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
- Real incomes feeling the squeeze
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- Figure 1: Real wage growth: wages growth vs inflation, January 2014-December 2017
- Spending on electricals accelerates in 2017
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- Figure 2: Consumer spending on all electrical products: market size and forecast (including VAT), 2012-22
- Specialists continue to lose share
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- Figure 3: Electrical goods specialists as a % of all consumer spending on electrical goods (incl. VAT), 2012-18
- Companies and brands
- Dixons Carphone still the dominant player, but share is slipping
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- Figure 4: Estimated market shares of the leading specialist and non-specialist retailers of electrical goods, 2017
- Half of spending now comes through online
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- Figure 5: Estimated online sales of electrical goods (including VAT), as a % of total consumer spending on electrical goods, 2013-17
- The Amazon brand is outperforming rivals
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- Figure 6: Attitudes towards and usage of selected brands, January 2018
- The consumer
- Mobile phones the most popular purchase
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- Figure 7: Types of electrical products purchased in the past 12 months, November 2017
- More consumers buy online than in-store
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- Figure 8: How consumers browsed for and purchased electrical goods in the past year, November 2017
- Amazon the most popular destination to purchase electricals
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- Figure 9: Retailers used to purchase electrical goods in the past 12 months, by in-store and online, November 2017
- Levels of discounting online are high…
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- Figure 10: Full price vs discount purchases, by in-store/online, November 2017
- …which threatens to undermine full-price integrity
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- Figure 11: Attitudes towards trust in electrical retailers’ pricing, November 2017
- Advice crucial to the electricals purchase journey
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- Figure 12: What consumers would do if buying high- and low-value electricals, November 2017
- Could falling real income bring about more ‘fix-it-up’ behaviours?
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- Figure 13: Attitudes towards buying new electrical goods, November 2017
- Electricals the most purchased products on Black Friday 2017
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- Figure 14: Items purchased during Black Friday 2017, December 2017
- What we think
Issues and Insights
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- Discounting: friend or foe?
- The facts
- The implications
- How can retailers continue to grow if discretionary spending falls?
- The facts
- The implications
- How can specialists best utilise their expertise in a digital world?
- The facts
- The implications
The Market – What You Need to Know
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- Real incomes fall in 2017
- Housing market flat year on year
- Spending on electricals accelerates in 2017
- Specialists struggle to keep pace
Market Drivers
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- Retail sales hold up relatively well in 2017
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- Figure 15: Annual % change in all retail sales, electrical household appliance specialists and computers & telecoms equipment specialists, non-seasonally adjusted value series, January 2016-December 2017
- Figure 16: Annual % change in all retail sales, electrical household appliance specialists and computers & telecoms equipment specialists, non-seasonally adjusted volume series, January 2016-December 2017
- Average weekly sales peak in Q4
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- Figure 17: Average weekly retail sales in the electrical household appliance specialists and computers and telecommunications specialists categories, October 2016-December 2017
- Prices more volatile over the year
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- Figure 18: Price inflation: annual rate of change in core electrical categories, by month, 2017
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- Figure 19: Price inflation: annual rate of change in core electrical categories, 2011-17
- Real income squeeze
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- Figure 20: Real wage growth: wages growth vs inflation, January 2014-December 2017
- Credit use hits recent peak
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- Figure 21: Value of total unsecured lending (excluding loans from the Student Loans Company), 2008-17
- Property transactions flat in 2017
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- Figure 22: Number of property residential transactions with a value of over £40,000 completed in the UK, June 2016-November 2017
- Figure 23: Number of property residential transactions with a value of over £40,000 completed in the UK, 2006-17
- Renting rises
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- Figure 24: UK households, by tenure, 2011-16
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- Figure 25: Percentage of 20-34-year-olds living with their parents, by gender, 1996-2017
Market Size and Forecast
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- Spending gathers pace in 2017 helped by inflation
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- Figure 26: Consumer spending on all electrical products: market size and forecast (including VAT), 2012-22
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- Figure 27: Consumer spending on all electrical products: market size and forecast (including VAT, in current and constant prices, 2012-22
