RXUK TOP500 - UK TOP500 REPORT 2020 - Internet Retailing
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RXUK
TOP500
In partnership with
UK TOP500 REPORT 2020
A performance ranking of the largest ecommerce and
multichannel retailers in the UK
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INTRODUCTION From the editor-in-chief Welcome to the RetailX Top500 2020 report by adapting and developing the way that they where this year we’re marking a change of sell, whether that’s through stores, through name from the InternetRetailing Top500. the seamless service that they now offer on The change recognises and reflects the part mobile or through improved merchandising, that InternetRetailing’s research arm RetailX delivery and sustainable packaging options. In plays in this annual listing of the leading previous years, we’ve seen a minority of top multichannel and ecommerce retailers selling retailers work to improve their multichannel in the UK. We believe this sixth annual report, offerings, while the average retailers lagged as with its predecessors, stands apart from the behind. This year that seems to be changing crowd in its performance-led analysis of how as a majority of businesses improve their leading retailers sell in the UK. The research performance in ways that their customers will starts with a Footprint ranking based on size appreciate. Even though much remains to be - of revenues, store networks and web traffic done that general improvement in the wider - before moving on to analyse that footprint in market makes the performance of this year’s terms of performance through six Performance Elite retailers all the more impressive. Our Dimensions: Strategy & Innovation, The warm congratulations to our Elite retailers of Customer, Merchandising, Brand Engagement, 2020: Amazon, Argos, Dunelm, John Lewis, Operations & Logistics and Mobile & Cross- Marks & Spencer and Next. channel. This approach enables us to judge and rank retailers on how well they perform day-to- day in the UK’s changing retail market. In last year’s report, we said that the retail market continued to be turbulent – and so it proved. Uncertainty around Brexit meant that we saw two different days on which the UK might have left the European Union without a deal, a change of Prime Minister and, to end the year, a general election. But the uncertainty continues this year, with retailers still not clear on exactly what Brexit will mean for them. At the same time, traders continue to respond as the way shoppers buy continues to change. Customers are now much more willing to buy more products online – but at the same time they remain uncertain about whether they can afford to buy. Thousands of shops are expected to close over the coming year in what has been described as a retail crisis, while shoppers may also be responding to calls for increased sustainability in the light of climate change. But in 2020, this report suggests, retailers appear to be responding at this time of change © 2020 retailx.net, distributed by InternetRetailing.net February 2020 3
OUR METRICS
OUR METRICS
Our research covered seven Performance Dimensions (see page 44 for more details):
TABLE 1. OUR METRICS
0. FOOTPRINT:
UK retail turnover, ecommerce turnover, web reach and store estate of retail businesses give the ‘heft’ and a preliminary rank. We then
modify and weight that analysis through consideration of the following Dimensions:
1. STRATEGY & INNOVATION:
the extent to which the retailer is adapting for growth, international commerce and customer responsiveness
2. THE CUSTOMER:
measuring the experience from the customer’s point of view
3. OPERATIONS & LOGISTICS:
delivery, returns, collections
4. MERCHANDISING:
displaying and describing products
5. BRAND ENGAGEMENT:
making their brands familiar to the customer and connecting with them
6. MOBILE & CROSS-CHANNEL:
beyond single ecommerce or store channels
Performance clusters beyond their variation in size, reach We are grateful to SimilarWeb
We’ve ranked the UK Top500 and turnover. Throughout 2019, we for sharing data on the visits and
in statistically similar groups. will be continuing our testing and interaction that Top500 websites
Elite retailers have performed measurement of the whole group, receive, and to Pi Datametrics for
at an exceptional level across all with our findings contributing to the sharing data on brand search terms.
Dimensions, statistically separate 2020 ranking.
from the subsequent clusters. In 2019
they are Amazon, Argos, Dunelm, Elite retailers
John Lewis, Marks & Spencer and Judgement Congratulations once more to the
Next. Our congratulations to new Elite Our current system started with the InternetRetailing UK Top500 Elite
retailers Dunelm and Next, to Marks IRUK Top500 in 2015. Since then, retailers for 2019: Amazon, Argos,
& Spencer, which returns to the Elite research methods and metrics have Dunelm, John Lewis, Marks &
after three previous inclusions, and developed steadily. The criteria Spencer and Next.
to Amazon, Argos and John Lewis regarded as cutting edge this year
on retaining their positions from last will necessarily differ from those Ian Jindal,
year. Amazon has the distinction of of last year, since many one- time Editor-in-Chief
being the only retailer to have been innovations have now moved firmly
ranked Elite in all six of the Top500 mainstream.
reports published to date.
Top50 retailers bring us to the
50-retailer point and represent the Knowledge partners
current standard of UK best practice We thank BuiltWith for tracking the
in ecommerce and multichannel Top500’s websites and providing
retailing, exemplifying RetailCraft at information on the software used,
its best. such as ecommerce platform and
Between the Top100 and the payment methods; and Eggplant for
Top500, retailers are grouped in a measuring the performance and load
way that expresses their measured times of Top500 websites on mobile
performance in a way that goes and desktop browsers.
4 February 2020 © 2020 retailx.net, distributed by InternetRetailing.net
CONTENTS & FIGURES
CONTENTS
CONTENTS TABLES
The RXUK Top500 2020 6 1 Research at a glance 4
The Top500 in graphics 8 2 Leading retailers: Strategy & Innovation 19
From our partner 11 3 Leading retailers: The Customer 23
Interview: Doug Gurr of Amazon on customer obsession 12 4 Leading retailers: Operations & Logistics 25
Elite and leading retailers 14 5 Leading retailers: Merchandising 28
New and bubbling under 15 6 Leading retailers: Brand Engagement 31
Strategic overview: The factors driving UK retail change 16 7 Twenty brands with the biggest UK search growth 31
Strategy & Innovation: Strategically thinking 18 8 Leading retailers: Mobile & Cross-channel 33
The Customer: Shopper-friendly retailing 21 9 Definitions 44
Operations & Logistics: How the delivery promise is evolving 24 10 Our metrics 45
Merchandising: Product information 27
Brand Engagement: Engage with customers 30
Mobile & Cross-channel: Convenient service across channels 33 FIGURES
How the store experience is changing 36 1 Top500 sectors 8
Delivery as a service 38 2 Marketplaces, brands, others in the Top500 8
Case studies: H&M and JD Sports 40 3 The most popular ecommerce platforms 8
How the RXUK Top500 fits into RetailX research 42 4 How the Top500 has performed since 2016 9
What constitutes a retailer? 44 5 How the overall index has developed since 2016 9
Research parameters 45 6 Average performance by sector 9
Knowledge partners 46 7 Average performance by Top500 cluster 9
Conclusion 47 8 More mobile apps have predictive search 19
9 How fast retailers respond to queries 22
10 Retailers choose delivery for next-day service 25
11 Fewer retailers offer brand filtering of searches 28
12 Few retailers have digitised their stores 34
13 The RetailX portfolio 43
14 Marketplaces see more UK web traffic 43
MEET THE TEAM
CHLOE RIGBY FERNANDO DOS SANTOS
EDITOR RESEARCH PROJECT MANAGER, RETAILX
Chloe is the editor of InternetRetailing.net and Fernando co-ordinates the timelines for our
an award-winning business journalist. research team.
