Table of Contents
Overview
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- What you need to know
- Products covered in this Report
Executive Summary
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- The market
- Spending on electricals soars in 2016
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- Figure 1: Consumer spending on all electrical products: market size and forecast (including VAT), 2011-21
- Specialists welcome positive growth, but lose market share
- Online accounts for over half of spending on electrical goods
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- Figure 2: Estimated online sales of electrical goods as a % of total consumer spending on electrical goods (Including VAT), 2012-16
- Prices beginning to edge up
- Companies and brands
- Amazon gains share…
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- Figure 3: Estimated market shares of the leading specialist and non-specialist retailers of electrical goods, 2016
- … and scores highly on trust
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- Figure 4: Attitudes towards and usage of selected brands, December 2016
- The consumer
- Three quarters of consumers purchased electricals in 2016
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- Figure 5: Types of electrical products purchased in the past 12 months, November 2016
- Argos remains most popular but Currys PC World is catching up fast
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- Figure 6: Retailers used to purchase electrical goods in the past 12 months, either in-store or online, November 2016
- Two in five purchased or used an aftersales product or service
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- Figure 7: Additional services/products purchased or taken out in the last 12 months, November 2016
- In-store demonstrations remain important, but consumers want more educational services
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- Figure 8: Attitudes to in-store demonstrations and technology services, November 2016
- Price convergence
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- Figure 9: Attitudes to retailers pricing of electrical products, November 2016
- Black Friday 2016 was the biggest yet, but what does this mean for 2017?
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- Figure 10: Black Friday 2016 purchasing, December 2016
- What we think
Issues and Insights
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- Does Dixons Carphone’s vision of a service driven future stack up?
- The facts
- The implications
- Price increases: what’s the impact and does it matter?
- The facts
- The implications
- Is same-day delivery taking away one of a stores’ last remaining USPs?
- The facts
- The implications
The Market – What You Need to Know
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- Spending on electricals soars in 2016
- Specialists welcome positive growth, but lose market share
- Online-only players gain from specialist market share loss
- Prices beginning to edge up
- Housing market a boost for the sector
Market Drivers
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- Retail sales
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- Figure 11: Annual % change in all retail sales, electrical household appliance specialists and computers & telecoms equipment specialists, non-seasonally adjusted value series, Jan 2015-Dec 2016
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- Figure 12: Annual % change in all retail sales, electrical household appliance specialists and computers & telecoms equipment specialists, non-seasonally adjusted volume series, Jan 2015-Dec 2016
- Average weekly sales: Q4 becoming increasingly important
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- Figure 13: Average weekly retail sales in the electrical household appliance specialists and computers and telecommunications specialists categories, Oct 2015-Dec 2016
- Prices edging up
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- Figure 14: Price inflation: annual rate of change in core electrical categories, by month, Jan-Dec 2016
- Figure 15: Price inflation: annual rate of change in core electrical categories, 2010-16
- Real incomes still growing, but is a squeeze coming?
