Tag: online retail

The “master shopper” has evolved says John Lewis

evolutionThe third annual John Lewis Retail Report has discovered that a new ‘master shopper’ has emerged to take advantage of multichannel retail.

According to the report, this ‘master shopper’ has learned to combine channels and devices in order to create their own optimal shopping experience.

As the report said that using all these options creating a more flexible journey. Shopping today is less about “I need it now” and more about “I need it how, when and where I want.

The report suggests that stores are still important, but fulfil a function which, according to the report, is increasingly linked to leisure time.

John Lewis has noticed that services such as Beauty and spa treatments in its stores are getting a lot of attention.

But the growing use of mobile and multichannel services like click and collect have created a new landscape for retail in which customers switch between devices and channels – online and offline – with ease, the report said.

The proportion of traffic to the John Lewis website from mobiles increased to 60 per cent in the last twelve months and mobile revenue grew by 68 per cent.

The retailer predicts that we’re yet to reach peak usage.

Two thirds of John Lewis customers use both physical shops and online channels and the number who bought from both channels increased by 9 per cent over the past 12 months.

Almost 20 per cent of customers buying a computer have more than ten interactions during a buying journey.

An average of three of those interactions involve online research on John Lewis or on other websites.

Facebook is the most popular social channel for John Lewis, though it uses different channels for different reasons.

What all this means is that multichannel retailers like John Lewis need to realise the number of channels and influences that affect the customer’s purchase and make this process as easy as possible.

With the number of channels used by these ‘master shoppers, it becomes more important for retailers to have a presence on as many as possible.

Mobiles big it up online

Keep taking the tabletsTablets and smartphones are quickly becoming the platform of choice when it comes to online shopping. According to IMRG Capgemini, mobile accounted for 23.2 percent of online sales last quarter, up 11.6 percent year-on-year. What’s more, the actual proportion of retail site visits coming from mobile was up to 34 percent from 21 percent a year ago.

Click and collect is going strong as well, as it represented 16 percent of online sales, up from 12 percent last year. Bounce rates are also going up, largely as a result of higher mobile penetration.

IMRG chief information officer Tina Spooner said there is a correlation between the surge in mobile commerce and the rise in visitor bounce rates on mobile retail sites.

“While consumers [people, Ed.] have generally become more confident in using their mobile devices as a shopping tool, the latest data suggests they have also become more demanding,” Spooner said. “Higher search volumes will inevitably result in an increase in bounce rates as shoppers will often compare products and pricing across several brands.”

Spooner argued that offering an engaging and relevant experience for customers across all channels will help retailers achieve the end goal of higher conversion rates and an increase in customer loyalty.

Capgemini UK VP of consumer products and retail Chris Webster pointed out another interesting trend – record levels of sales via mobile devices correspond to higher rates for click and collect.

“This correlation of mobile ordering and location flexible collection is at the heart of the mobile internet and the impact it will have on consumer behaviour. Maybe we are truly entering the Martini age – anytime, anyplace, anywhere,” he said. Talk about product placement, Webster.

Footfall creeps up, vacancies down

clouds3The July heatwave is long gone, but its positive effects on the retail sector are still being felt. According to the British Retail Consortium, footfall was up 0.8 percent in July compared to a year ago. The footfall uptick was not the only good news, as vacancy rates went down.

BRC found that vacancy rates in town centres went down from 11.9 percent in April to 11.1 percent in July. Since lovely weather drove shoppers back to the high street, online took a hit. Online sales fell two percent compared to June, but year-on-year they were up nine percent.

In addition, the Confederation of British Industry (CBI) is now forecasting GDP growth of 1.2 percent in 2013, up from 1.0 percent in its May forecast. CBI revised its figures after a better than expected second quarter and signs of a pick-up in confidence across a broad range of sectors, including services, construction and manufacturing.

“The economy has started to gain momentum and confidence is picking up, but it’s still early days,” John Cridland, CBI Director-General, said. “We need to see a full-blown rebalancing of our economy, with stronger business investment and trade before we can call a sustainable recovery. We hope that will begin to emerge next year, as the Eurozone starts growing again.”

As the Eurozone emerges out of recession, we could be in for a period of relative stability, but the recovery remains painfully slow in most sectors.

Euro online sales to double in five years

visa-epayOnline retail sales in Europe are expected to double by 2018, reaching €323 billion. This year online retail should hit €188 billion and some companies like Amazon are expected to see even faster growth, according to market research firm Mintel.

Mintel’s survey covered 19 markets in Europe and it was made exclusively available to Reuters. The survey found that Germany, Britain and France would remain by far the largest markets for online retail. However, the Netherlands, Spain and Poland should see fast growth, while Norway and Sweden already have the highest online per-capita spend.

Mintel analyst John Mercer said there is a big North-South divide in e-commerce in Europe. French participation levels lag Britain and Germany, but Portugal, Italy, Greece and Spain are even further behind, which is hardly surprising since they can barely afford Molotov cocktails now.

