delivery, reserve and collect as well as next-day collection. It also supported nominated time nominated time delivery. delivery and returns via drop-off at a third-party location. New Look offered nominated day and time delivery, Next’s broad delivery promise included same-day Sunday delivery and also had a store stock checker on its collection, same-day delivery as well as nominated time mobile website. delivery. It also enabled shoppers to check stock from its AO.com’s comprehensive delivery promise included mobile website. Sunday delivery, next-day collection and returns via pick-up American Golf offered reserve and collect, same-day from the house. collection, alongside nominated day and Sunday delivery.
INTERNETRETAILING.NET/IRUK ◉ 17 MERCHANDISING
Showing products in their best light Leading retailers use effective merchandising techniques to help shoppers find and understand products
Tools from visual search to product reviews, ratings and offered zoomable images on mobile – up from 51% last high quality images are deployed by retailers that stand year. out in the Merchandising Dimension. Many offered product recommendations either directly When such technologies are used effectively, shoppers or by enabling other customers to share their opinions. find it easier to use a website to find the product that Some 71% recommended products that were similar meets their needs – and then find out all about that item. products to the one on view – cross-selling – while 28% That’s even more important when they are using the used up-selling. Most featured product reviews (57%) and relatively small screen of a smartphone to buy. ratings (54%), while 30% enabled sharing with friends on RetailX researchers analysed leading retailers’ social media, and 8% offered the ability to ‘like’ products performance in merchandising through their use of on social media through links on the product page. search and navigation to help visitors find an item on Almost two in five (18%) retailers that were members a mobile or desktop website, and through the way they of the Top500 in 2018 and 2019 enabled liking on social enabled those visitors to explore products further. They media last year. Only 8% did so in 2019. assessed websites on their use of product descriptions, imagery, word-of-mouth social sharing, reviews and ratings, and the use of banners and information on promotions. Metrics on how long shoppers spent on a SEVEN IN 10 (70%) OFFERED DROPDOWN website and how many pages they viewed, as well as the website bounce rate, were also taken into consideration. SEARCH SUGGESTIONS ON THEIR DESKTOP InternetRetailing Knowledge Partner Edge by Ascential (formerly Brand View) shared insights into how effectively WEBSITE – 58% DID SO ON THEIR MOBILE the largest Top500 retailers used product images, videos, descriptions, as well as their promotional activity. WEBSITE
WHAT THE TOP500 DO Just over half (54%) featured obvious promotions on Merchandising tools that are widely used by Top500 their websites, but only 9% featured a ‘bestseller’ ribbon retailers include those that make it easier for shoppers on popular products. Use of the ribbon fell by almost a to find a product, whether by name or by narrowing down third between early 2018, when 14% used it, and 2019, their search through the use of filters. when only 8% of retailers ranked in both years used it. RetailX research found that (70%) offered dropdown Four in 10 used banner advertising on their mobile search suggestions on their desktop website – 58% did website. More than half (59%) enabled customers to so on their mobile website. save an item to a wishlist, and 53% had a store finder A variety of navigational filters were in use: 84% of on their mobile website. Just under half (46%) required 2019 Top500 retailers enabled filtering by product type, registration before checkout. Of the retailers that 76% by price, and 57% by brand. Search by price was were members of the Top500 this year and last year, slightly less widely used among those retailers who were 62% required registration in 2018, and 54% in 2019 – a in the Top500 both in 2018 and 2019. Last year, 85% of significant move towards making it easier for shoppers that group used the filter, while 82% had it in 2019. There to buy. Almost two-thirds (65%) offered alternative was greater uptake, however, of search by brand (+4 suggestions where a search term generated no results. percentage points) to 58%) and by product type (+3pp to Looking at retailers’ mobile apps, visual search was 85%). On mobile websites, 82% used a ‘hamburger’ easy supported by 5.4% of the 256 Top500 retailers that had navigation button, while 39% used infinite scroll. iOS apps, and augmented research by 1.5%. One in five Retailers showed an average of 3.8 product images – (21.5%) had a barcode scanner, while 29.1% supported rising to four on mobile websites. Well over half (59%) product reviews.