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- Figure 16: Real wage growth: wages growth vs inflation, Jan 2012-Dec 2016
- Property transactions
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- Figure 17: Number of property residential property transactions with a value of over £40,000 completed in the UK, Jun 2015-Dec 2016
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- Figure 18: Number of property residential property transactions with a value of over £40,000 completed in the UK, 2006-16
- Renting falls
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- Figure 19: UK households by tenure, 2011-15
Market Size and Forecast
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- A very strong 2016 for spending
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- Figure 20: Consumer spending on all electrical products: market size and forecast (including VAT), 2011-21
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- Figure 21: Electrical products: market size and forecast (including VAT), in current and constant prices, 2011-21
- Segment forecasts
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- Figure 22: Core electrical goods segments as a percentage of the total market, 2013-16
- Household appliances
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- Figure 23: Household appliances: segment size and forecast (including VAT), 2011-21
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- Figure 24: Household appliances: segment size and forecast (including VAT), in current and constant prices, 2011-21
- Computing and telecoms
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- Figure 25: Computing and telecoms goods: segment size and forecast (including VAT), 2011-21
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- Figure 26: Computing and telecoms goods: segment size and forecast (including VAT), in current and constant prices, 2011-21
- Audio-visual and photographic goods
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- Figure 27: Audio-visual and photographic goods: segment size and forecasts (including VAT), 2011-21
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- Figure 28: Audio-visual and photographic goods: segment size and forecast (including VAT), in current and constant prices, 2011-21
- Personal care appliances
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- Figure 29: Personal care appliances: segment size and forecast (including VAT), 2011-21
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- Figure 30: Personal care appliances: segment size and forecast (including VAT), in current and constant prices, 2011-21
- Forecast methodology
Specialist Sector Size
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- Specialists lose share but 2016 was positive
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- Figure 31: Electrical goods specialists as a percentage of all consumer spending on electrical goods (including VAT), 2012-17
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- Figure 32: Electrical goods specialist sector sales (incl. and excluding VAT), 2012-17
- Smaller operators can find a niche with the smart home
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- Figure 33: Number of retail outlets, 2012-16
- Figure 34: Number of retail enterprises, 2012-16
Channels of Distribution
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- Specialists lose share, with pureplayers the big winners
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- Figure 35: Estimated distribution of spending on electrical goods, 2015 and 2016
The Consumer – What You Need to Know
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- Three quarters of consumers purchased electricals in 2016
- Online is the dominant method of purchasing electricals
- Ease of comparison and perceived cost savings driving online…
- …but seeing products physically is still a major bonus for stores
- Argos remains most popular but Currys PC World is catching up fast
- Two in five purchased or used an aftersales product or service
- Price convergence
- Black Friday 2016: biggest yet but what does this mean for 2017
What They Bought and What They Plan to Buy
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- Mobile phones continue to be the most popular purchase
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- Figure 36: Types of electrical products purchased in the past 12 months, November 2016
- Trend data
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- Figure 37: Trend data: types of electrical products purchased in the past 12 months, November 2013-16
- Almost half of 16-24-year-olds purchased a mobile phone in the past year
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- Figure 38: Types of electrical products purchased in the past 12 months, by age, November 2016
- Positive housing market driving appliance sales
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- Figure 39: Purchase of household appliances, by time spent in current home, November 2016
- Repertoire of products purchased in the past year
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- Figure 40: Repertoire of products purchased in the past 12 months, November 2016
- Over half of consumers plan to buy electrical goods in the next year
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- Figure 41: Planned purchase of electrical goods in the next 12 months, November 2016
How They Shop for Electricals
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- Online most used for electrical purchases
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- Figure 42: How electrical goods were purchased in the last 12 months, November 2016
- 25-44s are the main online buyers
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- Figure 43: How electrical goods were purchased in the last 12 months, November 2016
- Desktops/laptops the device of choice
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- Figure 44: Devices used to purchase electrical goods in the past year, November 2016
- Young men the most likely to buy on their phone
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- Figure 45: Devices used to purchase electrical goods in the past year, November 2016
Why They Prefer to Shop Online or In-Store for Electricals
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- Price and ease of comparison drives shoppers online
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- Figure 46: Why they prefer to shop online for electrical goods, November 2016
- Greater emphasis on price-matching online competition
- Physical inspection still key for stores
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- Figure 47: Why they prefer to shop in-store for electricals, November 2016
Retailers Used
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- Argos comes out on top
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- Figure 48: Retailers used to purchase electrical goods in the past 12 months, either in-store or online, November 2016
- Currys PC World’s strength is its stores, but is catching up online
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- Figure 49: Retailers used to buy in-store or online, November 2016
- Amazon and Argos’s broad appeal key to success
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- Figure 50: Retailers used for electrical goods purchasing in the past 12 months, by socio-economic group and age, November 2016
- Whilst Currys is growing online, more needs to be done to appeal to online shoppers
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- Figure 51: Retailer used to purchase electrical goods in the past 12 months, by how electrical goods have been purchased in the last 12 months, November 2016
- Online users show a wider repertoire of stores used
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- Figure 52: Repertoire of retailers used to purchase goods in the last 12 months, by in-store and online, November 2016
Attitudes towards and Usage of Aftersales Services/Products and In-store Demonstrations
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- Retailers ramp up service offerings
- Two in five have purchased or used an aftersales product or service
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- Figure 53: Additional services/products purchased or taken out in the last 12 months, November 2016
- Higher-cost items seeing greater uptake of add-ons
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- Figure 54: Additional services/products purchased or taken out in the last 12 months, by electrical products purchased in the last 12 months, November 2016
- Specialists strong on add-ons
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- Figure 55: Additional services/products purchased or taken out in the last 12 months, by type of retailer used to purchase electrical goods in the last 12 months, November 2016
- But are consumers ready for it?
