Table of Contents
Executive Summary
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- Steady, though marginally slowing growth
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- Figure 1: Online sales as % all retailing, 2007-16
- Market size
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- Figure 2: Online sales by type of retailer, 2015
- Forecast
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- Figure 3: All online sales, 2011-21
- Product mix – Electricals the biggest product
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- Figure 4: Online sales by category, 2016 (est)
- Consumer outlook positive
- Companies and brands
- A strong year for pureplays
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- Figure 5: Distribution of the revenues of the leading 25 online retailers (as ranked in 2015) by type of retailer, 2013-15
- Share of total online spending
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- Figure 6: Share of all online retail sales for the leading online retailers, 2015
- Online advertising spend
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- Figure 7: UK online retail: Recorded above-the-line, online display and direct mail total advertising expenditure, 2012-15
- Brand research
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- Figure 8: Attitudes towards and usage of selected retailers, August 2015-June 2016
- The consumer
- Online shopping is now almost universal – for internet users
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- Figure 9: Devices used for online buying, May 2016
- Clothing is the most bought product online
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- Figure 10: Buyers of products online, by proportion of device owners, May 2016
- Amazon most used site
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- Figure 11: Retailers used, May 2014, May 2015, May 2016
- Little enthusiasm for personalisation
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- Figure 12: Attitudes to personalisation and social media, May 2016
- But people don’t want brands in their social space either
- 83% of people opt for the cheapest delivery option
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- Figure 13: Attitudes towards using click & collect services, May 2016
- Excellent service is essential for a successful online business
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- Figure 14: Other attitudes towards buying online, May 2016
- The perception that prices are lower online is still very strong
- There is evidence that people who shop online spend less
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- Figure 15: The online shopping journey, May 2016
- What we think
Issues and Insights
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- Are there limits to growth for the pure players?
- The facts
- The implications
- What should the pure players compete on?
- The facts
- The implications
- Online in the retail scene
- The facts
- The implications
- Online and social media
- The facts
- Implications
The Market – What You Need to Know
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- Steady, though marginally slowing growth
- Market size
- Product mix – Electricals the biggest product
- Consumer outlook positive
Market Size and Forecast
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- The source data
- Online share of all retailing
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- Figure 16: Online sales as % all retailing, 2007-16
- The peak month
- Total online sales and forecast
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- Figure 17: All online sales, 2011-21
- Figure 18: All online sales, 2011-21
Market Segmentation
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- Store based vs pure player
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- Figure 19: Store based and pure plyer share of all online sales, 2008-16
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- Figure 20: Online sales by type of retailer, 2015
- Pure players and all home shopping
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- Figure 21: Pure player share of all home shopping sales, 2008-15
- Figure 22: Online retail sales, (including VAT), 2011-15
- Pure players and store based retailers, sales and forecast
- Store based retailers
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- Figure 23: Store based retailers: Online sales, 2011-21
- Figure 24: Store based retailers: Online sales, 2011-21
- Pure players
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- Figure 25: Online pure players, sales, 2011-21
- Figure 26: Online pure players, sales, 2011-21
- Forecast methodology
- Market segmentation by product
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- Figure 27: Breakdown of online retail sales by major category (including. VAT), 2013-16 (est)
- Figure 28: Online sales by category, 2016 (est)
- Digital spending
- E-books
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- Figure 29: The book market, 2010-15
- Music and video
- Games
- Total market
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- Figure 30: Downloads and streaming, 2015
- Total online market
Market Drivers
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- Broadband access
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- Figure 31: Households with broadband access, 2011-15
- Devices used
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- Figure 32: Devices used to access the internet in the last three months, June 2014, April 2016
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- Figure 33: Device ownership, April 2014 and April 2016
- Consumer context
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- Figure 34: Consumer confidence, 2009-16
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- Figure 35: Inflation and earnings growth, 2011-16
Key Players – What You Need to Know
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- Innovation drives Amazon sales
- eBay losing market share
- A strong year for pureplays
- Online increasingly important to multichannel retailers
- Market shares change little
- Growth in payment options
- Expert assistance by video
- Online advertising spend increases 20.5%
- Amazon stands out for trust and differentiation
Leading Online Retailers
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- Amazon’s shifting strategy
- Tesco moves to a single website
- Next poor performance
- eBay
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- Figure 36: Leading online retailer’s net online revenues, 2013-15
- Pureplayers gain ground on multichannel retailers
- Reclassifying catalogue companies
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- Figure 37: Distribution of the revenues of the leading 25 online retailers (as ranked in 2015) by type of retailer, 2013-15
- Online is increasingly important to multichannel retailers
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- Figure 38: Top 25 online retailers: proportion of total sales transacted online for the multichannel retailers, 2013-15
Market Share
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- Small changes
- Amazon grabs share again
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- Figure 39: Top 25 online retailers: share of all online retail sales, 2013-15
Launch Activity and Innovation
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- Text for wine service
- More online payment options
- Online size comparison tool
- Smart shoppers rewarded with bigger discounts
- Video assistance while browsing
- Last-mile fulfilment
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- Figure 40: Samsung Family Hub refrigerator
- Championing home-grown local food producers
- Tinder-like app for a more customised fashion product offering
Social Media
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- Three-quarters are Facebook users
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- Figure 41: Usage of social and media networks in the last three months, 2013-16
- Brand interactions remain limited
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- Figure 42: Interactions with brands on social/media networks, March 2016
- Lack of trust inhibits direct interactions
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- Figure 43: Attitudes to brand interactions on social/media networks, March 2016
- Harnessing the power of ‘Influentials’
- Could app-convergence spell the end for websites?