chloe@internetretailing.net fernando@retailx.net
MARTIN SHAW IAN JINDAL
HEAD OF RESEARCH, RETAILX EDITOR-IN-CHIEF
Martin devises the scope and methods of Publisher, speaker, advisor and NED, Ian leads
InternetRetailing’s research. our editorial and research businesses.
martin@retailx.net ian@internetretailing.net
© 2020 retailx.net, distributed by InternetRetailing.net February 2020 5
UK TOP500 LIST
ELITE TOP 100 TOP 150 TOP 250 TOP 250
AMAZON ACCESSORIZE APPLE ADIDAS MAJESTICWINE
ARGOS AXMINSTER BONMARCHÉ ALDO MAMAS & PAPAS
DUNELM
BEAUTY BAY BOUX AVENUE ALIEXPRESS MASSIMO DUTTI
JOHN LEWIS
BEAVERBROOKS CLARKS ALLSAINTS MATCHESFASHION.COM
MARKS & SPENCER
BODEN COTTON TRADERS ANDERTONS MUSIC MINT VELVET
NEXT
BOOHOO.COM EARLY LEARNING CENTRE APPLIANCESDIRECT MODA IN PELLE
LEADING
BURTON MENSWEAR EBAY BERSHKA MONICA VINADER
ASOS
CARPHONE WAREHOUSE ESTÉE LAUDER THE BODY SHOP MULBERRY
B&Q
BLACKS CLAIRE'S EVANS BRAVISSIMO MYPROTEIN
BOOTS DECATHLON EVERYTHING5POUNDS.COM CALVIN KLEIN NASTY GAL
DOROTHY PERKINS DUNE LONDON FRAGRANCE DIRECT CASS ART THE NORTH FACE
EVANS CYCLES THE ENTERTAINER THE FRAGRANCE SHOP CHARLES TYRWHITT OFFSPRING
H&M ERNEST JONES HOMEBASE CLAS OHLSON OLIVER BONAS
HOLLAND & BARRETT GAME HUGO BOSS CREW CLOTHING COMPANY OYSHO
JD SPORTS
GO OUTDOORS JOJO MAMAN BÉBÉ DR. MARTENS PANDORA
NEW LOOK
H.SAMUEL KURT GEIGER THE EDINBURGH WOOLLEN MILL PAUL SMITH
RIVER ISLAND
HOBBYCRAFT LAPTOPSDIRECT ELLIS BRIGHAM MOUNTAIN SPORTS PAVERS
SAINSBURY'S
HOTEL CHOCOLAT LONG TALL SALLY ESPRIT PEACOCKS
SCHUH
ICELAND M&CO FARFETCH PHILIPS
SCREWFIX
SPACE.NK IKEA MAINLINE MENSWEAR FEELUNIQUE.COM POST OFFICE SHOP
TESCO JACAMO MARISOTA FOOT LOCKER PRETTYLITTLETHING
TOOLSTATION KAREN MILLEN MENKIND FURNITURE VILLAGE PULL & BEAR
WICKES L'OCCITANE MICROSOFT GAP QUIZ
WILKO LAKELAND MISS SELFRIDGE GABOR RICHER SOUNDS
TOP 50 LAURA ASHLEY MISSGUIDED GEAR4MUSIC.COM ROMAN ORIGINALS
AO LITTLEWOODS NIKE GEARBEST RYMAN
AMERICAN GOLF LOUIS VUITTON OCADO GOLDSMITHS SCAN
ANN SUMMERS MATALAN OUTDOOR & COUNTRY GUCCI SKECHERS
ASDA MILLETS PARTYCITY GUITARGUITAR SPECSAVERS
CHAIN REACTION CYCLES MONSOON PHASE EIGHT HARVEY NICHOLS SPORTSBIKESHOP
COTSWOLD OUTDOOR MORRISONS RADLEY HOBBS LONDON SUPERGA
CURRYS PC WORLD MOSS BROS. REEBOK HOME BARGAINS SWEATY BETTY
DEBENHAMS MOUNTAIN WAREHOUSE REISS HOTTER T.M. LEWIN
EURO CAR PARTS OVERCLOCKERS UK ROUTE ONE IRONMONGERYDIRECT TK MAXX
FAT FACE PAPERCHASE SALLY JYSK TED BAKER
FOOTASYLUM THE PERFUME SHOP SELECT JACK & JONES TESSUTI
HALFORDS ROBERT DYAS SELFRIDGES JACK WILLS THOMANN
HOUSE OF FRASER SEASALT CORNWALL SHOPDISNEY JAEGER THOMAS SABO
JD WILLIAMS SIMPLY BE SMYTHS TOYS JIGSAW THORNTONS
JESSOPS SIZE? SNOW+ROCK JOE BROWNS TOMMY HILFIGER
NISBETS SKATEHUT.CO.UK SPORTSDIRECT.COM JONES BOOTMAKER TRESPASS
OASIS SUPERDRUG TOPMAN JOULES TRIPP
OFFICE TOPSHOP TOPPS TILES LACOSTE USC
PETS AT HOME TRAVIS PERKINS UGG LEVI'S UNDER ARMOUR
SHOE ZONE URBAN OUTFITTERS VICTORIAN PLUMBING LLOYDS PHARMACY VANS
SUPERDRY WAITROSE WHSMITH LOOKFANTASTIC VICTORIA'S SECRET
UNIQLO WATERSTONES WALLIS LOVEHONEY WAREHOUSE
VERY WEX PHOTOGRAPHIC WHISTLES LUSH WELDRICKS PHARMACY
THE WORKS WHITE STUFF WIGGLE MAC COSMETICS THE WHITE COMPANY
YOURS CLOTHING ZARA ZALANDO MACHINE MART WHITTARD OF CHELSEA
6 February 2020 © 2020 retailx.net, distributed by InternetRetailing.net
EUROPE TOP500
RETAILX
REPORT
UK TOP500
2019
TOP 350 TOP 350 TOP 500 TOP 500 TOP 500
ANTHROPOLOGIE HEMA ATS EUROMASTER GAK PHOTOBOX
ARCO HOLLISTER AGENT PROVOCATEUR GOG.COM PLANET ORGANIC
AUSTIN REED HUGHES ELECTRICAL ALDI GARMIN PLAYSTATION STORE
AVON ITS ARIA TECHNOLOGY GEOX PLUMBASE
BALENCIAGA INTERFLORA ARMANI GLASSES DIRECT PRADA
BANANA REPUBLIC JOY ASICS GOPRO PRINTING.COM
BATHSTORE LAITHWAITE'S ASPINAL OF LONDON GOOGLE PRO-DIRECT
BENSONS FOR BEDS LANDS' END ASUS GRAZE PROTYRE
BURBERRY LEGO BT SHOP GUESS RALPH LAUREN
COS LINDEX BANG GOOD HACKETT RAPHA
CALENDAR CLUB LINKS OF LONDON BARBOUR HAWES & CURTIS RAZER
CARD FACTORY MANDM DIRECT BAREMINERALS HEAL'S REDBUBBLE
CARPETRIGHT MANGO BARKER & STONEHOUSE HERMÈS REGATTA OUTDOOR CLOTHING
CATH KIDSTON MAX SPIELMANN BERRY BROS. & RUDD HOBBY LINK JAPAN RICH TONE MUSIC
CEX MICHAEL KORS BETTYS HOTLINE ROWLANDS PHARMACY
CHAOS CARDS MOLE VALLEY FARMERS BLACKWELL'S INTERSPORT THE ROYAL MINT
CHARLES CLINKARD MONKI BOSE J CREW SCS
CLINIQUE MONTBLANC BRANDON HIRE STATION JML SCOTCH & SODA
COAST MUSIC MAGPIE BROWNS FASHION JTF SCRIBBLER
COSTCO MUSTO BUILD-A-BEAR WORKSHOP JACQUES VERT SEE TICKETS
THE COTSWOLD COMPANY NELLY.COM CARHARTT JEWSON SEVENOAKS SOUND AND VISION
CROCS NESPRESSO CHRISTIAN LOUBOUTIN JIMMY CHOO SNEAKERSNSTUFF
CYCLESURGERY NET-A-PORTER CHURCH'S JOHN SMITH'S STEAM
DEICHMANN NINTENDO CLINTONS JUNO RECORDS STUDIO (EXPRESS GIFTS)
DEMON TWEEKS NOTONTHEHIGHSTREET.COM CONVERSE KENZO SUNGLASS HUT
DIESEL NOVATECH CRABTREE & EVELYN KIEHL’S SUPREME
DIOR ORVIS CRAGHOPPERS KÄRCHER SWAROVSKI
DREAMS PERSONALISED GIFT SHOP CROMWELL L.K.BENNETT SWATCH
DULUX DECORATOR CENTRES PRETTY GREEN CRUISE LN-CC TATE SHOP
END. PUMA CULT BEAUTY LA PERLA THOMAS PINK
EBUYER.COM QVC DFS LEEKES TIMPSON
EURONICS RS COMPONENTS DELL LENOVO TOMTOM
F.HINDS THE RANGE DENBY LOAF TRIUMPH
