Multi-channel Retailing - UK
Report description
- Neil Mason, Head of Retail Research
Some questions answered in the report include:
Clicks versus bricks - what future for retail property?
How important will stores be as order fulfilment and service points?
Do non-store brands need to offer more fulfilment options?
To what extent are portable digital devices setting a new agenda?
How should retailers embrace social media?
Table of contents
Definitions
Abbreviations
ISSUES IN THE MARKET
Clicks versus bricks - what future for retail property?
How important will stores be as order fulfilment and service points?
Do non-store brands need to offer more fulfilment options?
To what extent are portable digital devices setting a new agenda?
How should retailers embrace social media?
EXECUTIVE SUMMARY
The market
Multichannel sales, driven by online, are booming
Catalogue retailers migrating customers to online
TV shopping companies also experiencing a shift to online
Market factors
Figure 1: Retailers with more than 250,000 Facebook followers, October 2011
The consumer
Multichannel behaviour driven by online
Use of catalogues declining
TV shopping losing out to online
Multichannel has not increased the appeal of home shopping
Rapid take-up of smartphone shopping
Social media beginning to make an impact
Figure 2: Use of home shopping channels, August 2011
Leading retailers experiencing sharp increase in use of online…
…but conversion rates relative to store shoppers still low
Figure 3: Stores and websites shopped in the last 12 months, by conversion factor, August 2011
Amazon has a significant lead in terms of numbers of users
Figure 4: Top 25 UK retail websites, by numbers of unique visitors, September 2011
Stores are at the heart of multichannel shopping
Figure 5: Consumer attitudes towards multichannel shopping, August 2011
Companies, brands and innovation
Right-sizing a priority
Social media attracting retail investment
Investment in service infrastructure
Technological innovation opens new doors
What we think
FUTURE OPPORTUNITIES
TREND: EXPERIENCE IS ALL
TREND: GUIDING CHOICE
INTERNAL MARKET ENVIRONMENT
Key points
Widespread access to enabling technology
Figure 6: Broadband penetration, 2006-11
Figure 7: Broadband penetration, by age and socio-economic group, 2011
Extensive transactional use of online
Figure 8: Types of websites purchased from in the last three months, April 2011
Ownership of mobile digital devices increasing
Social media is about more than keeping up with friends
Figure 9: Retailers with more than 250,000 Facebook followers, October 2011
Figure 10: Sites visited in the last three months using a mobile phone, April 2011
Interactive services on digital TV
BROADER MARKET ENVIRONMENT
Key points
CONSUMER CONFIDENCE REMAINS LOW
Figure 11: GfK NOP Consumer confidence index, January 2007-October 2011
INFLATIONARY PRESSURE ON CONSUMERS
Figure 12: Percentage change in retail price index vs earnings, 2008-11
E-COMMERCE BOOSTS NON-STORE RETAIL
Figure 13: Value retail sales of non-store retailers vs all retail sales, 2009-11
Figure 14: Volume retail sales of non-store retail vs all retail, 2009-11
AGEING POPULATION TO DRIVE CONVENIENCE DEMAND
Figure 15: UK population projections, by age group, % change 2011-16
RISE IN AFFLUENT POPULATION TO PROVIDE A BOOST
Figure 16: UK population projections, by socio-economic group, % change 2011-16
STRENGTHS AND WEAKNESSES
Strengths
Weaknesses
WHO’S INNOVATING?
Key points
SHOPPING WITH APPS
TARGETED PROMOTION
BRINGING ONLINE FUNCTIONALITY OFFLINE
EMBRACING NEW CHANNELS
BROADENING REACH AND TESTING NEW MARKETS
RETAIL COMPETITOR ANALYSIS
Key points
Leading retailers
Multichannel accounting for an increasing share of sales
Figure 17: Leading UK multichannel retailers, 2011
THE CONSUMER - USAGE OF MULTICHANNEL
Key points
Use of channels
Figure 18: Use of home shopping channels, August 2011
Widespread use of websites
Online is good for shops
Use of catalogues declining
TV shopping losing out to online
Multichannel has not increased the appeal of home shopping
Rapid take-up of smartphone shopping
Social media beginning to make an impact
Key characteristics of multichannel shoppers
THE CONSUMER - USE OF MULTICHANNEL RETAILERS
Key points
Use of online relative to store use
Figure 19: Stores and websites shopped in the last 12 months, August 2011
Website purchasing up strongly since 2007
Figure 20: Shopping from websites, 2007 and 2011
Narrow repertoires of online sites
Figure 21: Repertoire of stores bought from in the last 12 months, August 2011
Figure 22: Repertoire of websites bought from in the last 12 months, August 2011
Website use highest among ABC1 families
Figure 23: Use of websites bought from in the last 12 months - ABC1 families vs all, August 2011
THE CONSUMER - ATTITUDES TOWARDS MULTICHANNEL SHOPPING
Key points
Multichannel preferences and perceptions
Figure 24: Consumer attitudes towards multichannel shopping, August 2011
Continued widespread interest in visiting shops and talking to staff
Price-driven use of online
Social and leisure aspects of shopping popular among young and old
Totally online
Strengthen trust in staff
Strong demand for click and collect