- Segment forecasts
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- Figure 28: Core electrical goods segments as a percentage of the total market, 2014-17
- Household appliances
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- Figure 29: Household appliances: segment size and forecast (including VAT), 2012-22
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- Figure 30: Household appliances: segment size and forecast (including VAT), in current and constant prices, 2012-22
- Computing and telecoms
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- Figure 31: Computing and telecoms goods: segment size and forecast (including VAT), 2012-22
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- Figure 32: Computing and telecoms goods: segment size and forecast (including VAT), in current and constant prices, 2012-22
- Audio-visual and photographic goods
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- Figure 33: Audio-visual and photographic goods: segment size and forecasts (including VAT), 2012-22
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- Figure 34: Audio-visual and photographic goods: segment size and forecast (including VAT), in current and constant prices, 2012-22
- Personal care appliances
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- Figure 35: Personal care appliances: segment size and forecast (including VAT), 2012-22
- Figure 36: Personal care appliances: segment size and forecast (including VAT), in current and constant prices, 2012-22
- Forecast methodology
Specialist Sector Size
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- Specialists continue to lose share
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- Figure 37: Electrical goods specialists as a % of all consumer spending on electrical goods (incl. VAT), 2012-18
- Figure 38: Electrical goods specialist sector sales (incl. and excluding VAT), 2013-18
- Falling number of specialists underlines the challenges faced by the sector
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- Figure 39: Electrical specialists enterprise numbers, 2008-16
- Figure 40: Number of retail outlets, 2012-17
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- Figure 41: Average number of employees in the electrical specialist sector, 2008-16
Channels of Distribution
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- Online-only retailers continue to be the big winners
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- Figure 42: Estimated distribution of spending on electrical goods (excluding VAT), 2016 and 2017
The Consumer – What You Need to Know
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- Mobile phones the most popular electrical purchase
- More consumers buy online than in-store
- Amazon dominant in the electricals market
- Frequent discounts have the potential to undermine full-price integrity
- Advice crucial to the electrical buying process
- Consumers may look to repair rather than buy if market pressures continue
- Black Friday continues to grow, and electricals are a driver
What They Bought and What They Plan to Buy
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- Mobile phones remain most popular item purchased
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- Figure 43: Types of electrical products purchased in the past 12 months, November 2017
- Trend data: Rise in mobile phones and a fall in tablets
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- Figure 44: Types of electrical products purchased in the past 12 months, 2015-17
- Repertoire of products purchased in the last year
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- Figure 45: Repertoire of products purchased in the past 12 months, November 2017
- Nearly two thirds of consumers plan to buy an electrical product
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- Figure 46: Planned purchase of electrical goods in the next 12 months, November 2017
- Planned purchases repertoire
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- Figure 47: Repertoire of planned purchase of electrical goods in the next 12 months, November 2017
How They Browsed and Bought
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- Online crucial for the electricals sector
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- Figure 48: How consumers browsed for and purchased electrical goods in the past year, November 2017
- Smartphone purchasing growing strongly
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- Figure 49: How consumers purchased electrical goods, November 2016 and November 2017
- Younger consumers more likely to buy online and via a smartphone
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- Figure 50: How consumers purchased electrical goods, by age, November 2017
- Personal care appliances and small appliances over-index in-store
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- Figure 51: How consumers purchased electrical goods, by products purchased in the past 12 months, November 2017
Retailers Used
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- Amazon the most popular retailer overall…
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- Figure 52: Retailers used to purchased electrical goods in the past 12 months, November 2017
- The leading players have mass-market appeal
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- Figure 53: Retailers used to purchase electrical goods in the past 12 months, by age and socio-economic group, November 2017
- Amazon dominants online
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- Figure 54: Retailers used to purchased electrical goods in the past 12 months, by in-store and online, November 2017
- Online vs in-store demographic split
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- Figure 55: Retailers used to purchase electrical goods in the past 12 months, by in-store and online, by age, November 2017
- The majority stick to a single retailer