FITNESS SUPERSTORE ROHAN DESIGUAL LOGITECH UK FLOORING DIRECT
FLANNELS ROMWE DIGIKEY LYLE & SCOTT UNITED COLORS OF BENETTON
FOSSIL RUSSELL & BROMLEY DISTINCTIVE DOORS MADE.COM VAPE CLUB
FOYLES SAMSUNG DOBBIES GARDEN CENTRES MENNACE VERSACE
FRASER HART SLATERS DOLLS KILL MOBILE PHONES DIRECT VITALSOURCE
FRENCH CONNECTION SOLETRADER DOVER STREET MARKET MOONPIG VIVIENNE WESTWOOD
G-STAR RAW STRADIVARIUS ECCO MUJI WARREN JAMES
GAMES WORKSHOP SURFDOME FARROW & BALL MUSCLE FOOD WATCHES OF SWITZERLAND
GANT TJ HUGHES FENDI NATIONAL TRUST SHOP WATCHFINDER
HMV.COM TIFFANY & CO. FIELD & TREK NEPTUNE WEDGWOOD
HP TOAST FIRED EARTH NEW BALANCE WEST ELM
HABITAT UK ECIG STORE FITFLOP OAKLEY WISH
HAMLEYS WALLS AND FLOORS FITBIT OPONEO WOLSELEY
HARRODS WEEKDAY FOOTPATROL THE ORIGINAL FACTORY SHOP WYEVALE GARDEN CENTRES
HARVEYS WYNSORS WORLD OF SHOES FORBIDDEN PLANET PC SPECIALIST YANKEE CANDLE
HATTONS YOOX FRED PERRY PATAGONIA YESSTYLE
HAWKSHEAD COUNTRY WEAR & OTHER STORIES FUNKYPIGEON.COM PEPE JEANS LONDON YVESSAINTLAURENT
© 2020 retailx.net, distributed by InternetRetailing.net February 2020 7
ABOUT THE TOP500
FIGURE 1. FOUR IN TEN OF THE TOP500 Many Top500 retailers sell goods across several different sectors.
SELL FASHION PRODUCTS The ‘other’ category illustrates the diversity of the retail industry
Fashion accessories 211
Clothing: Fashion 202
Footwear: Fashion 183
Homeware 100
Footwear: Sports and leisure 97
Clothing: Sports and leisure 92
Jewellery 80
Consumer electronics 61
Cosmetics 60
Sports and outdoor equipment 55
Trade tools and equipment and DIY 43
Children's toys and accessories 42
Home and industrial appliances 38
Stationery and craft 31
Health 21
Software 21
Grocery 20
Drink 18
Music, film, TV 18
Garden 17
Automotive goods 17
Books 16
Utilities 15
Ready-made food 11
Other 98
0 50 100 150 200 250
FIGURE 2. ALMOST FOUR IN TEN TOP500 RETAILERS FIGURE 3. SALESFORCE AND MAGENTO ENTERPRISE ARE THE
ARE DIRECT-SELLING BRANDS MOST POPULAR ECOMMERCE PLATFORMS USED BY THE TOP500
Researched in collaboration with RetailX knowledge partner BuiltWith
7
16.0%
29.2%
182
14.6%
311
6.0%
9.4%
6.2%
9.2% 9.4%
Sell mostly third-party label products
Sell mostly own-label products
Salesforce Commerce Cloud IBM Websphere Commerce
Operate marketplaces
Magento Enterprise Oracle Commerce
Amplience Magento
Hybris Other
8 February 2020 © 2020 retailx.net, distributed by InternetRetailing.net
RETAILX UK TOP500
MEASURING PERFORMANCE
We score performance in tests to create an index value. The Aggregated Index Value (AIV) is the sum of the test results. This gives
us a way to compare performance by using relative AIV. It’s these relative values – between years, sectors, or clusters – that this
page shows. A higher AIV represents greater capability and performance. Our benchmarking suggests that Top500 performance
has markedly improved in most areas in recent years
FIGURE 4. HOW THE TOP500 HAS PERFORMED SINCE 2016
The Aggregated Index Value by performance Dimension 2016-2020
FIGURE 5. HOW THE OVERALL INDEX HAS DEVELOPED SINCE 2016
The Aggregated Index Value of the Top500 Index 2016-2020
Strategy &
Innovation Dimension
300 +9.8%
+15.2% +4.9%
250
+32.7%
Mobile & 200
The Customer
Cross-channel Dimension
Dimension 150
100
50
0
2016 2017 2018 2019 2020
Brand Operations
Engagement & Logistics
Dimension Dimension
2016
2016 Merchandising 2017
FIGURE 6. AVERAGE PERFORMANCE BY SECTOR
2017 Dimension 2018
2018
The Average Index Value by sector where 1.0 is the theoretical
2019
maximum. Some retailers belong
2020
to multiple sectors; sectors with
2019
20 or more retailers are shown
2020
Home and industrial appliances
FIGURE 7. AVERAGE PERFORMANCE BY TOP500 CLUSTER Grocery
This chart shows how much better the average retailers in the Children's toys and accessories
top clusters perform, compared to those in the bottom clusters Cosmetics
Entire Sports and outdoor equipment
Top500 Footwear: Sports and leisure
Clothing: Sports and leisure
lowest Top250 Top100 Leading Health
cluster
Homeware
Footwear: Fashion
Trade tools and equipment and DIY
0.537 0.607 0.67 0.764 Clothing: Fashion
0.4 0.458 0.587 0.64 0.713 0.8
0.556 Fashion accessories
Jewellery
Consumer electronics
Top350 Top150 Top50 Elite Direct-selling brands
Stationery and craft
Software
© 2020 retailx.net, distributed by InternetRetailing.net February 2020 9
Become a
RETAILX SECTOR ANALYST REPORT DEFERRED PAYMENTS: 2020
BEAUTY & COSMETICS
it’s FREE for retailers
A solution within the ‘Payments’ category of RetailDNA
Member
INTRODUCTION
Beauty & Cosmetics brands have long relied on celebrity endorsements to promote
products and department stores to sell products. This is changing. While the rise of online
Welcome to the RetailX Sector Analyst
Reports, where we combine RetailX’s
RX001: February 2020
shopping has had less of a direct impact on the Beauty & Cosmetics sector than might four years of in-depth company per-
be expected1, department stores – a key physical channel to consumers for Beauty & formance research with analysis of the
Cosmetics brands – have borne the brunt of the shift to online retail. The indirect impact sector dynamics.