18 ◉ INTERNETRETAILING.NET/IRUK MERCHANDISING
HOW TOP500 PRODUCT PAGES CHANGED BETWEEN 2017 AND 2019
80% Related products suggested Save to wishlist User-generated product reviews 70% Links to share a product on social media Links to Like a product on social media 60%
50%
40%
30%
20%
10%
0% Jan 2017 Jan 2018 Jan 2019
There was significantly less emphasis on social media integration on the average Top500 retailer’s product page in 2019 than in 2017. Wishlists grew in popularity, with a 12 percentage point increase in take-up over the period. RetailX 2019
WHAT LEADING RETAILERS DO Marks & Spencer was recognised for the use of Individual retailers perfomed strongly in the merchandising merchandising on its mobile app. Features included dimension when they deployed effective but as yet less product reviews and ratings, the use of predictive search, widely used tools, and when they extended functionality and daily deals. across their mobile and desktop websites. Amazon won its place for its approach to merchandising Argos stood out for its use of merchandising tools on its products on both its mobile app and desktop website. The mobile website, including a physical store stock checker, retailer shared product videos and social media likes on written product reviews and rating through a star system. its app, which also featured visual search. It also used a Argos also scored highly for its use of personalisation. ‘bestseller’ ribbon on its desktop website. Boots stood out for the way it deployed merchandising on Currys PC World was recognised for its efforts to help mobile, where zoomable images and a store stock checker customers find a product that suits their needs. A relatively sat alongside product reviews, star ratings and predictive high percentage of its products had explanatory videos, search, making it easier for customers to find products via while it also offered alternative answers when a search of a small screen. its website found no results and it deployed upselling. It had H&M also used predictive search. It also stood out as one a store finder on its mobile website. of the 5% that offered visual search on mobile apps, while a Halfords’s mobile app shared social media likes and barcode scanner enabled shoppers to find out more about a product ratings, while it also helped customers find product from the home or the store. products and product information easily through the use of Wickes performed strongly across both desktop and predictive search and a barcode scanner. mobile websites, both of which featured a store finder. It Screwfix also performed strongly on mobile, sharing offered alternative suggestions when a product search product opinions through reviews and ratings, and offering found no results. predictive search and a store finder on its mobile app.
INTERNETRETAILING.NET/IRUK ◉ 19 BRAND ENGAGEMENT
Talking to customers Leading retailers give shoppers more choice in how they get in touch and ask questions
Retailers that enable conversations that both inspire followings, however, since the median number was just shoppers and answer their questions stand out in the over 30,000. Brand Engagement Dimension. At the forefront are traders But there’s also strong interest in using other social that engage with existing and potential customers across a media channels as well. Among the Top500 of 2019, 81% variety of channels. This matters because it’s by enabling had an Instagram profile, while 66% were on YouTube, shoppers to learn more about products and services that 55% on Pinterest and 5% on Snapchat. What other people traders can foster trust both in what they are selling, and thought about a product makes a difference to shoppers how they deliver on their promises. as they decide whether to buy, and most Top500 retailers In this Dimension, RetailX researchers focused on the showed product reviews (57%) and ratings (54%) on product communication channels – from social media to email pages. Retailers selling sports and outdoor equipment and phone – that retailers provide for shoppers, and on were the most likely to share product ratings (83%) and how they help customers learn from what others thought, reviews (81%). These features were least commonly or share their own thoughts with others. They evaluated deployed among those selling ready-made food, where 40% retailers’ reach and interaction on Twitter through metrics shared reviews and 38% ratings. including how many followers, retweets, and favourites they Fewer enabled customers to share their opinions via had, as well as how often they updated their status. social media than used product reviews and ratings. Almost Researchers also looked at whether Top500 retailers a third (30%) of 2019 Top500 retailers enabled users to required shoppers to register before checking out, share a product with friends on social media, while 8% something that helps retailers to improve their single view enabled them to ‘like’ a product on social media through of the customer but may deter shoppers from buying, a link on the product page. That’s changed since last year and certainly adds an extra point of friction that can slow when 53% of retailers included in the Top500 in both 2018 down the final transaction. They also considered how and 2019 Top500 enabled sharing via social media, and 18% many website visits Top500 retailers received during the enabled social media likes. In 2019, more than half (54%) of course of a year, as well as the bounce rate using data retailers showed obvious promotions on their website. from InternetRetailing Knowledge Partner SimilarWeb. How easy do Top500 retailers make it for shoppers Researchers deemed both to be key measures of shopper to buy? Almost half (46%) required registration before interest in the brand. purchase in 2019. The average Top500 retailer enjoyed 8.1m website visits a year – although the median figure was closer to 2.4m, WHAT TOP500 RETAILERS DO which demonstrates the disparity between ecommerce The 2019 analysis of Top500 retailers found that traders giants and the other retailers to feature in the Top500. enabled shoppers to get in touch with them via an average Software retailers had an average of 66.8m website visits of 9.5 and a median of 10 communication channels. That’s a year, and a median of 26.9m, followed by those selling up from a median of eight in 2018, and suggests that music, film and TV (41.9m average, 18.2m median). At most retailers added more options during the course of the other end of the scale, retail websites selling sports the last year. Those selling homewares, drink, fashion footwear saw an average of 9.3m visits a year, and a footwear, clothing, children’s toys, cosmetics and health median of 2.8m. products communicated through a median of 11 channels, while those selling utilities and automotive goods used a median of eight. WHAT LEADING RETAILERS DO Most stayed in touch with existing and potential Boots enabled shoppers to easily engage with it via its customers through a Facebook page (94%) and a Twitter mobile app, where it offered the ability to see, and share, account (88%). On Twitter, Top500 retailers had an average product reviews, ratings and ability to share products on of 219,000 followers: larger retailers have much larger social media.