Amazon is expected to maintain its lead and double its market share in the next three to four years. Amazon currently has just five dedicated websites in Europe, in Britain, Germany, France, Spain and Italy. Mercer reckons Amazon would be better off with localised sites for the Nordics than Italy.

British grocers are doing surprisingly well. Tesco’s market share is 2.3 percent, Asda and Sainsbury’s have 1.1 percent and 0.9 percent respectively. However, online grocery shopping is not popular in the rest of the continent.

Tablet shopping survey reveals strange new sofa habits

smartphone-shoppingA report fresh out of Nielsen found that shoppers behave quite differently when they’re doing their shopping on tablets rather than smartphones. Tablets are a lot more likely to be used for product browsing and tablet users write more product reviews.

Two thirds of smartphone shoppers use their devices mostly at home, while the same goes for four fifths of tablet users. More often than not, they watch TV while their playing with their smart devices. Tablet owners are more active with product research (59 percent) and are more likely to purchase physical items (38 percent) than smartphone shoppers (24 percent).

However, smartphone shoppers make up for it by being more active outside the home. On the other hand, Nielsen found that quite a few mobile shoppers are on the sofa while they’re shopping. This is true of 95 percent of tablet users and 72 percent of smartphone users, who make their purchases from home. Tablet users are more likely to make a purchase overall.

In a brick-and-mortar setting, smartphones reign supreme. As many as 70 percent of smartphone shoppers use a store locator to plan their shopping trip, while 37 percent arrive with organised shopping lists stored on their phones. The majority of smartphone and tablet shoppers use their devices to check prices before pulling the trigger. More smartphone users do this in physical stores. Smartphones also lead the way when it comes to mobile coupons and mobile payments.

Even when their shopping spree is done, many shoppers turn to their tablets to write product reviews or write comments about their purchases on social media. The majority of smartphone and tablet shoppers also use their devices to track the progress of their online orders.

Heatwave reheats British retail in July

highstreet South endJuly appears to have been a great month for British retailers and they have mother nature, a tennis player and a baby to thank for it.

According to the British Retail Consortium and KPMG, sales were up 3.9 percent, against a 2.0 percent increase in July 2012, the fastest July growth since 2006. In real terms, total growth was 4.4 percent, the fastest since April 2011.

Since much of the growth was fuelled by hot weather, fashion outlets and the food sector did particularly well. However, online sales grew by just 7.9 percent, much lower than the 15.6 percent in July 2012. Home accessories, furniture and home textiles were the worst performing sectors, as most people chose to buy flip-flops and barbecue sauce instead of new carpets and Allen key loving flat-pack furniture.

“Food has performed very strongly, with summer barbecue ingredients and feel-good foods doing well during a month where the Lions, Murray, Chris Froome in the Tour de France and the start of the Ashes series all contributed to the positive summer feeling;” said Helen Dickinson, director general of the BRC. “Clothing has also had a very good month, which was down to good weather spurring summer fashion buys and some very good discounting.”

David McCorquodale, Head of Retail, KPMG, said July was a “golden month” for retail sales and a return to form for British retailers.

“Hopefully this uptick in sales is another indication that the UK economy has turned the corner towards growth. Murray mania, summer sun and the arrival of the royal baby gave consumers that much needed feel good factor, encouraging them to leave caution behind and help retailers put in a champion performance,” he said. ‪”With autumn ranges now hitting the shelves, retailers need some cooler weather to encourage consumers to treat themselves to some new winter woollies. If they get these new ranges right and suitable weather, it could be game, set and match.”‬‬‬

Online retail challenged by poor infrastructure

visa-epayOnline retailers are on a roll, but many of their sites aren’t performing well due to some rather basic technical limitations.

According to a recent report from NCC Group, the top 50 online retail sites in Britain exhibited poor website performance last quarter and much of the problems were caused by ancient internet connections.

The end result was that fancy sites with plenty of flash content offered a less than stellar shopping experience, as they were simply too slow. NCC Group tested the sites and found that the average download speed was 6.7 seconds on a 2Mbps connection. The average speed in Q1 was 6.27 seconds, but research has shown that load times over 3 seconds tend to drive customers away.

It seems that online retailers are sparing no expense when they develop their sites, so they end up with elaborate and relatively “heavy” websites that take too long to load. Average internet connection speeds aren’t keeping up with the trend.

Worse, the top 50 retail sites averaged a downtime of 4 hours and 17 minutes, which is also up from last quarter’s 3 hours and 23 minutes. It seems that feature packed sites are not only slow, they tend to be less reliable as well.

“It’s a worrying trajectory and one that retailers need to address quickly. If a website is slow to load, consumers will simply go elsewhere, while any downtime will lead to a direct loss of sales,” Bob Dowson, director of NCC Group’s website performance division said. “The potential within the online retail space is massive. In 2012 the value of online retail to the UK was £78bn*, and that’s only going to grow. Retailers that prioritise their website performance will put themselves in a great position to fulfil their potential in the market.”