on the Beauty & Cosmetics sector has been a loss of consumer coverage.
Our reports outline the strategic and
Beauty & Cosmetics companies have responded by investing in direct-to-consumer (D2C) commercial context in which the best
business models, as well as by setting up internal venture capital funds to capitalise on retailers and brands perform in their
the potential from startup brands and technology vendors. Disruptive startups, such as market sectors. RetailDNA Solutions Library
Revolution Beauty, are challenging the status quo by adopting Fast Fashion techniques.
tions
mer
gy
duct
YouTube, Instagram and other social media platforms have impacted on how consumers Let us know of sectors you would like to Functional Categories
Strate
Opera
Custo
perceive celebrity, leading to the rise of social influencers. Some of these have gone on see us cover: research@retailx.net
Pro
to develop their own product ranges, notably Huda Kattan, who in 2018 was ranked 37th
1. Product Development and Design
on the Forbes list of America’s richest self-made women2.
DEFINITION 2. Buying and Sourcing
SHARELINES DIRECT-TO-CONSUMER OR D2C COMMERCE 3. Merchandising and inbound logistics
The rise of ecommerce has only indirectly impacted Beauty & Cosmetics is when brands sell or promote their
products directly to consumers rather than 4. Inventory Management and Distribution
Celebrity marketing has been disrupted and diluted by the rise of influencers via wholesalers and retailers.
The companies covered in this report are, on average, 100+ years old 5. Business Management
ONLINE SALES In 2018, these represented
Leading Beauty & Cosmetics companies are now operating internal VC funds c12.5% of the Beauty & Cosmetics market 6. Marketing
Sector Reports Blue Papers
Augmented reality (AR) applications are gaining traction in Beauty & Cosmetics worldwide. Sales patterns vary by territory. A solution within the ‘Payments’
The Fast Fashion business model is being reinvented in the cosmetics space
For example, in China, consumers made 7. Selling ‘Payments’
23% of all beauty retail purchases online in subcategory of ‘Selling’
8. Fulfilment
2017 (source: Credit Suisse). Sector leader
1. https://fashionista.com/2017/05/beauty-products-packaging-shopping-habits L’Oréal disclosed that 11% of its sales were
2. www.harpersbazaar.com/uk/beauty/a26320975/influencers-beauty-collaborators-brands/ 9. Customer Service and support
generated online in 2018.
10. Returns
11. Retention
TL;DR 12. Growth and Market Development
The internet abbreviation ‘TL;DR’ means ‘Too Long; Didn’t Read’. In that spirit, here THOMAS ANDERSSON
13. Test and Optimise
are some consideration points from this report: thomas@retailx.net
• been
Beauty & Cosmetics companies have
indirectly impacted by the shift to
new influencer-driven brands. This has
recently extended into technology
Thomas is a retail sector analyst
with more than a decade of
experience starting and divesting a multichannel
14. Physical Retail
multichannel retailing but the effect on investments, such as L’Oréal’s acquisition retail business. He is a grants evaluator for
Learn from and
Vinnova, a Swedish R&D government agency
department store chains, traditionally of Modiface, a technology it recently
a key retail channel for the sector, has used to promote its brands on Amazon MARTIN SHAW
been far greater. This has affected the
visibility of Beauty & Cosmetics brands
• Acquiring D2C brands has become an
important tool for the larger Beauty &
martin@retailx.net
Martin devises the scope and
InternetRetailing Blue Paper - Solutions to commercial questions
• Social
methods of RetailX’s research
media has had a fundamental Cosmetics companies as they evolve Blue Papers focus on solutions to commercial opportunities and Publisher: InternetRetailing InternetRetailing
challenges in multichannel retail and digital direct sales. 123 Cannon Street
impact on the sector. The rise of their business models CEO: Ian Jindal
• RetailX Our White Papers, Sector Reports and Top500 performance London, EC4N 5AU
influencers has diluted the marketing forecasts a further move towards
CEO: Ian Jindal Editor: Alex Sword
power of celebrities while increasing the Head of Research: Martin Shaw rankings set out the board-level discussion for commercial success Tel: 020 7062 2525
D2C, which will continue as the relative Senior Analyst: Thomas Andersson Section: Payments and our Blue Papers examine the point solutions, technologies Commercial Director:
number of relationships that brands need Web: www.internetretailing.net
importance of ecommerce over the Commercial Director: Andy James and systems that form part of the solution. Andy James
to manage Vendor: Klarna andy.james@internetretailing.net
high street grows. This move will be Design: Marzena Zychowicz
• Beauty
Drawn from our comprehensive industry directory of technologies
In the last five years, four of the Top 10 further accelerated by entry into new Address: RetailX, 123 Cannon Street Product: Pay later and services in use by our Top500, RetailDNA, our Blue Papers Designer: Julia Webber
London, EC4N 5AU
& Cosmetics companies have geographical markets where there are form a regularly-updated library of actionable, proven solutions.