20 ◉ INTERNETRETAILING.NET/IRUK BRAND ENGAGEMENT
HOW DIFFERENT SECTORS WITHIN THE TOP500 USE SOCIAL MEDIA
Facebook Twitter Instagram YouTube Pinterest snapchat All Top500 retailers 94% 88% 81% 69% 55% 5% Direct selling brands 95% 86% 89% 73% 62% 5% Books 77% 77% 62% 46% 46% 0% Children's toys and accessories 87% 84% 71% 76% 58% 3% Clothing: Fashion 96% 88% 92% 67% 66% 8% Clothing: Sports and leisure 94% 88% 84% 73% 51% 2% Consumer electronics 90% 89% 62% 70% 38% 2% Cosmetics 92% 92% 86% 76% 67% 8% Drink 86% 82% 73% 68% 64% 0% Fashion accessories 95% 86% 91% 67% 64% 7% Footwear: Fashion 96% 88% 93% 66% 68% 9% Footwear: Sports and leisure 94% 85% 86% 68% 49% 3% Grocery 86% 82% 77% 64% 59% 0% Health 90% 90% 65% 65% 40% 5% Home and industrial appliances 85% 82% 59% 62% 54% 0% Homeware 90% 85% 75% 68% 70% 1% Music, film, TV 86% 79% 79% 71% 21% 0% Sports and outdoor equipment 94% 87% 72% 79% 43% 2% Stationery and craft 86% 86% 64% 64% 57% 0% Trade tools and equipment and DIY 86% 81% 44% 67% 44% 0%
RetailX 2019 Facebook and Instagram are the most common communication channels and are supported by the vast majority of the Top500 across all sectors. Instagram and Pinterest are also widely used, particularly among fashion retailers
Sainsbury’s appeared to foster good relationships with Wickes shared product ratings and reviews and made loyal customers, as measured through its friends count promotions clear. It also allowed customers to complete on Twitter and the number of times shoppers visited its their transaction without registering. website in a year. It also enabled customers to share their New Look shared daily deals on its mobile app, and opinions, through product ratings and through sharing product ratings on its site. It stood out as an active Twitter products with friends. user. It did not require registration before checkout. Argos was highly rated for the use of personalisation. In Dunelm shared product ratings and reviews on its addition, it shared product reviews and ratings, and had live website and supported a relatively high number of chat on its app. communication channels. It flagged up deals through clear Amazon shared a range of information about products use of promotions on its site. via its mobile app, which hosted product videos, live chat, Next helped shoppers find the best prices by sharing written product reviews and daily deals. daily deals and flagging up promotions on its website. It Marks & Spencer scored highly by enabling customers to showed what other customers thought through the use of review and rate their products via their mobile app, as well as product ratings, and supported an above average number of allowing users to share products to their social media accounts. communication channels.
INTERNETRETAILING.NET/IRUK ◉ 21 MOBILE & CROSS-CHANNEL
Convenient cross-channel services Joined-up channels help shoppers to browse and buy more easily from a range of devices
Retailers stand out in the Mobile & Cross-channel shoppers into stores and increase incremental sales. Dimension when they help shoppers to buy in the way Retailers took an average of three days to fulfil collection that is most convenient for them. That means enabling orders, level with last year. With the majority now offering shoppers to shop in-store or online from their smartphone collection, traders can differentiate by offering the service via intuitive and responsive mobile and desktop websites faster than the average, or from a wider variety of convenient and mobile apps, or any combination of the above. Once places, but it’s interesting that fewer opted to do so in 2019 the order is placed, stand-out traders enable customers to than the previous year. In 2019, 19% of the Top500 offered collect, or return, their order at a store or at another point next-day collect, and 10% same-day collection. But of the through effective and well-planned cross-channel services. 270 Top500 retailers that offered click and collect services The work that traders do to make their mobile websites and in 2018 and 2019, 43% offered next-day collection in 2018 apps highly useful to shoppers also boosts their standing. and 24% in 2019 – a fall of 19 percentage points (pp). The Thus those that enable shoppers to find their local shop, proportion offering same-day collection fell as well, from via a store finder, and to check whether an item is in stock 21% to 13%, an 8pp fall. In 2019, 5% of the Top500 offered benefit, just as do those that offer augmented reality in reserve and collect services, but there was an 8pp fall order to enable shoppers to visualise how an item will look from 14% to 6% in those offering the service in both years. before they buy it. Perhaps many retailers see no advantage in offering a RetailX researchers included in their assessment collection service that is faster than three days. At the same retailers’ promises around fulfilment and returns, time, the proportion of those offering their own collection where these take place across channels. They assessed lockers in stores fell to 1% in 2019 from 2% previously. the responsiveness and usefulness of websites, and Features that