Tuesday, 18 October 2011

ReportsnReports | UK Remote Shopping 2012 – the Main Pillar of MultiChannel Retailing


Growth in the UK remote shopping channel has continued to outperform total retail, with consumers becoming more confident about shopping online and retailers more actively encouraging consumers to visit their websites. We forecast that in 2011 the remote market will grow by 9.6% to £31.7bn, driven by the online channel which now accounts for 82.6% of the remote channel in 2011.
Features and benefits
Understand the main issues influencing the UK remote shopping channel and its impact on retailers and their multichannel operations
With comprehensive analysis of 14 major retailers operating in the channel and five shorter profiles, benchmark sector and retailer performance
Unique 10 year market expenditure, split by online, mail order and TV shopping, with five year forecasts to 2015 will inform strategic growth plans
Strategic insight into key drivers and avenues of growth for retailers within the UK remote retail channel

Highlights
The online market is set to slow over the next five years, to just 7.8% growth in 2015. As a result of this slowdown, transactional websites will need to work harder to achieve sales growth. This will mean that retailers must keep up with the latest advances in technology and introduce features which make the actual transaction easier to complete.
Between 2001 and 2011 the sales of mail order specialists – with online sales excluded – have declined sharply. This market has struggled as a greater proportion of customers become more comfortable about shopping online and the customer base of those who exclusively shop via mail order specialists continues to get smaller.
By 2015, the m-Commerce sector, within online, is set to increase by 5.3 percentage points accounting for 7.2% of the total remote market. Retailers such as Shop Direct Group and Ocado, having developed robust m-Commerce offers, will be in prime position to take advantage of this growing market with an established customer base.
Table Of Contents
EXECUTIVE SUMMARYKey findings
Online growth fuels remote’s resilience;
Traditional mail order sales have continued to struggle;
TV shopping growth slows as digital switchover matures and shift online continues;
Slowing growth in the next five years will force online retailers to work harder;
m-Commerce to become a more important channel for remote retailers;
Credit management will be key;
Amazon continues to lead the way in remote market;
FreemansGrattan Holdings continues to struggle;
While Ocado gains share, launch of Waitrose online poses a threat;
While it needs patience short term, Argos TV should be a success in the long run
Main conclusions
Online growth fuels remote’s resilience
Traditional mail order sales have continued to struggle
TV shopping growth slows as digital switchover matures and shift online continues
Slowing growth in the next five years will force online retailers to work harder
m-Commerce to become a more important channel for remote retailers
Credit management will be key for retailers
Amazon continues to lead the way in the remote market
FreemansGrattan Holdings continues to struggle
While Ocado gains share, launch of Waitrose online poses a threat
While it needs patience short term Argos TV should be a success in the long run
MARKET ANALYSIS & FORECAST
Definition of remote retail
Sales
Remote shopping channels
Channel analysis
Online sales
Total online market
Online market components
Mail order sales
Total mail order sales
Agency
TV shopping
Remote shopping market forecast
KEY ISSUES
As online matures, retailers must evolve offers
Slowing growth of online market will have a significant impact on the overall remote market
As an absolute minimum, a retailer’s online offer must keep up with the latest technology
As ranges expand, retailers must ensure customers can easily filter through to relevant products
New features must be practical and make the transaction easier
Being visually impactful will be important for retailers in particular sectors
Creating more of a community feel to a website will help drive traffic and create a more robust business
Importance of m-Commerce
m-Commerce to be a larger part of the remote market in the next four years
Greater time pressures and better technology will help drive this market
Concerns over payments and usability are the main factors holding back m-Commerce currently
Linking to trusted third parties will help overcome consumer inertia about buying over their phone.
To ensure convenience retailers need a robust search and filtering offer in place
The features available and display options should depend on the platform used
As more customers shop on their mobiles, expectations are rising
Getting the right balance with credit management will be key
Mail order specialists have found credit more in demand now that it has become harder to obtain
While mail order specialists are used to handling credit, there is now more risk attached
To achieve robust sales growth, retailers face a challenging balancing act
Many retailers have turned to profiling but there is a major flaw behind such a system