The financial performance of the UK e-tail market has been largely positive in Q2 2013, with shoppers spending 18.3 percent more in June compared to 2012. However, this report indicates that it could have been a more successful quarter if retailers had prioritised consumer experience through web performance.

Online retail growth slows

visa-epayAlthough online retail sales are still growing, new research from Mintel has revealed that growth is slowing quite rapidly. The online retail sector expanded by about 50 percent in 2008, but last year growth slowed down to just 15 percent. However, this is still much better than the rest of the retail sector and it means the UK online retail sector will double by 2018, with double-digit growth rates.

On the other hand, the slowdown means new players will have a much harder time gaining market share. Established operations only need to maintain their lead, which was gained with little or no competition. The next big frontier is mobile retail.

Mintel retail analyst John Mercer believes online only retailers have possibly picked all the “low hanging fruit,” so new outfits will have to get more creative. However, he notes that the market is still very dynamic.

“In a low growth market [for retailers generally], double digit growth [in online sales] is nothing to be sniffed at,” he said.

Although online-only outlets seem to have grabbed an early lead, they are about to face a lot more challenges. They currently account for less than half of all online sales, but Mintel believes they won’t see much more growth, as high street retailers enter the online space, reports the Financial Times.

New services like click and collect, coupled with new POS and payment technologies might help the high street gain a competitive edge over online-only retailers. After all, many people still like to touch and feel products before they pull the trigger and this is something the convenient online channel simply can’t deliver.

Web spending leads in retail sales

poundsRetail sales increased year on year this May, the Office for National Statistics has revealed.

In its monthly survey of 5,000 UK retailers, it was found that sales volumes increased 1.9 percent compared to May last year – with the quantities bought in retail marking the highest level since the series began.

Amounts spent grew 3.1 percent, also the highest level on record.

It was the non-store retail sector that brought in the largest quantities. Compared with May 2012, goods bought here increased by almost 20 percent, at 19.1 percent. The non-food sector enjoyed some growth, at 2.2 percent.

In terms of amounts spent, the food sector saw an increase of 3.4 percent.

There was downwards pressure from petrol station, with the amount spent here declining 1.8 percent compared to the same time last year. But the amount bought showed minimal growth at 0.1 percent, over the same period. The ONS points out that this indicates price deflation.

Compared to April 2013, both quantities bought and amount spent grew by 2.1 percent. Here, the food sector also drove the most upward pressure on amount spent and quantities bought – at 3.4 percent and 3.5 percent respectively.

Every store type enjoyed growth from the previous month, signifying a slight upwards trend compared to a bleak overall picture in April.

The overall proportion of non-seasonally adjusted online sales stayed healthy at 9.7 percent. Average weekly spending for online retail reached £582 million – an increase of 10 percent compared to the last year.

Online shops get physical

google-walletAmerica pioneered online shopping and its e-commerce outfits are now spearheading another trend. They are thinking of opening traditional brick and mortar stores.

Online juggernaut Amazon is said to be actively exploring a store concept and it is not alone. Bonobos, Warby Parker, Sigma Beauty and others are doing it as well.

It might sound surprising, given the e-commerce boom, but online outfits are looking ahead. They can’t hope to sustain current growth rates much longer, so they might be compelled to branch into physical stores sooner or later.

“But we wanted to put a face on the brand, and we wanted people to touch and feel the product,” Sigma cofounder Simone Xavier told CPA Practice Advisor.

Although online retailers tend to have much lower costs than their traditional counterparts, websites can’t completely replace showrooms and stores, or good salespersons for that matter.

“It is strange to see e-commerce sites open physical stores,” said retail consultant Jeff Green. “But when you think about, it’s not surprising. The most successful retailers are going to have a combination of bricks-and-mortars and digital sales. For online retailers, you might as well get to the sale as close as you can.”

Of course, online retailers will stay true to their roots and their physical stores won’t replace online. Many probably won’t bother with physical stores at all and even those that do are likely to face a lot of challenges.

Samsung to launch smartphone accessory business

Samsung rules the roostSamsung might be about to step up its retail game. According to Korean tech site Etnews, the smartphone giant is going to launch an online shopping mall for phone accessories. Aside from making more cash, Samsung hopes the new service will help it grow consumer loyalty.

The online shopping mall is set to debut in Europe in early July. It will then expand to the rest of the world, with a bit of help from Best Buy stateside. Android Community reports Samsung and Best Buy will open around 1,400 retail locations, both online and offline, but the European push seems to be centred on online.

Of course, most of the accessories will be manufactured by Samsung, although some of them will be supplied by its partners. The details of the plan are still unclear, though. Samsung will probably focus on pricey accessories like wireless charging devices and docks, but there is a chance it will start peddling everything, including cheap screen protector films. The service will also carry some Samsung flagship phones.

The global phone accessory market is worth an estimated $44 billion. With Samsung’s huge market share, it is clearly a burgeoning market that needs to be tapped.