© 2019 RetailX Limited
created internal venture funds to acquire no historical reseller relations
RXS009: Published in London, © 2019 RetailX Limited, www.retailx.net Page 1 of 28
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best practices employed Growth 2000 Brand Index
by Top500 retailers In partnership with 2020 Reports
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Collaboration – the key
to smart acquisition
Finding and retaining new customers is never easy but, as Luke Griffiths,
UK General Manager at Klarna explains, businesses don’t have to go it alone
A decade of retail disruption and the consumers we spoke to said they are offer a differentiating service to draw
technological advancement has made drawn to retailers for the first time by customers in, we are also investing
the battle to gain and retain customers pop-up shops and real-life interactions heavily in building our brand – creating
even harder, with the cost of doing so with brands. This sentiment was felt a halo effect that helps drive growth for
continually increasing. But does it need most strongly among the ‘experience our partners too.
to be? Is there a smarter way to ‘hack’ generation’ – almost one in five (18%) of A recent study by consultancy Kearney
the acquisition process? As retailers those aged 16-24 – who hold tomorrow’s found that nearly 40% of shoppers (37%)
look for effective ways to grow during purchasing power. According to over said that if making a purchase costing
the next decade, let’s look at how leaning a third (35%) of respondents, it is even £250 or more, they would prefer to buy
on partners like Klarna can change the enough for retailers to be associated from a retailer that offered a ‘buy now,
traditional acquisition model. By using with fun content experiences rather than pay later’ option.
collaboration as a tool to tap into a pre- executing them themselves. With Klarna, retailers can ‘hack’ the
engaged and loyal customer base at a But it’s not just about pop-ups and acquisition process by gaining immediate
fraction of the cost, retailers can win, experiential. Consumers also place access to pre-engaged and already loyal
grow and build loyalty for the long term. an enormous amount of value on the consumers, at a significantly lower cost
logistical experience they have with than traditional methods of acquiring
retailers, and with convenience almost new customers. This lowers upfront
The changing landscape as important as cost. 28% of the acquisition costs, in turn increasing the
The purchase journey has become consumers we spoke to said that a good total lifetime value by allowing retailers
complex and non-liner, with both new returns process would encourage them to focus the saved money on nurturing
entrants and technologies shaking up to make a purchase, while 26% rely on and advocacy. What’s more, the unique
the traditional shopping experience next- or same-day delivery options. combination of convenience, brand
by adding everything from unlimited Meanwhile, 38% are more likely to appeal and user experience delivered by
inspiration to a plethora of new ways to shop with a brand or retailer that offers Klarna significantly boosts engagement,
pay. Is this change a threat? Yes, but it’s flexible payment options. positive sentiment and propensity to
also an exciting opportunity for retailers spend over time.
to evolve their approach to engaging If the last decade was about
with consumers and, as a result, to drive The power of partnerships change, this next one should be about
longer term loyalty. It’s a lot to think about but the good collaboration. By actively seeking out
So, what do today’s increasingly news is that retailers don’t need to go partners to join forces with, retailers
demanding customers expect? In it alone. Help is at hand, though not can create closer connections with
a recent study, we commissioned necessarily through traditional models. customers. It’s the smart way to win the
interviews with over 2,000 UK shoppers While retailers might once have looked gain and retain game.
to find out. It transpires that, in the to advertisers or affiliates to engage
new era of consumerism, emotional and acquire customers – spending a
connection is a greater driver of loyalty lot in the process – smart retailers are ABOUT KLARNA
and advocacy than price or product. now forging partnerships with service With Klarna, customers can shop at their favourite
providers in order to deliver big benefits. online stores and pay later, getting what they
Klarna is one such provider that love today. For the last 14 years, Klarna has
The experience economy is pioneering a new approach to been connecting major retailers with millions
Emotional connection comes from powerful partnerships. Not only do our of customers around the world, allowing safe,
customers’ experiences. One in ten of smooth and flexible payment options secure fee- and interest-free payment options.
© 2020 retailx.net, distributed by InternetRetailing.net February 2020 11INTERVIEW
A story of customer obsession
Amazon is only the RXUK Top500 Elite retailer to have appeared in the top ranking
in all the Top500 reports so far. Chloe Rigby asked Doug Gurr, UK country chair,
about the Amazon approach to retail
Amazon is, by almost
two decades, the
youngest retailer
to feature in the
Elite ranking of the
RXUK Top500 2020.
Yet the 21-year-old
is the only one to have featured in that
top ranking every year since the series
was launched in 2015. It’s done that
despite having what some might see
as disadvantages.
It’s an online-only retailer in a
multichannel and ecommerce industry
that has discovered the huge advantage
of shops as a place to collect and return
online orders. It also broke into an
industry dominated by long-standing
heavyweight retailers, and it did so at a
Copyright © Amazon
time when shoppers did – and still do –
prefer to buy in shops. But in a relatively
short period of time, the retailer has led
a change in the way shopping works,
Amazon’s extensive locker network supports its high level of delivery promises
both for its own customers and for
those of other retailers. But how?
Doug Gurr, who leads Amazon in the
UK, says its strategy is simple – it starts we will continue to measure ourselves Investing in talent
and ends with the customer. in terms of customer-centric metrics. In order to deliver that innovation for the
We invest for the long term and will customer, the retailer invests heavily in
continually refine and improve our developing talent across the UK. “We
Customer obsession offerings based on customer feedback.” have ramped up UK investment to house
“At Amazon, everything we do is If Amazon can’t easily give the 1,000 additional highly-skilled roles in
underpinned by customer obsession, customer what they want, it stands Manchester, Edinburgh and Cambridge,
so the customer is most important to ready to make it up. Amazon’s second while across Europe, we will be providing
us now and always will be,” says Gurr, key focus is firmly on innovation. “We space for over 5,500 highly skilled
Amazon’s UK country chair. “It is the love to invent for our customers,” says researchers and developers working
fundamental principle that drives our Gurr. “When we are innovating, we across Amazon’s 25 development centre
business today all around the world. always start with the customer and sites,” says Gurr. “These jobs range from
“Our strategy for customer obsession work backwards, striving to provide machine learning scientists, robotics
is simple – start with the customer and them with ever-better convenience, engineers and solutions architects to
then work backwards. Looking ahead, selection and value.” software, hardware and flight engineers.”
12 February 2020 © 2020 retailx.net, distributed by InternetRetailing.netINTERVIEW
Copyright © Amazon
Amazon is halfway through a year-long pilot to use pop-up stores to work with smaller retailers that have built their businesses online. It is working
with Enterprise National to launch ten ‘Clicks and Mortar’ over a year. The first, shown above, opened in Manchester in June, and represented a
move onto the UK’s high street for a retailer that has previously sold only online. About 100 small businesses – the kind of businesses that already
sell on its marketplace website – are expected to sell through Clicks and Mortar shops. In 2018, 58% of products sold on Amazon’s site were sold
by smaller sellers
Such investment is set to continue with the type of retailers that sell on
well into the future. “In 2020 and beyond, its own website (see picture caption
we will keep innovation competitive by “We are delighted to be included above). “In June 2019, we launched
continued investment in hiring and in the RetailX UK Top500. At Clicks and Mortar, a pilot programme
training a diverse workforce,” says to help up-and-coming online brands
Gurr. “At Amazon, we believe the key Amazon, we have a relentless sell in store for the first time,” says
to innovation is diversity – whether focus on the best selection, Gurr.” By working with small business
that is having global R&D (research support network Enterprise Nation,
and development) teams across
prices and buying experience we have helped more than a hundred
geographies to understand local issues, for our customers, so it is a small online businesses test physical
or encouraging more women to enter retail for the first time with Clicks and
STEM (science, technology, engineering
great privilege to be included Mortar pop-ups in Manchester, Cardiff,
and mathematics) careers through as a top retailer” Doug Gurr, UK Edinburgh, Sheffield and Leeds, with
our Amazon Amplify programme. We country chair, Amazon more to come this year.”
want to attract and retain the best and Despite the retailer’s success so far, it
brightest talent across the world to says it won’t rest on its laurels. Instead,
foster greater innovation and raise the it still believes there’s much more to
bar for customers.” Gurr points out that in December 2019, do. “At Amazon, we often say, ‘It’s still
only 21.3% of UK retail sales were Day One’,” says Gurr. “We’ve only just
made online, according to the Office begun and there’s still so much more to
Why stores matter for National Statistics (ONS). That come. In truth, none of us know where
Despite its role as a pureplay retailer, suggests, he says, that, “79% of UK customers will take us next. That is a
Amazon is clear that it represents shopping by value remains in physical challenge, but an exciting one, and that
only one part of retail, and that shops stores.” The Amazon response? To is the beauty of innovating on behalf of
remain important to its customers. launch its own stores in partnership our customers.”