support cross-channel shopping journeys particularly for this Dimension, how useful websites were include store finders and stock checkers on mobile in directing customers to retailers’ physical stores. They websites and apps. In 2019 research, some 31% of the considered whether apps had bugs, whether they were Top500 had an Android app and 37% an iOS app, of which transactional, whether they featured augmented reality, 93% had no notable bugs.The research showed that of visual search, store finders, and stock checkers, and Top500 multichannel retailers in 2019, 53% had a store enabled retailers to send push notifications. finder on their mobile websites, and 35% of those with mobile apps included one in their app. Some 17% of retailers with iOS apps enabled shoppers to see stock WHAT TOP500 RETAILERS DO availability from the app, while stock availability was visible In 2019 more retailers offered services such as click and on mobile websites run by 35% of the Top500, and 18% of collect and return of an ecommerce order to a store, but multichannel retailers also had a store stock checker. it’s notable that the number that improved on the basic Of retailers with an app, just 2% had an augmented promise through faster or more convenient services was reality feature. lower than last year. In 2019, mobile sites were visually complete in an This latest research found that most retailers offered average of 9s, up from 8.82s last year, and a median of 7.9s. shoppers the increasingly-popular option of collecting Some 49% of the 2019 Top500 enabled shoppers to return their orders in store: 60% offered it in 2019. That’s broadly an online order to the store, while 20% enabled them to similar to last year. Among the retailers that were included return it to a third-party drop off point, using dedicated in the Top500 of both 2018 and 2019, 62% offered it in 2018, services in locations from convenience stores to train and 63% in 2019. stations. Among the multichannel retailers measured in The latest research showed retailers provided the service both 2018 and 2019, returns to store increased by 5pp from for an average fee of £1.53 – down by 75p on last time. 45% in 2018 to 50% in 2019. Returns to a third-party drop- However, the median fee was zero, since most retailers do off point, however, stood at 26% of Top500 in 2018 and 21% not charge for this service. Perhaps that’s because click in 2019 among the 468 retailers that were assessed on this and collect services are more likely than delivery to bring metric in both years.
22 ◉ INTERNETRETAILING.NET/IRUK MOBILE & CROSS-CHANNEL
TOP500 RETAILERS WITH STORES MAKE RETURNS EASIER
Clothing: Fashion 53% +4pp
Fashion accessories 55% +2pp
Footwear: Fashion 53% +3pp
Jewellery 47% +8pp
Children's toys and accessories 47% +7pp
Direct-selling brands 45% +6pp
Footwear: Sports and leisure 45% +5pp
Sports and outdoor equipment 46% +4pp
All Top500 45% +5pp
Trade tools and equipment and DIY 40% +9pp
Homeware 43% +5pp
Clothing: Sports and leisure 41% +4pp
Stationery and craft 39% +2pp Garden 34% +3pp
Health 34% +3pp
Home and industrial appliances 31% +5pp
Books 25% +4pp 2018
Consumer electronics 23% +5pp 2019 increase
Returning an online purchase to a physical shop is an option offered by 50% of multichannel Top500 retailers. All sectors show a single-digit percentage point (p.p.) increase over last year’s figure RetailX 2019
WHAT LEADING RETAILERS DO Euro Car Parts helped buyers to check stock via mobile Argos offered a convenient range of collection options, from apps that include an Android app, and then reserve for same-day collection to the less widely offered reserve and collection, and collect it same day. collect option. It also gave customers the ability to check Next gave a choice of collection options, including same- store stock via its mobile app. day and next-day, and made that easier by including a store Sainsbury’s enabled shoppers to both collect and return finder in its Android app. items they ordered online, choosing from options including John Lewis offered multichannel services that make a same-day collection service, or return via drop-off at a it easy for shoppers to see, and to check, availability in third-party location, as well as in its stores. their local store before ordering for next-day collection. Its Tesco also made it easy for its shoppers to collect their sister supermarket Waitrose also stood out for convenient online orders, whether through reserve and collect, same- collection, as early as same-day or through reserve and day collection or next-day collection. collect, and it enabled returns at a third-party location. Marks & Spencer enabled shoppers to return their Asda made collection easy: shoppers were able to find unwanted online orders at a variety of locations, from the their nearest store in the store finder on its mobile app, store to a third-party location. It also offered a next-day before collecting an online order via an in-store locker, or next- collection service. day – and dropping off unwanted items at a third-party location.
INTERNETRETAILING.NET/IRUK ◉ 23 DEFINITIONS
WHAT CONSTITUTES A RETAILER?