Fears about security confined to older people
TARGET GROUPS - POTENTIAL TARGETS FOR THE FUTURE
Figure 25: Marketing targets based on attitudes towards multichannel retailing, August 2011
Group 1 - Keep it real
Group 2 - Seeing is believing
Group 3 - Multichannel mixers
Group 4 - Social shoppers
Group 5 - Mainly online
RETAIL PROFILES
FOOD AND DRINK RETAILERS
Tesco
Asda
Sainsbury’s
Waitrose
OTHER FOOD AND DRINK RETAILERS
Morrisons
Co-op
Iceland
Aldi
Lidl
Majestic Wine
MIXED GOODS RETAILERS AND DEPARTMENT STORES
Home Retail Group
Argos
Homebase
Argos
Homebase
John Lewis
Debenhams
OTHER MIXED GOODS AND DEPARTMENT STORES
House of Fraser
Mothercare
CLOTHING AND FOOTWEAR RETAILERS
Next
Marks & Spencer
Arcadia Group
OTHER CLOTHING RETAILERS
New Look
Matalan
Primark
Clarks
Monsoon
River Island
HOUSEHOLD AND DIY RETAILERS
Dixons Retail
Comet
B&Q
OTHER HOUSEHOLD GOODS RETAILERS
Best Buy
IKEA
DFS
Laura Ashley
Richer Sounds/Empire Direct
SPECIALISED NON-FOOD RETAILERS
HMV
Game
WH Smith
Boots
Superdrug
Lloyds Pharmacy
Sports Direct
JD Sports Fashions
Halfords
ONLINE SPECIALISTS
Ocado
Amazon
eBay
ASOS
Play.com
eBuyer
Net-A-Porter
HOME SHOPPING RETAILERS
Littlewoods Shop Direct
N Brown Group
Freemans/Grattan - Otto
Boden
QVC
Sit-up TV
Ideal Shopping Direct
APPENDIX - INTERNAL MARKET ENVIRONMENT
Figure 26: Broadband penetration, by demographics, 2006-11
Figure 27: Electronic devices have at home, April 2009-April 2011
Figure 28: Most popular electronic devices have at home, by demographics, April 2011
Figure 29: Next most popular electronic devices have at home, by demographics, April 2011
APPENDIX - USAGE OF MULTICHANNEL
Figure 30: Most popular use of channels, by demographics, August 2011
Figure 31: Next most popular use of channels, by demographics, August 2011
Figure 32: Other use of channels, by demographics, August 2011
APPENDIX - USE OF MULTICHANNEL RETAILERS
Figure 33: Most popular stores bought from in the last 12 months, by demographics, August 2011
Figure 34: Next most popular stores bought from in the last 12 months, by demographics, August 2011
Figure 35: Other stores bought from in the last 12 months, by demographics, August 2011
Figure 36: Least popular stores bought from in the last 12 months, by demographics, August 2011
Figure 37: Websites bought from in the last 12 months, by demographics, August 2011
APPENDIX - USE OF CHANNELS AND RETAILERS
Figure 38: Stores bought from in the last 12 months, by most popular use of channels, August 2011
Figure 39: Stores bought from in the last 12 months, by next most popular use of channels, August 2011
Figure 40: Use of channels, by most popular stores bought from in the last 12 months, August 2011
Figure 41: Use of channels, by next most popular stores bought from in the last 12 months, August 2011
Figure 42: Use of channels, by other stores bought from in the last 12 months, August 2011
Figure 43: Use of channels, by least popular stores bought from in the last 12 months, August 2011
APPENDIX - ATTITUDES TOWARDS MULTICHANNEL SHOPPING
Figure 44: Most popular consumer attitudes towards multichannel shopping, by demographics,
August 2011
Figure 45: Next most popular consumer attitudes towards multichannel shopping, by demographics, August
2011
Use of retailers and attitudes
Figure 46: Websites bought from in the last 12 months, by most popular consumer attitudes towards
multichannel shopping, August 2011
Figure 47: Websites bought from in the last 12 months, by next most popular consumer attitudes towards
multichannel shopping, August 2011
Figure 48: Consumer attitudes towards multichannel shopping, by most popular websites bought from in the
last 12 months, August 2011
Figure 49: Consumer attitudes towards multichannel shopping, by next most popular websites bought from
in the last 12 months, August 2011
Figure 50: Stores bought from in the last 12 months, by most popular consumer attitudes towards
multichannel shopping, August 2011
Figure 51: Stores bought from in the last 12 months, by next most popular consumer attitudes towards
multichannel shopping, August 2011
Figure 52: Consumer attitudes towards multichannel shopping, by most popular stores bought from in the
last 12 months, August 2011
Figure 53: Consumer attitudes towards multichannel shopping, by next most popular stores bought from in
the last 12 months, August 2011
Figure 54: Consumer attitudes towards multichannel shopping, by other stores bought from in the last 12
months, August 2011
Figure 55: Consumer attitudes towards multichannel shopping, by least popular stores bought from in the
last 12 months, August 2011
APPENDIX - TARGET GROUPS
Figure 56: Target groups, by demographics, August 2011
Figure 57: Consumer attitudes towards multichannel shopping, by target groups, August 2011
Figure 58: Stores bought from in the last 12 months, by target groups, August 2011
Figure 59: Websites bought from in the last 12 months, by target groups, August 2011
APPENDIX: UK RESEARCH METHODOLOGY
Statistical Forecasting
Statistical modelling
Qualitative insight
The Mintel fan chart
Weather analogy
Related market research by market
United Kingdom (in Europe)
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