© 2020 retailx.net, distributed by InternetRetailing.net February 2020 13ELITE AND LEADING RETAILERS
Stand-out performers
Multichannel retailers dominate the RXUK Top500, where pureplays can compete
only due to exceptional performance, primarily in operations and logistics
The RetailX Top500 – previously the occasions. But Dunelm moves straight up to the
InternetRetailing Top500 – has tracked the top echelon, having been classed as a Leading
leading ecommerce and multichannel retailers retailer on only one previous occasion, in 2018.
that sell in the UK since 2015. At the top of the Elite retailers Amazon and John Lewis can be
index are two groups that highlight the very classified as ‘department’ type retailers, selling
best performing retailers in UK retail. The across a number of distinct categories. The
Elite group features those at the cutting edge same is true, to an extent, for Marks & Spencer,
of performance, while Leading retailers are which sells clothing, homewares and food, and
those that demonstrate best practice across also Next, which trades in the fashion and
their businesses. Both lists change from year homewares categories. While Dunelm too has
to year, driven in part by the metrics selected a department-style structure, that structure is
in the Strategy & Innovation Dimension to best firmly focused around homewares.
reflect retail state-of-the-art. It’s notable that this year there are no
supermarkets ranked Elite, after three years
in which at least one grocer, variously Asda,
Elite retailers Sainsbury’s and Tesco, has consistently
Six retailers appear in this year’s Elite group: appeared in this ranking.
Amazon, Argos, Dunelm, John Lewis, Marks &
Spencer and Next. Amazon is the only retailer
to have appeared in the Top500 Elite every year Leading retailers
since the index was first compiled in 2015. Its The Leading group this year features 19
six top rankings are significant because it is retailers. Fashion clothing is the largest
the only online-only retailer ever to have been category to be represented in the group. Asos
named an Elite retailer, reflecting the way it is the only pureplay in a group of five that also
has used its performance in Operations and includes Dorothy Perkins, H&M, New Look and
Logistics to rival those with stores. River Island.
That’s because a company’s size, as measured Asda, Sainsbury’s and Tesco all appear from
in the Footprint Dimension, accounts for 30% of the supermarket sector, while health and
its ranking in the Top500 – and most of the UK’s beauty is represented by Boots, Holland &
largest retailers are multichannel, selling both Barrett and Space NK – the latter making its
online and through shops. first appearance.
Argos and John Lewis come closest to Trade and DIY tools and equipment retailers
rivalling Amazon’s track record. Both appear are well represented by B&Q, Toolstation and
in this category for the fifth time, having been Wickes. Wilko also makes an appearance,
ranked Elite all but one year. Argos was ranked although it also sells in categories from health
Leading in 2017, as was John Lewis in 2018. and beauty through to stationery, crafts and
Marks & Spencer is ranked an Elite retailer toys. Footwear retailer Schuh is ranked Leading
for the fourth time, having been ranked Leading for the fourth time, sports clothing businesses
in 2016 and 2019. Next and Dunelm both JD Sports and Evans Cycles both for the second
appear for the first time. Next has previously time, and outdoor retailer Blacks makes its first
been classed as a Leading retailer on four appearance in the group.
14 February 2020 © 2020 retailx.net, distributed by InternetRetailing.netNEW AND BUBBLING UNDER
NEW AND BUBBLING UNDER
New retailers enter the RXUK Top500 each year, but many more lie just on the other side of the Top500 borderline. Here we list the 44
new members for 2020 and the ‘bubbling under’ British retailers that are close to featuring in the index. This ‘bubbling under’ group are
the largest retailers in the Growth 2000 index and its 150 members will feature in the next report in that series.
TABLE 1. NEW THIS YEAR
PERSONALISED GIFT
BALENCIAGA CLINTONS HEMA LYLE & SCOTT WALLS AND FLOORS
SHOP
BERRY BROS. & RUDD CROCS HOTLINE NASTY GAL PRO-DIRECT WOLSELEY
BRANDON HIRE STATION CRUISE INTERSPORT NATIONAL TRUST SHOP PROTYRE YOOX
BROWNS FASHION DOLLS KILL JACQUES VERT NELLY.COM RAZER YVESSAINTLAURENT
BT SHOP EURONICS JOY OPONEO ROWLANDS PHARMACY
CARHARTT FITFLOP LA PERLA PATAGONIA TOAST
CHRISTIAN LOUBOUTIN GEARBEST LN-CC PC SPECIALIST UK FLOORING DIRECT
CHURCH'S GOG.COM LOAF PEPE JEANS LONDON VIVIENNE WESTWOOD
TABLE 2. BUBBLING UNDER
ABEL & COLE CAMPER GOUSTO LIGHTINTHEBOX REVOLUTION BEAUTY THOMPSON & MORGAN
ABERCROMBIE & FITCH COMPLETE CARE SHOP GRAILED LINZI ROKIT TIMBERLAND
ABSOLUTE-SNOW.CO.UK CORSAIR GRATTAN LIZ EARLE SAMUEL WINDSOR TISO
ACE (EXPRESS GIFTS) CREATE AND CRAFT GREEN MAN GAMING LOVEKNITTING.COM SECRETSALES TOOLSTOP
ACNE STUDIOS CROCUS GROWELL MAGIC MADHOUSE SELECT SPECS TREDZ
ALLBEAUTY DERMALOGICA GYMSHARK MAISONS DU MONDE SHOPTO URBAN INDUSTRY
AMARA DOLCE & GABBANA HTC MAJE SKAGEN VERO MODA
AMBROSE WILSON DRONESDIRECT HAWKIN'S BAZAAR MARC DARCY SMYTHSON VESTIAIRE COLLECTIVE
ANGLING DIRECT DROP HELLOFRESH MERLIN CYCLES SNAPFISH VIAGOGO
APPROVED FOOD DUNNES STORES HIGH & MIGHTY MILITARY 1ST SOCIETY6 VICTORIAPLUM.COM
ARMANI EXCHANGE EMMA BRIDGEWATER HORNBY MOBILES.CO.UK SOCKSHOP VIKING
BAKER ROSS ENVATOMARKET HUSH CLOTHING MOLTON BROWN SOFA.COM VIRGIN WINES
BELKIN EPSON I SAW IT FIRST MR PORTER SPORTPURSUIT VISTAPRINT
BLACK CIRCLES ESPARES IDEAL WORLD NEWEGG SPORTSSHOES.COM WACOM
BLINDS2GO EVE SLEEP THE IDLE MAN NOTCUTTS SSENSE WATCH SHOP
BONDARA FASHION EYEWEAR IHERB THE OUTNET STANLEY GIBBONS WAYFAIR
BOOKDEPOSITORY.COM FASHION NOVA IN THE STYLE PATROL BASE STELLA MCCARTNEY WEIRDFISH
THE BOOK PEOPLE FASHION WORLD INSTANT PRINT PERUVIANCONNECTION STERLING FURNITURE WESTERN DIGITAL
BOX.CO.UK FEATHER & BLACK JAPAN CENTRE PETER CHRISTIAN STUBHUB THE WHISKY EXCHANGE
BRADFORDS FORTNUM & MASON JARROLD PREMIER MAN SUPERBUY WOLF & BADGER
PROFESSIONAL MUSIC
BRANDALLEY FREE PEOPLE KALEIDOSCOPE SUPERFI WOODHOUSE CLOTHING
TECHNOLOGY
BRORA.CO.UK FREEMANS.COM KATE SPADE QD STORES SÉRAPHINE WORDERY
TLC ELECTRICAL
BULK POWDERS FURNITURE123 KWIK FIT RAY-BAN ZAVVI
SUPPLIES
CCL COMPUTERS GEMPORIA LEISURE LAKES BIKES RESERVED TAILS ZEE & CO
THE CAMBRIDGE GETTINGPERSONAL.