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- Figure 56: Repertoire of electrical retailers shopped with in the past 12 months, in-store and online, November 2017
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- Figure 57: Repertoire of electrical retailers shopped with in-store the past 12 months, by retailer shopped with in-store, November 2017
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- Figure 58: Repertoire of electrical retailers shopped with in the past 12 months, in-store and online, November 2017
Discounting in Electricals
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- Just over half paid full price
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- Figure 59: Full price vs discount purchases, November 2017
- High levels of promotional activity are causing consumers to question pricing
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- Figure 60: Attitudes towards trust in electrical retailers’ pricing, November 2017
- Online shows a higher level of purchasing at discounted prices
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- Figure 61: Full price vs discount purchases, by in-store/online, November 2017
- Level of discount purchasing by retailer
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- Figure 62: Full price vs discount purchases, by retailers used to purchase electrical goods, November 2017
Purchase Journey for High- and Low-value Electricals
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- Consumers more likely to do research for high-value purchases
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- Figure 63: What consumers would do if buying high- and low-value electricals, November 2017
- Younger consumers value advice, whilst older consumers want to see products first
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- Figure 64: What consumers would do if buying high-value electricals, by age, November 2017
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- Figure 65: What consumers would do if buying low-value electricals, by age, November 2017
- Older consumers likely to have a more thorough buying process
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- Figure 66: Repertoire of actions taken before purchasing high/low-value electrical items, November 2017
Attitudes towards Purchasing New Technology
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- Falling real incomes may see the return of ‘fix-it-up’ behaviours
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- Figure 67: Attitudes towards buying new electrical goods, November 2017
- 25-34s more likely to desire new tech irrespective of price
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- Figure 68: Agreement with attitudes towards buying new electrical goods, by age, November 2017
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- Figure 69: Agreement with attitudes towards buying new electrical goods, by socio-economic group, November 2017
- Potential video games consoles and camera buyers more susceptible to changes in finances
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- Figure 70: Agreement with attitudes towards buying new electrical goods, by products likely to be purchased in the next year, November 2017
Black Friday 2017
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- Over half engaged with Black Friday
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- Figure 71: Participation in Black Friday 2017, December 2017
- Electricals are the most purchased items
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- Figure 72: Items purchased during Black Friday 2017, December 2017
- Average spending tops £200 on Black Friday
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- Figure 73: Average spending during Black Friday 2017, December 2017
- Retailers used
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- Figure 74: Retailers shopped with during Black Friday 2017, December 2017
- Black Friday displaces demand
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- Figure 75: Black Friday 2017 behaviours, December 2017
Leading Retailers – What You Need to Know
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- Online specialists growing quickest
- Amazon continues to soar
- Dixons Carphone remains the dominant player
- Over half of spending comes through online
- AR has potential to cause further headaches for stores
- Amazon’s brand is strong
Leading Specialists
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- Market leader Dixons Carphone continues to grow
- AO.com sales on the up
- Appliances Direct is the fastest growing specialists
- BrightHouse sales fall
- Maplin profits almost halve over the year
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- Figure 76: Leading specialist retailers of electrical goods: total net revenues, 2013/14- 2017/18
- Figure 77: Leading specialist retailers, CAGR of net revenues, 2013/14-2016/17
- Outlets and sales per outlet
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- Figure 78: Leading retailers of electrical goods, outlet numbers, 2013/14-17/18
- Figure 79: Leading specialist retailers of electrical goods, annual sales per outlet, 2012/13-16/17
- Operating profits and margins
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- Figure 80: Leading specialist retailers of electrical goods, operating profits, 2013/14-2016/17
- Figure 81: Leading specialist retailers of electrical goods, operating margins, 2013/14-2016/17
- Sales area and sales densities
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- Figure 82: Leading specialist retailers of electrical goods, estimated sales area, 2012-16
- Figure 83: Leading specialist retailers of electrical goods, sales per square metre, 2012-16
Leading Non-Specialists
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- Amazon maintains its lead
- GAME sales continues to fall, but upturn in sight
- Sainsbury’s/Argos sales edge up