- What they’re talking about
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- Figure 44: Number of mentions for selected leading clothing retailers, June 2015-May 2016
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- Figure 45: What they are saying online in relation to H&M, June 2015 to May 2016
- Figure 46: What they are saying online in relation to Primark, June 2015 to May 2016
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- Figure 47: What they are saying online in relation to M&S, June 2015 to May 2016
- Figure 48: What they are saying online in relation to Topshop/Topman, June 2015 to May 2016
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- Figure 49: What they are saying online in relation to ASOS, June 2015 to May 2016
- Up-and-coming social media networks
Advertising and Marketing Activity
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- Online retail advertising spend up 20.5% in 2015
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- Figure 50: UK online retail: Recorded above-the-line, online display and direct mail total advertising expenditure, 2012-15
- Amazon.co.uk is the biggest advertising spender
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- Figure 51: Recorded above-the-line, online display and direct mail total advertising expenditure by leading UK online retail operators, 2012-15
- 59.4% of total advertising spend channelled through TV
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- Figure 52: UK online retail: Recorded above-the-line, online display and direct mail total advertising expenditure, by media type, 2012-15
- Nielsen Media Research coverage
Brand Research
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- What you need to know
- Brand map
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- Figure 53: Attitudes towards and usage of selected retailers, August 2015-June 2016
- Key brand metrics
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- Figure 54: Key metrics for selected retailers, August 2015-June 2016
- Brand attitudes: Online pureplays lead on innovation and value
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- Figure 55: Attitudes, by retailer, August 2015-June 2016
- Brand personality: Littlewoods struggles with a tired image
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- Figure 56: Brand personality – Macro image, August 2015-June 2016
- Boohoo and ASOS trendsetting and cutting-edge
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- Figure 57: Brand personality – Micro image, August 2015-June 2016
- Brand analysis
- Amazon and eBay
- Online only retailers
- Multichannel fashion retailers
- Food retailers
- Multichannel GM retailers
Amazon.com
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- What we think
- Marketplace
- AWS
- Prime
- Food
- Where next?