LIBERTY LONDON REVERB TEESPRING ZOOPLUS
SATCHEL COMPANY CO.UK
© 2020 retailx.net, distributed by InternetRetailing.net February 2020 15STRATEGIC OVERVIEW
The factors driving change in UK retail
Leading UK retailers are being pushed to perform in a highly competitive retail
environment. The results of this can be seen in this year’s Top500 research
UK retailers are working steadily to improve their retail landscape. David Fox, co-head of retail
performance online and across retail channels agency at Colliers, has said that CVA usage
as they trade at this time of ‘retail crisis’. Yet a has lowered rents, threatening the viability of
challenging environment appears to be fostering shopping centres. One international retailer,
both innovation and a fresh commitment to IKEA, is reported to have benefited from bargain
giving shoppers the retail experiences that prices to buy a London shopping centre. It now
work for them, whether they prefer to buy and plans to open its own small format store in
browse in-store or online from desktop or mobile Hammersmith King’s Mall.
websites and apps, or social media, or across all
the channels that are relevant to them.
‘In the ever-changing landscape
Setting the context retailers are now faced with, it’s more
Stores are currently closing across the UK in
what the Centre for Retail Research (CRR) has
important than ever to evolve and be
termed a “retail crisis”. It predicts that 17,556 agile, efficient and deeply connected
shops will close this year – up from the 16,073
that it recorded closing during 2019. In January
to our customers’
2020 alone, department store Debenhams
and nursery retailer Mothercare both shut
stores that had been a familiar presence on According to the British Retail Consortium, last
UK high streets for many years. Professor year was retail’s worst year on record, marked as
Joshua Bamfield, director of the CRR, says it was by the first ever overall decline (0.1%) in
the closures come at a time when customers annual retail sales, while online non-food sales
are spending less while retail costs are rising. grew by just 2.6% on its index.
“The commercial pressures of higher labour This comes as shoppers continue to change
costs, business rates and relatively weak the way they buy, opting to shop more often
demand will continue to undercut profits and online. The BRC found that by the peak shopping
force the weakest companies to close stores months of November and December 2019, 34.2%
to enter administration,” he said. “The high of retail sales took place over the internet – 1.8
street and suburbs will continue to decline.” percentage points higher than at the same time
Some retailers opt for Company Voluntary in 2018. The BRC cites factors including CVAs,
Arrangements (CVAs) that allow them to trade shop closures and job losses over the course of
through their difficulties, renegotiating costs 2019. Political and economic uncertainty also
such as property rents and lease lengths. But played a role. In 2019, BRC chief executive, Helen
research from real estate company Colliers Dickinson, said, “Twice the UK faced the prospect
International shows that of 23 UK retailers that of a no deal Brexit as well as political instability
have gone through a CVA process since 2016, that concluded in a December general election.”
13 have later gone into administration. While This political instability is set to continue
CVAs aren’t helping every retailer that uses through 2020, as the UK waits to see what leaving
them, they may be having a wider effect on the the European Union will mean in practical terms
16 February 2020 © 2020 retailx.net, distributed by InternetRetailing.netSTRATEGIC OVERVIEW
both for retailers, who are used to managing
European supply chains, recruiting European staff
and selling cross-border into the EU free of tariffs
or customs – and for the customers who buy from
them. If UK shoppers feel they have less money
to spend, they are likely to cut back on what they
spend on retail.
Factors affecting UK retailing also include a
new level of environmental awareness among
consumers, especially younger generations,
and a move towards buying more sustainably.
That might mean buying fewer retail products,
or opting to buy items that have a lower carbon
footprint. Retailers certainly appear to be
responding to those concerns and are opting
to use less packaging and to replace plastics
with recyclable alternatives. The popularity of
Copyright © Matalan
replacements to single-use items, from bamboo
coffee cups to shopping bags, is growing.
Dickinson said, “Looking forward, the public’s
confidence in Britain’s trade negotiations will have
a big impact on spending over the coming year. Matalan chief executive, Jason Hargreaves, says it’s more important than ever to be
There are many ongoing challenges for retailers: agile in this current time of political uncertainty
to drive up productivity, continue to raise wages,
improve recyclability of products and cut waste.”
She noted it was essential that the government on their mobile websites, for example, while
make good on its promise to review, then reform, most (61%) offer next-day delivery and more
the broken business rates system which, she said, than half (52%) offer click and collect services.
“sees retail pay 25% of all business rates, while More than two-thirds (69%) show fulfilment
accounting for 5% of the economy.” options on their product pages, while 65% offer
autocomplete search suggestions for those
looking for a product on mobile. Almost all are
How retailers are responding using social media to some extent, with 97% on
The “challenging retail environment” has Facebook and 90% on Instagram.
become a common refrain for retailers reporting Individually, these incremental improvements
financial results both in 2019 and into 2020. might not seem significant. Taken together,
Yet they are working hard to adapt, as Jason they represent a steady shift towards building
Hargreaves, chief executive of Top150 value a highly capable retail sector empowered by
fashion retailer Matalan, said in January, when digital technologies to offer fast-improving
the business reported its latest, third-quarter, services to their customers. We can see a sector
figures. Hargreaves cited, “unprecedented moving on from a moment in which Elite and
levels of political uncertainty” that had hit Leading retailers moved much faster towards
overall sales and profits. But also, Matalan’s joined-up and seamless service. More recently,
online business had grown by a quarter. This retail performance is seen to be improving
was a time, he said, for retailers to adapt. “In more widely and across the board.
the ever-changing landscape retailers are Some of these improvements are smart and
now faced with, it’s more important than ever highly targeted, with traders moving back from
to evolve and be agile, efficient and deeply offering services that may not proved as popular
connected to our customers,” he stated. or profitable as hoped. Fewer now offer next-
His comments describe a pattern that is day collection, for example, while same-day and
visible in this year’s Top500 research. From nominated day and time delivery are also in decline.
graphics that illustrate the performance of the In the coming pages, we explore the six
Top500 over the years (see page 9), it’s clear that Dimensions that inform our Top500 listings,
performance has improved steadily over time to and we then go on to look in more detail at what
reach its best yet in 2020. It’s notable that this exactly retailers are doing to improve the way they
year, some services that were once considered operate. We see how they are improving delivery
cutting-edge are now used by most of those services (see page 37), as well as how they are
selling in this market. Almost all (94%) retailers investing in experiences that they hope will keep
now offer easier ‘hamburger’ style navigation their stores relevant (see page 39).
