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Multi-channel Retailing - UK - November 2011

“No sooner have retailers implemented strategies to integrate online into their store-based businesses than new technology has shifted the goalposts as mobile digital devices are now creating new opportunities for ‘fast shopping’ – shopping on the move and social media generated shopping – which requires retailers to devise and create imaginative and relevant shopping environments, both real and virtual, for today’s technology-focused consumers.”

– 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?

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Table of contents

  1. Introduction

      • 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
                                                                                                                                                                                                                                        • Wickes
                                                                                                                                                                                                                                          • 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

                                                                                                                                                                                                                                                                                                  Companies Covered

                                                                                                                                                                                                                                                                                                  • Aldi Stores Ltd (UK & Ireland)
                                                                                                                                                                                                                                                                                                  • Alliance Boots UK Retail
                                                                                                                                                                                                                                                                                                  • Apple Retail UK
                                                                                                                                                                                                                                                                                                  • Arcadia Group
                                                                                                                                                                                                                                                                                                  • Argos
                                                                                                                                                                                                                                                                                                  • Asda Group Ltd
                                                                                                                                                                                                                                                                                                  • ASOS (UK retail sales)
                                                                                                                                                                                                                                                                                                  • Bhs Ltd
                                                                                                                                                                                                                                                                                                  • Boden UK
                                                                                                                                                                                                                                                                                                  • British Sky Broadcasting Group plc (BSkyB)
                                                                                                                                                                                                                                                                                                  • Burton
                                                                                                                                                                                                                                                                                                  • Clarks of England USA
                                                                                                                                                                                                                                                                                                  • Co-operative Group
                                                                                                                                                                                                                                                                                                  • Comet Group Ltd
                                                                                                                                                                                                                                                                                                  • Currys
                                                                                                                                                                                                                                                                                                  • Darty Group
                                                                                                                                                                                                                                                                                                  • Daylesford Organic
                                                                                                                                                                                                                                                                                                  • Debenhams Total (GTV)
                                                                                                                                                                                                                                                                                                  • Dixons Retail Plc
                                                                                                                                                                                                                                                                                                  • Dorothy Perkins
                                                                                                                                                                                                                                                                                                  • Empire Direct PLC
                                                                                                                                                                                                                                                                                                  • Empire Stores Group
                                                                                                                                                                                                                                                                                                  • Evans
                                                                                                                                                                                                                                                                                                  • Facebook, Inc.
                                                                                                                                                                                                                                                                                                  • Firetrap
                                                                                                                                                                                                                                                                                                  • Freemans Plc
                                                                                                                                                                                                                                                                                                  • Freeview
                                                                                                                                                                                                                                                                                                  • FreshDirect Inc
                                                                                                                                                                                                                                                                                                  • Game Group
                                                                                                                                                                                                                                                                                                  • Halfords Ltd
                                                                                                                                                                                                                                                                                                  • High and Mighty
                                                                                                                                                                                                                                                                                                  • HMV Retail Ltd
                                                                                                                                                                                                                                                                                                  • Home Retail Group
                                                                                                                                                                                                                                                                                                  • Homebase Ltd
                                                                                                                                                                                                                                                                                                  • House of Fraser Plc
                                                                                                                                                                                                                                                                                                  • J. Sainsbury
                                                                                                                                                                                                                                                                                                  • JD Sports Fashion plc
                                                                                                                                                                                                                                                                                                  • John Lewis Partnership
                                                                                                                                                                                                                                                                                                  • Kingfisher UK & Ireland
                                                                                                                                                                                                                                                                                                  • Land Securities Group
                                                                                                                                                                                                                                                                                                  • Lloyds Banking Group
                                                                                                                                                                                                                                                                                                  • Majestic Wine Warehouse Ltd
                                                                                                                                                                                                                                                                                                  • Marks & Spencer
                                                                                                                                                                                                                                                                                                  • Matalan Ltd
                                                                                                                                                                                                                                                                                                  • Miss Selfridge Retail Ltd
                                                                                                                                                                                                                                                                                                  • Miss Sixty
                                                                                                                                                                                                                                                                                                  • mmO2 plc
                                                                                                                                                                                                                                                                                                  • Monsoon Accessorize Ltd - UK
                                                                                                                                                                                                                                                                                                  • Mothercare Plc
                                                                                                                                                                                                                                                                                                  • Nectar
                                                                                                                                                                                                                                                                                                  • Netto Foodstores Ltd
                                                                                                                                                                                                                                                                                                  • New Look Group Plc
                                                                                                                                                                                                                                                                                                  • Next Group
                                                                                                                                                                                                                                                                                                  • Ocado
                                                                                                                                                                                                                                                                                                  • Otto Group (Multichannel Retail)
                                                                                                                                                                                                                                                                                                  • PC World (DSG UK Computing)
                                                                                                                                                                                                                                                                                                  • Primark Stores Ltd
                                                                                                                                                                                                                                                                                                  • Richer Sounds Plc
                                                                                                                                                                                                                                                                                                  • River Island Clothing Co Ltd
                                                                                                                                                                                                                                                                                                  • Screwfix UK
                                                                                                                                                                                                                                                                                                  • Shop Direct Group
                                                                                                                                                                                                                                                                                                  • Sony (UK) Ltd
                                                                                                                                                                                                                                                                                                  • Superdrug Stores Plc
                                                                                                                                                                                                                                                                                                  • SuperGroup Plc (Retail)
                                                                                                                                                                                                                                                                                                  • Ted Baker
                                                                                                                                                                                                                                                                                                  • Tesco Plc
                                                                                                                                                                                                                                                                                                  • The Carphone Warehouse Plc
                                                                                                                                                                                                                                                                                                  • Toolstation
                                                                                                                                                                                                                                                                                                  • Topman
                                                                                                                                                                                                                                                                                                  • Topshop
                                                                                                                                                                                                                                                                                                  • Travis Perkins PLC
                                                                                                                                                                                                                                                                                                  • Travis Perkins Retail
                                                                                                                                                                                                                                                                                                  • Twitter, Inc.
                                                                                                                                                                                                                                                                                                  • Waitrose Ltd
                                                                                                                                                                                                                                                                                                  • Wallis
                                                                                                                                                                                                                                                                                                  • Walmart Stores (USA)
                                                                                                                                                                                                                                                                                                  • WH Smith PLC
                                                                                                                                                                                                                                                                                                  • Wm Morrison Supermarkets
                                                                                                                                                                                                                                                                                                  • Woolworths Group plc

                                                                                                                                                                                                                                                                                                  Multi-channel Retailing - UK - November 2011

                                                                                                                                                                                                                                                                                                  £1,750.00 (Excl.Tax)