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- Figure 56: Attitudes to in-store demonstrations and technology services, November 2016
Attitudes to Pricing and New Brands
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- Frequent discount could be hitting price integrity
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- Figure 57: Attitudes to retailers pricing of electrical products, November 2016
- Younger consumers more likely to be tempted by offers
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- Figure 58: Agreement to statements relating to electrical retailers pricing, November 2016
- Newer brands recognised for their value but concerns around reliability remain
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- Figure 59: Attitudes to new brands from emerging economies, November 2016
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- Figure 60: Agreement to statements relating to new brands from emerging economies, November 2016
Black Friday 2016
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- Figure 61: Black Friday 2016: purchasing and browsing behaviour, December 2016
- Electrical purchasing
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- Figure 62: Black Friday 2016 purchasing, December 2016
- Growth in Black Friday electrical purchases
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- Figure 63: Purchase of electrical goods during Black Friday, by channel of purchase, December 2015 and 2016
- Even split between gift and personal buying
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- Figure 64: Reasons for purchasing items during Black Friday 2016, by purchase, December 2016
- Most shop around on Black Friday
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- Figure 65: Reasons for buying and behaviour during Black Friday 2016, December 2016
- Electrical buyers more likely to seek out the best deals
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- Figure 66: Agreement to statements around reasons for buying on and behaviour during Black Friday 2016, by type of purchase made, December 2016
- Most browsed but did not buy because nothing caught their eye
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- Figure 67: Reasons for browsing but not buying during Black Friday 2016, December 2016
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Leading Retailers – What You Need to Know
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- Electrical spending increasingly moves online
- Amazon gains share once more
- ao.com continues to be the fastest growing specialist player
- Dixons Carphone looks to consolidate its stores
- Amazon scores highly on trust
Leading Specialists
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- Store consolidation slows Dixons Carphone’s total growth
- Apple reopens flagship store
- ao.com’s market leading growth
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- Figure 68: Leading specialists retailers of electrical goods: total net revenues, 2011-15
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- Figure 69: The leading specialist retailers, CAGR of net revenues, 2011-15
- Outlets and sales per outlet
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- Figure 70: The leading retailers of electrical goods, outlet numbers, 2011-15
- Figure 71: Leading specialist retailers of electrical goods, annual sales per outlet, 2011-15
- Operating profits and margins
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- Figure 72: Leading specialist retailers of electrical goods, operating profits, 2011-15
- Figure 73: Leading specialist retailers of electrical goods, operating margins, 2011-15
- Sales area and sales densities
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- Figure 74: Leading specialist retailers of electrical goods, estimated sales area, 2011-15
- Figure 75: Leading specialist retailers of electrical goods, sales per square metre, 2011-15
Leading Non-Specialists
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- Amazon continues to lead the pack
- Sainsbury’s takes on Argos
- John Lewis targets smart-home future
- Shop Direct maintains steady growth
- Grocers fall behind
- Lack of launches hits hardware sales at Game Digital
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- Figure 76: Leading non-specialist retailers’ sales of electronic goods (excluding VAT), 2012-16
- Figure 77: The leading non-specialist retailers: CAGR in electrical goods sales, 2012-16
- Tesco’s shrinks non-convenience store estate
- John Lewis continues to expand
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- Figure 78: Leading non-specialist retailers of electrical goods, outlet numbers, 2012-16
Market Shares
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- Figure 79: Estimated market shares of the leading specialist and non-specialist retailers of electrical goods, 2016
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- Figure 80: Estimated market shares of the leading specialist and non-specialist retailers of electrical goods, 2014-16
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Mobile Phone Specialists
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- The market
- Mobile network connections
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- Figure 81: Estimated value of retail mobile network connections in the UK, 2011-16
- Figure 82: Retail mobile subscription shares by provider, Q4 2015
- Network providers - Retail key metrics
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- Figure 83: Estimated Store numbers of the big four network providers, 2016