© 2020 retailx.net, distributed by InternetRetailing.net February 2020 17STRATEGY & INNOVATION
Thinking strategically
Retailers stand out in the Strategy & Innovation Dimension when they are early to
adopt significant new technologies and enable convenient shopper experiences
The Top500 crowd is starting to catch up with the
CONVENIENT DELIVERY, COLLECTION AND RETURNS
leaders. Across this year’s index, there’s evidence
that retailers are moving at speed to adopt best Most retailers now offer customers next-day delivery and the
practice approaches to multichannel selling. ability to collect online orders in-store. But RetailX research
Latest research for the Strategy & Innovation shows a row-back in the numbers currently offering more
Dimension shows retailers making it easier for sophisticated fulfilment services.
shoppers to buy via mobile, across channels and Delivery
via convenient delivery and collection services. In 2020, fast and convenient next-day delivery is offered by 61%
More are now providing a strong service as of Top500 retailers. But other potentially convenient delivery
standard. But it’s telling that the research also options remain cutting edge. A minority of traders offer Saturday
shows significant numbers stepping back from (26%), Sunday (11%) or nominated day (13%) delivery. Still fewer
super-fast and convenient collection services, and offer nominated time (5%), or same-day delivery – those that do
even from some delivery and returns services. stand out in the research as a result. The research also found
Perhaps that’s because those not offering the best that 55% of retailers show their fulfilment options on the landing
service in their sector have found it did not prove page in 2020, while 69% do so on the product page.
economic to compete in this way.
Collection
More than half of retailers (54%) now offer shoppers the ability
to collect in-store the items they ordered online. But same-day
RetailX research shows a row-back in the collection (6%) and collection in-store from the retailer’s own
numbers of retailers currently offering lockers (1%) both remain the preserve of leading retailers.
Retailers offer collection in an average of 94 hours (almost four
more sophisticated fulfilment services days) – and a median of 72, or three days.
Returns
By law, retailers must accept returns within 14 days of an online
RetailX researchers aim to understand in purchase. However, this year’s research suggests that how those
the Strategy & Innovation Dimension how returns can be made is becoming less flexible. In 2020, 43% of
Top500 retailers are serving their customers UK Top500 retailers enable traders to return an online order to the
and to recognise those that are using the latest store, down by five percentage points from 48% a year earlier.
technologies and retail services to provide The fastest category declines are among direct-selling brands,
multichannel convenience and the best customer where 42% offer the service, down by 8pp from 50% last year,
experience. They have analysed Top500 traders’ jewellery (-8pp to 48%), and trade and DIY equipment and tools
performances against more than 50 metrics (-8pp to 39%). The sectors where the service is most commonly
that they judge have the potential to improve offered include children’s toys and accessories (58%), fashion
service and set best practice standards. They clothing, accessories, footwear and groceries (all 52%), while it
consider approaches and technologies that are is least available among those selling consumer electronics and
already well-established as well as those that health (both 31%). This fall in the number of retailers offering
are emerging. Those metrics are taken from return to store is surprising to RetailX head of research, Martin
across Top500 research, assessing performance Shaw. “This service seems a key part of multichannel retail,”
in cutting-edge areas, from merchandising and he says, “but perhaps just not enough shoppers were using the
operations and logistics to brand engagement service, compared to the number opting to return by post, to
and mobile and cross-channel. make it worth maintaining the infrastructure.”
18 February 2020 © 2020 retailx.net, distributed by InternetRetailing.netEUROPE
STRATEGY
TOP500&REPORT
INNOVATION
2019
FIGURE 8. MORE MOBILE APPS HAVE PREDICTIVE SEARCH THIS YEAR
THE FRACTION OF TOP500 APPS WITH PREDICTIVE SEARCH HAS INCREASED IN EVERY SECTOR BY A MINIMUM OF FIVE PERCENTAGE
POINTS (PP)
Sports and outdoor equipment +5pp
Homeware +15pp
Children's toys and accessories +15pp
Footwear: Sports and leisure +8pp
Clothing: Sports and leisure +10pp
Cosmetics +17pp
Consumer electronics +13pp
Clothing: Fashion +17pp
Home and industrial appliances +8pp
Trade tools and equipment and DIY +10pp
Footwear: Fashion +16pp
Jewellery +23pp
Fashion accessories +16pp 2019
Direct-selling brands +15pp 2020 increase
0% 20% 40% 60% 80%
Below, we look in depth at retail performance
STOCK CHECKING AND RECOMMENDATIONS
across business-critical measures. Delivery,
collection and returns enable shoppers to take RetailX researchers track the extent to which Top500
ownership of and, if necessary, return their goods retailers help customers explore their range through stock
in the most convenient manner. How products checkers and product recommendations. They found that
are presented to smartphone users matters 75% of retailers recommend similar products, and 28%
because zoomable images and predictive search enable customers to check store stock. More than half (56%)
both enable customers to make purchase enable shoppers to add a product to a wishlist.
decisions with confidence. Checkouts that work,
CUSTOMER COMMUNICATION CHANNELS
stock checking and recommendations and a wide
variety of customer communication channels all Top500 retailers this year enable their customers to engage
go to improve customer service and the customer with them via ten different communication channels, from
experience, however they choose to engage. email and telephone to various social media platforms.
TABLE 2. LEADING RETAILERS IN THIS DIMENSION
AMAZON MARKS & SPENCER
CHECKOUT ARGOS NEXT
Offering the option of checking out through a third-party
ASOS OASIS
checkout provider can make it easier for shoppers who
don’t want to share their details – yet it is still a minority B&Q RIVER ISLAND
option. The most popular is PayPal, offered by 31% of BOOTS SAINSBURY'S
Top500 retailers, but Amazon Pay and Facebook checkout
DUNELM SCHUH
are each offered by 9% of them. Some 44% of retailers
show payment options on the landing page, while 23% H&M SCREWFIX
enable one-click ordering, which will require shoppers JD SPORTS TESCO
to have previously saved their payment details on the
retail website. JOHN LEWIS WICKES
© 2020 retailx.net, distributed by InternetRetailing.net February 2020 19You can also read