- Company background
- Company performance
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- Figure 58: Amazon.com Inc: Group financial performance, 2010/11-2014/15
- Retail offering
AO World
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- What we think
- Dutch online store
- ao.de sales building momentum, but loss-making
- Web enhancements aimed at making shopping online for electricals simpler
- Partners with CollectPlus to widen delivery options
- Targeting the computer market
- Company background
- Company performance
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- Figure 59: AO World Plc: Group financial performance, 2011/12-2015/16
- Retail offering
Argos
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- What we think
- What the Sainsbury’s deal means for Argos
- Fast Track market-leading home delivery and store collection service
- Product availability
- Partnerships helping attract new customers
- Company background
- Company performance
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- Figure 60: Argos: Group financial performance, 2011/12-2015/16
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- Figure 61: Argos: Outlet data, 2011/12-2015/16
- Retail offering
ASOS
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- What we think
- Click-and-collect and next-day delivery options extended
- Investment in distribution to meet increased order demand
- Updated app driving m-commerce orders
- Rewarding loyal customers
- Customised shopping experience
- Engagement through increased social media activity
- A smart new way to shop ASOS
- Tailored product range with on-trend appeal
- Company background
- Company performance
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- Figure 62: ASOS: Group financial performance, 2011/12-2014/15
- Retail offering
Debenhams
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- What we think
- Local content and local currency payment options
- Improved website design
- Click-and-collect
- Driving incremental in-store sales
- New chief executive brings a wealth of online experience
- Acceleration in online sales via mobile
- Company background
- Company performance
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- Figure 63: Debenhams: Group financial performance, 2010/11-2014/15
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- Figure 64: Debenhams: Outlets, 2010/11-2014/15
- Retail offering
Dixons Carphone
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- What we think
- Using stores to support online
- Website consolidation less obvious
- Destination of choice for independent advice
- Company background
- Company performance
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- Figure 65: Dixons Carphone: Group financial performance, 2013/14-2015/16
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- Figure 66: Dixons Carphone: Outlet data, 2013/14-2015/16
- Retail offering
eBay
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- What we think
- Company background
- Company performance
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- Figure 67: eBay Inc.: Group financial performance, 2013-15
John Lewis
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- What we think
- Investing £500m in its online shopping service
- Store presence driving online sales
- Click-and-collect fee
- New app loaded with digital loyalty scheme
- Plans to roll out e-commerce website to more international markets
- Company background
- Company performance
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- Figure 68: John Lewis: Financial performance, 2011/12-2015/16
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- Figure 69: John Lewis: UK outlet data, 2011/12-2015/16
- Retail offering
Next Directory
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- What we think
- Extended delivery options
- Recent m-commerce enhancements boost sales conversion by mobile devices
- Retaining and recruiting new customers
- Overseas order fulfilment speeded up
- Company background
- Company performance
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- Figure 70: Next Group: Financial performance, 2011/12-2015/16
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- Figure 71: Next Group: Outlet data, 2011/12-2015/16
- Retail offering
Ocado Ltd
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- What we think
- Sales per customer
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- Figure 72: Sales per customer, 2011-15
- Waitrose
- Cash flow
- Where next
- Company background
- Company performance
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- Figure 73: Ocado Ltd: Group financial performance, 2010/11-2014/15
- Retail offering
Shop Direct Group
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- What we think
- Very
- Littlewoods
- Looking forward
- Company background
- Company performance
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- Figure 74: Shop Direct Group: Group financial performance, 2011/12-2014/15
- Retail offering
The Consumer – What You Need to Know
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- Online shopping is now almost universal – for internet users
- Clothing is the most bought product online
- Amazon most used site
- Little enthusiasm for personalisation
- But people don’t want brands in their social space either
- 83% of people opt for the cheapest delivery option.
- Excellent service is essential for a successful online business
- The perception that prices are lower online is still very strong
- There is evidence that people who shop online spend less
Shopping Online
Devices Used for Online Shopping
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- Figure 75: Devices used for online buying, May 2016
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- Figure 76: Profile of online buyers by device used and where it is used, May 2016
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What They Buy
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- Figure 77: Buyers of products online, by proportion of device owners, May 2016
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- Figure 78: Buyers of products online by device, by proportion of total sample, May 2016
- Who buys what
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- Figure 79: Age and socio-economic profile of product buyers, May 2016
- Numbers of products bought
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- Figure 80: Numbers of different products bought on a laptop or home computer, May 2016
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- Figure 81: Numbers of different products bought on a smartphone or tablet, May 2016
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Retailers Used
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- Figure 82: Retailers used, May 2014, May 2015, May 2016
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- Figure 83: Profile of online shoppers through any device, May 2016
- Number of shops used
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- Figure 84: Number of different retailers bought from in the last 12 months, May 2016
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Personalisation and Social Media
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- Figure 85: Attitudes to personalisation and social media, May 2016
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- Figure 86: Influence of social media by age, May 2016
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- Figure 87: Profile of those who agree with the personalisation and social media attitude statements, May 2016
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Click & Collect and Shopping Online
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- How important is click & collect?
- Cost vs convenience
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- Figure 88: Attitudes towards using click & collect services, May 2016
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- Figure 89: Profile of attitudes to Click & Collect, May 2016
- Multi-channel
- Services
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- Figure 90: Other attitudes to buying online, May 2016
Prices and Online
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- Price matching
- Profits
How People Shop Online
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- Passing trade
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- Figure 91: The online shopping journey, May 2016
- Credit
- Marketing
Appendix – Data Sources, Abbreviations and Supporting Information
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- Data sources
- Fan chart forecast
- VAT
- Financial definitions
- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Forecast Methodology
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