The multichannel landscape is more complex than merely MERCHANDISING: the retailer actively sells and is not just ‘having a website’ or ‘operating a store’. In choosing which a portal for taking customers’ money. This means the companies to include in the Top500, we have considered selection, promotion and tailoring of retail offers for companies’ intent, capabilities and activities around the customers. recruitment and monetisation of customers. The definition of a ‘retailer’ for inclusion in our research is: ACQUISITION: the retailer actively markets, recruits and attracts customers with a promise or proposition to the DESTINATION: the retailer has created a destination that, in destination. the minds of customers, is a source of product, service or experience. Whether this destination is a shop, a site, a SALE: the retailer takes the customer’s money. The retailer place, a time or an event, it’s the sense of ‘locus’ that counts. owns the transaction as the merchant of record.
FASCIA-FOCUSED: the assessment focuses on individual trading RECOURSE: the retailer is responsible for the service, names, rather than a parent company that may operate fulfilment and customer satisfaction owing from the sale. more than one brand. Since the group structure is invisible to customers, it does not have a bearing on the position of EXCEPTIONS: in every good list there’s an exception, where brands owned by a group. The challenge is to turn group we may include a certain business due to its influence capabilities into trading advantages that the customer upon retailers and retailers’ customers. Some of these would notice across brands. companies will be included within the Top500 and others are tracked for information on their impact on retailers. PURPOSE: the retailer has created goods and/or services for the specific purpose of selling, for consumption by the purchasing consumer.
COMPANIES EXCLUDED FROM THE TOP500
MARKETPLACES: where a candidate retailer is simply a BUSINESS-TO-BUSINESS AND DIRECT-SELLING BRANDS: while the marketplace, the company is not featured. Where a scope of retail is normally direct to consumer, two trends marketplace undertakes customer acquisition, manages are challenging this – the move for brands and previously payment, customises offers and recommendations solely B2B businesses to sell direct to consumers; and the and offers recourse on purchases, then the company will be increasingly retail-like behaviour of B2B brands, in terms eligible for inclusion. of acquisition, promotion, personalisation and service. We have therefore included certain B2B businesses and direct- PURE TRANSACTION/TARIFFS: where ecommerce is ancillary to selling brands. the primary purpose of a business, we will not necessarily include them. Online payment for gas or electricity is excluded since the purpose here is to supply energy. Travel companies are not included in the Top500. We have also excluded media-streaming services.
24 ◉ INTERNETRETAILING.NET/IRUK RESEARCH PARAMETERS
Summary of elements included in each Dimension:
0. FOOTPRINT DIMENSION 4. MERCHANDISING 0.1 UK retail turnover, ranging from £3m to £45bn – average 4.1 Customer-perspective review, including 23 metrics £371m covering design, navigation, the relevance of search 0.2 The ecommerce subset of the above, ranging from results, product information and visual appeal £0.5m to £7.3bn – average £49m 4.2 Mobile app assessment, including nine metrics covering 0.3 UK web traffic, ranging from 500,000 to 2.3bn page use of notifications, product display and personalisation views per annum – average 71m views per annum [retailers with mobile apps] 0.4 Number of UK stores, ranging from 0 to 11,500 – 4.3 Merchandising and product review, including number average 109 stores and depth of promotions, the fraction of a retailer’s range with reviews and descriptions, the number of 1. STRATEGY & INNOVATION images per product and the fraction of range that is out 1.1 Strategic practice, including an expert-designated of stock [largest retailers] selection of metrics that catalogue a retailer’s embrace of technological or organisational best practice 5. BRAND ENGAGEMENT 1.2 Innovative practice, including a selection of metrics 5.1 Social media presence and availability, including 22 from other Dimensions that, to date, are only used by metrics, taking into account size of audience and the leaders interaction with it on Twitter, the net change over three months and use of 10 social networks, email, and blog 2. THE CUSTOMER 5.2 Mobile and desktop website review – assessing 2.1 Customer service response time and helpfulness – the integration of social media, sharing and social Facebook and email validation 2.2 Desktop and mobile homepage performance, including 5.3 An assessment of mobile apps’ incorporation of social engineering and responsiveness media [retailers with mobile apps] 2.3 Mobile and desktop website navigation – the ease of finding a desired product, including tabs, icons, search 6. MOBILE & CROSS-CHANNEL and filtering 6.1 Mobile home page performance, including engineering 2.4 Customer feedback – incorporation of customer reviews and responsiveness and product ratings on the product display page 6.2 Mobile website assessment, including the use of screen 2.5 Mobile app – the incorporation