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- Figure 84: Leading network providers: Financials, 2013-15
- Carphone Warehouse
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- Figure 85: Carphone Warehouse: Key metrics, 2014-17
Online
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- Online now the preferred option for buying electricals
- Black Friday boosts online sales
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- Figure 86: Estimated online sales of electrical goods (including VAT), 2012-16
- Figure 87: Leading online retailers’ estimated shares of online spending on electrical goods, 2016 (est)
Space Allocation Summary
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- Figure 88: Leading electricals retailers, summary space allocation estimates, January 2017
- Detailed space allocation
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- Figure 89: Leading electricals retailers, detailed space allocation estimates, January 2017
- Figure 90: Leading electricals retailers, detailed space allocation estimates, January 2017 (continued)
- Electrical departments in supermarkets
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- Figure 91: Supermarkets: Electricals department as a percentage of total floor space, January 2017
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Retail Product Mix
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- Space allocation
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- Figure 92: UK electricals retailers, space allocation, 2016
- Figure 93: Leading electricals retailers, electricals space, 2015/16
- Sales density
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- Figure 94: Leading electricals retailers, estimated sales densities by broad product area, 2015/16
- Sales by broad product category
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- Figure 95: Leading electricals retailers, estimated sales by broad product area, 2015/16
- Market shares
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- Figure 96: Leading electricals retailers, estimated market share by broad product area, 2015/16
Innovations and Launch Activity
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- Smart apartments in-store and one-stop connected home solutions
- Experience stores
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- Figure 97: Dyson’s first UK flagship store in London, July 2016
- AO widens order fulfilment options
- Flexible store format
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- Figure 98: Carphone Warehouse flexible store format
Advertising and Marketing Activity
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- Total advertising spend up 2% year-on-year in 2016
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- Figure 99: Recorded above-the-line, online display and direct mail total advertising expenditure by UK electrical retailers, 2012-16
- Dixons once again by far the sector’s biggest advertising spender
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- Figure 100: Leading UK retail advertisers of electrical products: recorded above-the-line, online display and direct mail total advertising expenditure, 2012-16
- 56.3% of total advertising spend in 2016 was channelled through TV
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- Figure 101: Leading and total UK retail advertisers of electrical products: recorded above-the-line, online display and direct mail total advertising expenditure, by media type, 2016
- Nielsen Ad Intel coverage
Brand Research
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- What you need to know
- Brand map
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- Figure 102: Attitudes towards and usage of selected brands, December 2016
- Key brand metrics
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- Figure 103: Key metrics for selected brands, December 2016
- Brand attitudes: John Lewis and Apple Stores worth paying more for
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- Figure 104: Attitudes, by brand, December 2016
- Brand personality: Online pureplays the most vibrant and engaging brands
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- Figure 105: Brand personality – Macro image, December 2016
- Currys PC World struggles to shake its negative associations
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- Figure 106: Brand personality – Micro image, December 2016
- Brand analysis
- Amazon leads the way despite falling usage
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- Figure 107: User profile of Amazon, December 2016
- John Lewis’s premium image is worth paying more for
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- Figure 108: User profile of John Lewis, December 2016
- Apple Stores popular with the affluent young
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- Figure 109: User profile of Apple Store, December 2016
- ao.com continues to grow its appeal
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- Figure 110: User profile of ao.com, December 2016
- Argos appeals on price
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- Figure 111: User profile of Argos, December 2016
- Currys PC World struggles to stand out
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- Figure 112: User profile of Currys PC World, December 2016
- Carphone Warehouse elicits low levels of trust
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- Figure 113: User profile of Carphone Warehouse, December 2016
Amazon.com
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- What we think
- Marketplace is growing
- Disruptive influence
- Does Amazon need stores?