Retailers becoming more flexible with their credit terms mid-agreement will help with bad debts
For those who default, creating a payment plan is one way a retailer can help a customer repay their debt
Click and collect
Click and collect allows a retailer to participate in online growth without hurting its store network
Main advantage is the greater convenience it offers shoppers
Higher levels of trust and the ease of returning faulty goods are other advantages of click and collect
Pureplay retailers are able to recreate a similar offer by using independent stores as pickup points
The next step for such an offer will be remote retailers operating their own physical collection points
New strategies will be needed to transfer shoppers to online
Online has many advantages over traditional catalogues
Apps and tablet computers take these advantages further
Social media is also being used to create awareness
Transferring customers to shop online drives more frequent purchases and higher basket size
Some resistant to shopping online
Retailers should make their security procedures more explicit
A customer’s purchase history can be used to cut down a retailer’s range to more specific topics
Mail order specialists should incorporate technologies from elsewhere to satisfy agency customers
Once a customer feels confident about shopping online, retailers can aim to increase transaction size
The impact on the TV shopping market of Argos TV
Argos TV a new threat to existing TV shopping channels
Store network a major advantage
Wider range of big ticket items and established own brand will help Argos TV offer
Argos may force TV competitors to be more vocal about their premium offers
Additional Argos customers may help other TV shopping channels
COMPANY DATA ANALYSIS
Channel analysis
Online
Agency mail order
Direct mail order
Door-to-door
TV shopping
Advertising
AMAZON
Exceptional performance
Recent key events
Broadens offer
Proposition
Financials
Sales growth remains strong though continues to slow
Market shares
Outlook
Clothing offer should continue to provide buoyancy
ARGOS
Develops multichannel offer to reverse poor performance
Recent key events
Pulls out stops across all channels
Proposition
Financials
Exposure to bigger ticket markets hampers performance
Check and reserve drives Argos multichannel sales performance
Market shares
Outlook
Argos must continue to develop its offer and improve its like-for-like performance
ASOS
International performance set to drive sales growth
Recent key events
Spreads fashion forward offer internationally and through new channels
Proposition
Financials
ASOS returns to stronger sales growth after dip in 2010
Profit growth remains impressive despite slowing in each of the past three years
International sales continue meteoric y-o-y growth
Market shares
Despite rapid growth ASOS market share remains small
Outlook
Readies itself for next growth phase
AVON
Struggles as economy remains tough
Recent key events
Continues to develop social responsibility credentials
Proposition
Financials
Weak sales growth reflects challenging market
Market shares
Outlook
Higher sales could come from premium lines, online via social networking and men
EBAY
Plans to open more stores to enhance multichannel offer
Recent key events
Develops its mobile and clothing offer
Proposition
Financials
Strong growth through its UK site continues
Market shares
Outlook
Offer development key to traffic and sales
FINDEL
Full potential review presents opportunities
Recent key events
Findel aims to steady the ship through its full potential review
Proposition
Financials
Profits grow despite sluggish sales
Market shares
Outlook
Findel builds on new foundation
FREEMANSGRATTAN HOLDINGS
Exposure to the agency market impacts FGH’s performance
Recent key events
Launches into plus size online and rebrands Oli under Freemans
Propositions
Financials
Sales continue to fall sharply
Market shares
Outlook
FGH running out of time
N BROWN
Plans more stores
Recent key events
N Brown develops multichannel credentials
Proposition
Financials
While remaining positive, sales growth has slowed compared with 2006–09
Market shares
Outlook
Future looks bright for N Brown
NEXT DIRECTORY
Aims to kick start future growth through international expansion
Recent key events
Aims to improve performance by expanding and developing offer
Proposition
Financials
Directory continues to outperform stores
Market shares
Outlook
Directory the main driving force of growth
OCADO
Entry of Waitrose.com will be litmus test for Ocado
Recent key events
Aims to extend offer and reach to fend off competitors
Proposition
Financials
Sales continue to climb as Ocado moves towards profit
Market shares
Outlook
Threat of Waitrose presses but opportunities also abound
QVC
Needs to develop sales via other channels
Recent key events
New channel for beauty, new app and new CEO
Proposition
Financials
QVC on course for second year of stronger growth
Market shares
Lack of channel diversity pulls down QVC share of total remote
Outlook
Growing authority and multichannel keys to long term growth
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