of customer reviews and real estate, the ease of navigation and the ability to product ratings in mobile app product display pages and track the availability of goods at physical stores the personalisation, performance and user experience 6.3 Multichannel features, taking into account use of physical of apps [retailers with mobile apps] store estate for order fulfilment and return, store information on the website, in-store functions of apps 3. OPERATIONS & LOGISTICS and cross-channel loyalty accounts [retailers with stores] 3.1 Delivery capability including 10 metrics covering the 6.4 Mobile app, including 24 metrics, measuring the range of options, and competitiveness of timeframes usability and functionality of apps. and pricing 3.2 Returns capability, including 10 metrics covering the ease of the returns and refund process to the customer, and the range of options, including return to store 3.3 Collection capability, including nine metrics covering the number, type and convenience of collection locations and the costs and timeframes of the services 3.4 An assessment of the mobile website’s usefulness to customers who want to see the availability of stock, both for ecommerce orders and in local stores 3.5 Mobile app – visibility of stock availability and locations in the app [retailers with mobile apps]
INTERNETRETAILING.NET/IRUK ◉ 25
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SCHUH: WHERE PEOPLE INTERNET RETAILING AND METRICS FIT NEXT FROM A Performance Dimension Report as part of IRUK 500 2017 Sean McKee, Director of Ecommerce, Schuh on how metrics, 4 CHARACTERISTICS OF RETAIL InternetRetailing’s UK Top500 Retailers, 2017 e ciency and people combine to deliver brand consistency DIMENSION REPORT INSIDE OUR ‘MOBILE’ EDITION: ❚ INCREASING MOBILE CONVERSION P34 ❚ REDUCING FRICTION IN-STORE P48 TECHNOLOGY LEADERS www.internetretailing.net/IRUK ❚ IS THE FUTURE CONTROLLED BY VOICE? P50 THE CUSTOMER: NOVEMBER ❚ THE EDELIVERY PAGES P54 Leading and inspiring technology change WHY IT’S TIME TO TAKE
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For me the trick INSIDE www.internetretailing.net/iruk [email protected] “ is finding the • Interview with Sara balance between Prowse of Hotter technology and • Discover the Top100 UK retailers that stand out in human interaction The Customer dimension – that’s where the • 12 best-practice true connection approaches to customer happens service and customer experience
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Any questions? Get in touch [email protected] GROWTH 2000
Focus on growth InternetRetailing has extended its overview of the UK’s vibrant ecommerce and multichannel retail industry through the first InternetRetailing Growth 2000 report.
The report, published in the autumn, draws on research initially carried out for the IRUK Top500. In order to establish the leading 500 retailers, RetailX researchers measured the performance of more than 1,000 traders across the six Dimensions of the main report. Beyond the leading cohort, it soon became apparent, there was a dynamic hinterland of thousands more companies, whose surface is barely scratched by our list of Bubbling Under retailers (page 9). The Growth 2000 delves beneath the surface of this group to look in more detail at these retailers and the growth factors that drive their performance. Researchers have produced, using metrics fashion brands Donna Karan, Fiorucci, Hermes and that analyse online and offline presence and visibility in Duchamp London are listed alongside homewares brands the market, a ranking that includes established names Hoover, Kitchenaid and Breville. All are among the rising alongside up-and-coming retailers. The Top500 was tide of brands selling direct. Some leading brands already assessed through an initial ‘footprint’ study. That included feature in the Top500; this list is evidence of plenty more measuring their store estates, online and offline revenues, challenger brands, both new and long-standing. Other in combination with their web traffic. The Growth 2000 retailers with a new business model include subscription covers the next 2,000 in that list. These 2,000 retailers beauty box business Birchbox, veg box company Riverford represent an industry of impressive diversity, from online Organic Farms and meat box supplier Field & Flower. Chic sweet shops to beer experts, from fashion brands to by Choice and Girl Meets Dress both offer dress rental. specialists in technology, clothing and more. The ranking also speaks to a wide range of specialist retailers now supplying shoppers online, from Ironmongery Direct and Chinese Motorcycle Parts Online DEPTH AND BREADTH – THE GROWTH 2000 to Cult Pens, Loveknitting.com and Jigsaw Puzzles Direct. This list includes regional retailers, direct-selling brands, A long roster of sports and outdoors suppliers starts, specialists and foreign businesses selling into the UK. in alphabetical order, with Alpine Trek and continues to Each shares the same core challenges, which are reflected Yeomans Outdoor Leisure, by way of both Angling Active in how this research is presented: the need to be found and Angling Direct, and Lovell Rugby among many others. in Search; the need to be with Mobile customers who Altogether, this ranking illustrates a vibrant and are increasingly