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- Figure 84: Leading non-specialist retailers’ estimated sales of electronic goods (excluding VAT), 2013-17
- Figure 85: Leading non-specialist retailers, CAGR in electrical goods sales, 2013-17
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- Figure 86: Estimated Amazon and eBay total GTV/GMV electrical sales, 2015-17
- GAME cuts store numbers in poor year
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- Figure 87: Leading non-specialist retailers of electrical goods, outlet numbers, 2013-17
Market Shares
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- Dixons Carphone still the dominant player, but share is slipping
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- Figure 88: Estimated market shares of the leading specialist and non-specialist retailers of electrical goods, 2017
- Figure 89: Estimated market shares of the leading specialist and non-specialist retailers of electrical goods, 2015-17
Mobile Phone Specialists
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- The market
- Mobile network connections
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- Figure 90: Value of retail mobile network connections in the UK, 2012-17
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- Figure 91: Average monthly revenue per subscription, by contract type, 2011-16
- EE the single largest network
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- Figure 92: Network usage, October 2017
- Network providers – Key retail metrics
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- Figure 93: Estimated store numbers of the big four network providers, 2017
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- Figure 94: Leading network providers: Financials, 2013-16
- Carphone Warehouse
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- Figure 95: Carphone Warehouse: Key metrics, 2014-18
Online
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- Online accounts for over 50% of spending
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- Figure 96: Estimated online sales of electrical goods (including VAT), 2013-17
- The reach of online is far more than the final purchase
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- Figure 97: Why they prefer to shop online for electrical goods, November 2016
- Amazon the dominant player online
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- Figure 98: Leading online retailers’ estimated shares of online spending on electrical goods, 2017
Space Allocation Summary
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- Figure 99: Leading electricals retailers, summary space allocation estimates, January 2018
- Detailed space allocation
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- Figure 100: Leading electricals retailers, detailed space allocation estimates, January 2018
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- Figure 101: Leading electricals retailers, detailed space allocation estimates, January 2018
- Electrical departments in supermarkets
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- Figure 102: Supermarkets: Estimated electricals space as a percentage of total floor space, January 2018
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Retail Product Mix
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- Space allocation
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- Figure 103: UK electricals retailers, space allocation, 2017
- Figure 104: Leading electricals retailers, electricals space, 2016/17
- Sales density
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- Figure 105: Leading electricals retailers, estimated sales densities by broad product area, 2016/17
- Sales by broad product category
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- Figure 106: Leading electricals retailers, estimated sales by broad product area, 2016/17
- Market shares
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- Figure 107: Leading electricals retailers, estimated market share by broad product area, 2016/17
Innovation and Launch Activity
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- John Lewis to raise Quiet Mark awareness on shop store windows
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- Figure 108: Kettle with Quiet Mark tag
- Amazon adds augmented reality to its mobile app and teams up with BMW
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- Figure 109: Amazon AR view
- Dixons Travel expands with two new innovative stores
- Sainsbury’s teams up with EE in store expansion
- GAME expands concessions into Maplin and WH Smith
- Maplin teams up with repair specialist iSmash
- Carphone Warehouse teams up with Goji and Nails Inc
- Beats and drams available in new London store
- Sonos opens concept store in London and teams up with IKEA
- Hughes Electrical invests in demonstration kitchen
- Roberts introduces new turntable amid vinyl revival
- Smeg launches in Harrods and collaborates with Dolce & Gabbana
Advertising and Marketing Activity
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- Advertising expenditure falls 5% year on year in 2017
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- Figure 110: Recorded above-the-line, online display and direct mail total advertising expenditure by UK electrical retailers, 2013-17
- Dixons continues to hold the crown of advertising expenditure, but is cutting back
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- Figure 111: Leading UK retail advertisers of electrical products: recorded above-the-line, online display and direct mail total advertising expenditure, 2013-17
- Television advertising remains strong
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- Figure 112: Total UK retail advertising: recorded above-the-line, online display and direct mail total advertising expenditure, by media type, 2013-17
- Campaign highlights
- Dixons Carphone partners with ultramarathon event Race to the Stones
- Argos’ Mew-Tube
- Currys PC World Christmas ad focuses on employees
- Advertising by media type