- Maturity beckoning?
- Where next?
- Company background
- Company performance
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- Figure 114: Amazon.com Inc.: Group financial performance, 2011/12-2015/16
- Electricals sales
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- Figure 115: Amazon: estimated electricals sales in Europe, 2015-16
- Marketplace
- Retail offering
AO World
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- What we think
- Broader variety of electrical products
- Enhanced online customer experience
- Increased brand awareness attracting new customers and driving repeat business
- Bolstering logistical infrastructure to better serve customers
- European operation to enter profitability in 2020
- Company background
- Company performance
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- Figure 116: AO World Plc: group financial performance, 2011/12-2015/16
- Retail offering
Apple Retail
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- What we think
- Over-reliance on the iPhone?
- A price rise too far?
- All about the image
- Company background
- Company performance
- Worldwide
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- Figure 117: Apple Inc.: sales and operating profit, 2012-16
- Apple Retail UK
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- Figure 118: Apple Retail UK: group financial performance, 2011/12-2015/16
- Figure 119: Apple Retail UK: outlet data, 2011/12-2015/16
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- Figure 120: Apple Retail: European stores, 2014-17
- Retail offering
Argos
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- What we think
- Early days, but the signs are promising
- Real-time delivery information and convenient product drop-off option for busy festive period
- ‘Buy now’ price promise bolsters extended Black Friday promotion
- Company background
- Company performance
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- Figure 121: Argos: group financial performance, 2011/12-2015/16
- Figure 122: Argos: outlet data, 2011/12-2015/16
- Retail offering
Dixons Carphone
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- What we think
- Betting the house on connectivity
- Company plans to ‘redefine retail’ with pay-monthly membership scheme
- Cutting price out of the equation
- What next?
- Company background
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- Figure 123: Dixons Carphone: retail brands, by country, 2017
- Company performance
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- Figure 124: Dixons Carphone: group financial performance, 2013/14-2015/16
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- Figure 125: Dixons Carphone: outlet data, 2013/14-2015/16
- Figure 126: Dixons Carphone: store portfolio, 2015-16
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- Figure 127: Dixons Carphone: planned store closures, 2016/17
- Retail offering
E-Square
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- What it does
- Company background
- Key figures
- Members
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- Figure 128: E-Square membership, 2016
- Sales
Euronics International
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- What we think
- Bringing its members new and innovative products
- Brand communication
- Bolstering multi-channel proposition
- Services add value to physical stores
- Company background
- Company performance
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- Figure 129: Euronics International: group sales performance, 2011-15
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- Figure 130: Euronics International: estimated outlet data, 2011-15
- Retail offering
Maplin Electronics
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- What we think
- Strengthening multichannel proposition with new returns solution
- Price reductions to bolster value-for-money positioning
- New store format filled with new shopping experiences
- Company background
- Company performance
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- Figure 131: Maplin Electronics Ltd: group financial performance, 2011-2015/16
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- Figure 132: Maplin Electronics Ltd: outlet data, 2011-2015/16
- Retail offering
Appendix – Data Sources, Abbreviations and Supporting Information
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- Data sources
- Financial definitions
- Sales per store, sales per square metre
- Exchange rates
- Abbreviations
- Consumer research methodology
- Brand research
- Brand map
Appendix – Market Size and Forecast
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- Forecast methodology
- Mintel market size definitions
- Specialist sector size
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