using smartphones; the need to provide varied retail industry, operating in competitive conditions efficient and flexible Delivery options; and the need to help where retailers must move and improve constantly in customers share what they’ve learnt, to be Social. order to keep their place in the market. In this soup of It’s a list that includes familiar British names including retailers, fighting for attention, niche stores that offer Brompton Bicycle, The British Museum Shop and the knowledgeable services to a well-defined community Great Little Trading Company, and international sites that may outcompete the Top500 retailers in their depth are doing significant business in the UK, from Spanish of knowledge and personal service, even though their department store El Corte Inglés to German travel company turnover, web traffic and store network are smaller. bücher.de, Australian website costumes.com.au and, from the US, The Metropolitan Museum of Art Store. Designer To see the report in full, visit internetretailing.net/g2k
INTERNETRETAILING.NET/IRUK ◉ 27 MULTICHANNEL IN CONTEXT
How the best department stores perform As department stores’ business grows online quickly, we look at the promises that this group of retailers offers to ecommerce and multichannel customers
Department stores are seeing their business move online – with 91% of department stores employing the tool, and fast. In November 2018, 20% of department store sales contrasted with 76% of Top500 retailers. Other widely took place online, according to figures from the Office for used filters were product type (89%, Top500: 85%), and National Statistics, following a 73% increase in ecommerce brand (82%, Top500: 57%). sales compared to the previous month. Shoppers may be responding to delivery promises and product presentation among an 11-strong group that includes John Lewis, Debenhams, House of IT’S ALSO LIKELY THAT AS RETAILERS Fraser, Harrods and Selfridges, and tends to outstrip THAT USUALLY SELL GOODS FROM THIRD- the performance of the IRUK Top500 index. Indeed, department stores have featured heavily in the Elite PARTY BRANDS AND MANUFACTURERS, category of the index over the years (see Elite and Leading Retailers, page 8), and the service that department stores THEY MUST OFFER A HIGHLY COMPETITIVE offer is recognised across the IRUK Top500. SERVICE AS THEY LOOK TO STAY RELEVANT
WHAT DEPARTMENT STORES DO: DELIVERY, COLLECTION AND RETURNS TO THE END CUSTOMER In 2019, department stores offered more flexible delivery, collection and returns promises. Most department stores offered click and collect Recommendations of similar alternative products were services. Some 88% of the group offered them - 28 common on department store websites (92%, Top500: percentage points ahead of the Top500 as a whole. 71%). But product reviews were less commonly used than Next-day collection was more commonly found among the wider group: just over half (53%) of department stores department stores (37%) than among the Top500 as a used them - 5pp lower than the Top500. whole (22%). Same-day collection was offered by 9% of More retailers in this group had mobile apps: 59% had department stores - ahead of the 5% of Top500 retailers. an iOS app (Top500: 37%), and 46% (Top500: 30%) an The group was also more flexible when it came to delivery: Android app. 40% offered Saturday delivery (Top500: 30%), and 22% Department stores were also faster to respond to Sunday delivery (Top500: 13%). More than half enabled customer service enquiries, answering in just over three shoppers to name their delivery day (54%, Top500: 16%) hours - or seven hours earlier than the median Top500 and time (23%, Top500: 7%). The group charged £1 more retailer. for delivery, at £4.80, than the Top500 as a group, while It’s clear that department stores as a group offer well- delivering in the same 4.5 day time span. planned ecommerce and multichannel services. In doing Three out of four enabled shoppers to return items so, they appear to be responding to changing customer bought online to a store - that’s 27 percentage points more behaviour that is demanding flexible customer service. than the Top500 – while 42% enabled returns via a third Department stores often lead in this index. That may be party location (Top500: 20%). because they are often bigger businesses, whose larger footprint gives them a bigger presence and higher brand awareness than many rivals. But it’s also likely that as WHAT DEPARTMENT STORES DO: MERCHANDISING, MOBILE AND CUSTOMER SERVICE retailers that usually sell goods from third-party brands Department stores were more likely to use extensive and manufacturers, they must offer a highly competitive search filters on their websites, perhaps because they service as they look to stay relevant to the end customer stocked wider ranges and more brands than the many and give them a reason to buy those goods from them – Top500 retailers. Price was the most widely-used filter, rather from than a rival, or from the brands directly.
28 ◉ INTERNETRETAILING.NET/IRUK GLOBAL CONTEXT
Understanding the global context Visitors from around the world drop into the online stores operated by leading UK retailers. This heat map reflects the level of interest IRUK Top500 retailers attract from different parts of the globe.
How do IRUK Top500 retailers fare within the global Just as retailers from other parts of the world choose context? This heatmap is designed to highlight the to trade from the UK, shoppers from around the world number of visitors that come to UK retail websites from also look to the UK to buy. Some of the names listed in the outside the UK and draws on data from InternetRetailing Top500 will already be very familiar to overseas visitors, from Knowledge Partners Hitwise and SimilarWeb. It shows Amazon to Space.NK and Apple in the United States, to H&M, that the strongest interest in IRUKTop500 retailers comes Zara and Clinique in Europe. But the list is also a useful from those who have a language in common. The United reminder that retail is now very much a global business. As States is the single largest source of traffic to these RetailX research extends to other geographies, the extent leading websites, while Canada also ranks among the top to which retailers succeed in markets around the world has ten overseas markets. Interest is also strong from those become clearer. The IRUK Top500 list has its most extensive with whom we share geography: Germany, France, Italy crossover among European retailers: 226 of those listed and Spain are within the ten leading markets. Poland, the also appear in the IREU Top500. But there’s also significant Netherlands and Belgium are the European markets with overlap with very different areas. Some 96 retailers also the next greatest interest. But also significant are amounts appear on the ASEAN Top500 and 51 on the AU Top250. of traffic coming from Japan - with the third highest levels It’s also likely that UK retailers have a wide reach because of interest in UK retailers – the Russian Federation, India of the widespread understanding of the English language, and mainland China. At the other end of the scale, there’s and because this is a market where local retailers are a small but measurable interest from markets as varied as relatively mature, having years of experience in serving a Ecuador, Armenia, Sri Lanka and Azerbaijan. market where shoppers are more willing to buy online.
GLOBAL WEB TRAFFIC
This analysis drew upon data sourced from InternetRetailing knowledge partners Hitwise and SimilarWeb RetailX 2019
INTERNETRETAILING.NET/IRUK ◉ 29 KNOWLEDGE PARTNERS
Thank you
Our thanks go to our title sponsor Klarna for helping us to bring our insights and findings to professionals working in ecommerce and multichannel not only in this report but in our year-round series of research reports.
Klarna also sponsors the IREU Top500 series of research reports, available at internetretailing.net/ireu
KLARNA.COM
KNOWLEDGE PARTNERS InternetRetailing would like to thank the following Knowledge Partners for their original data insights as well as support, advice and guidance in producing the IRUK Top500.
builtwith.com ascentialedge.com hitwise.com
eggplant.io returnpath.com similarweb.com
30 ◉ INTERNETRETAILING.NET/IRUK CONCLUSION
Conclusion
This latest edition of IRUK Top500 research is interesting for Over the coming year we’ll continuing our research and the way in which it seems to show both growth in the adoption mapping the changes that retailers make, while presenting of broadly popular retail tactics, such as enabling click and our findings in more detail through six Top500 Performance collect from store - but at the same time a decision to drop Dimension Reports that mirror the sections of this report. more sophisticated versions of those approaches. It’s clear that We’ll be considering what leading retailers in each dimension while most Top500 retailers now offer collection, a significant do well, what tools they use – and how others can apply number have taken individual decisions not to offer same-day these learnings to their own businesses. All of that, we hope, and/or next-day collection, or to enable returns to third-party makes this IRUK Top500 series of reports a useful tool for shops. They’ve opted not to use social sharing and to share retail businesses looking to understand how they can improve ‘likes’ on product pages, to name but a few approaches that their own approaches to selling both online and across sales proved to be less common in 2019 than in 2018. channels. This suggests that these approaches were either not useful, As always we’re interested in how we can extend our or that they were not cost-effective for the retailers that research and improve the quality of our findings. Get in offered them and that they have now chosen not to deploy touch with your ideas and potential datasets via research@ them as a result. That retailers have sometimes made this internetretailing.net or tweet @etail with #IRUK500. change in large numbers – 19pp fewer retailers offered next- day collection in 2019 (24%) than in 2018 (43%), for example – suggests that having been tried, such approaches have not passed the test of usefulness, or affordability. It’s about deciding what works and is worth doing, and ruling out that which doesn’t pass that test as retailers adapt to the changing way in which customers now want to buy.
Editor: Chloe Rigby InternetRetailing Media Sevices Ltd, No part of this circulation may be Published globally by Editor-in-Chief: Ian Jindal 2nd Floor, St Mary Abchurch House, reproduced, stored in a retrieval InternetRetailing Media Design: Marzena Zychowicz 123 Cannon Street, London, EC4N 5AU system or transmitted by any Services Limited. Managing Director: Chris Cooke Printed in Great Britain. means without the publisher’s Data supplied by RetailX. ISSN 1759-0582 permission. The editorial content www.retailx.net Commercial Director: Andy James For circulation enquiries contact: does not necessarily reflect [email protected] Internet Retailing Media Services Ltd, the views of the publisher. The Creative Solutions Director: 2nd Floor, St Mary Abchurch House, publisher accepts no responsibility Marvin Roberts 123 Cannon Street, London, EC4N 5AU for any errors contained within the [email protected] Tel: 020 7062 2525 publication. Tel: 020 7062 2525 [email protected] www.internetretailing.net
INTERNETRETAILING.NET/G2K ◉ 31 In partnership with
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