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- Figure 113: Leading and total UK retail advertisers of electrical products: recorded above-the-line, online display and direct mail total advertising expenditure, by media type, 2017
- Nielsen Ad Intel coverage
Brand Research
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- What you need to know
- Brand map
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- Figure 114: Attitudes towards and usage of selected brands, January 2018
- Key brand metrics
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- Figure 115: Key metrics for selected brands, January 2018
- Brand attitudes: Amazon and AO.com leading online
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- Figure 116: Attitudes, by brand, January 2018
- Brand personality: Amazon, AO.com and Argos have the fun factor
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- Figure 117: Brand personality – Macro image, January 2018
- John Lewis has the stylish edge
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- Figure 118: Brand personality – Micro image, January 2018
- Brand analysis
- Amazon: mass-market appeal that most would recommend
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- Figure 119: User profile of Amazon, January 2018
- AO.com: those who use the brand are impressed
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- Figure 120: User profile of AO.com, January 2018
- Apple Store: style with some substance
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- Figure 121: User profile of Apple Store, January 2018
- Argos: strong awareness but experience could be improved
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- Figure 122: User profile of Argos, January 2018
- John Lewis: Exclusive whilst remaining accessible
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- Figure 123: User profile of John Lewis, January 2018
- Currys PC World: strong awareness but experience is lacking
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- Figure 124: User profile of Currys PC World, January 2018
- Carphone Warehouse: Issues with trust
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- Figure 125: User profile of Carphone Warehouse, January 2018
Amazon.com Inc
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- What we think
- Where next?
- Geographical expansion
- Prime
- Marketplace
- AWS
- Profitability
- Where next?
- Company background
- Company performance
- Published sales and total sales volumes
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- Figure 126: Amazon: sales breakdown, by source of income, 2015-17
- Figure 127: Amazon: sales breakdown, by source of income, 2017
- Gross transaction revenue (GTV)
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- Figure 128: Amazon: estimated group gross transaction revenue, 2015-17
- GTV by country
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- Figure 129: Amazon.com Inc: group financial performance, 2013-17
- Sales of electricals
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- Figure 130: Amazon Europe: estimated sales of electrical goods, 2015-17
- Retail offering
AO World Plc
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- What we think
- Mobile shopping launched across all territories
- Building brand awareness
- Enhanced customer proposition in Europe
- Reaching out to new customers via marketplaces
- Logistics investment to meet increased demand
- Bolstering commitment to the environment
- Company background
- Company performance
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- Figure 131: AO World Plc: group financial performance, 2012/13-2016/17
- Retail offering
Apple Retail UK
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- What we think
- The human face of Apple Inc.
- Stores becoming larger and more informal…
- …as well as more experiential
- Where next?
- Company background
- Company performance
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- Figure 132: Apple Retail UK: group financial performance, 2012/13-2016/17
- Figure 133: Apple Retail UK: outlet data, 2012/13-2016/17
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- Figure 134: Apple Retail: European stores, 2014-18
- Retail offering
Argos
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- What we think
- Convenience store pick-up
- Increasing Fast Track delivery capability
- Catalogue could be scrapped for good as more customers shop online
- Bigger and more varied product choice
- Record Black Friday sales
- Company background
- Company performance
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- Figure 135: Argos: group financial performance, 2012/13-2016/17
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- Figure 136: Argos: outlet data, 2012/13-2016/17
- Retail offering
Dixons Carphone
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- What we think
- Enhancing appeal of delivery options
- Rebalancing the business
- Offering more payment options
- Where next?
- Company background
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- Figure 137: Dixons Carphone: retail brands, by country, 2017
- Company performance
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- Figure 138: Dixons Carphone: group financial performance, 2013/14-2016/17
- Figure 139: Dixons Carphone: group sales performance, by new reporting segments, 2016/17
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- Figure 140: Dixons Carphone: outlet data, 2013/14-2016/17
- Retail offering
E-Square
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- Company background
- Key figures
- Members
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- Figure 141: E-Square: membership, 2017
Euronics International
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- What we think
- New store concepts dedicated to helping consumers make the right mobile choice
- Ditching the tech jargon
- Focusing on VR and smart home solutions
- A more dynamic in-store shopping experience
- Selling fitted kitchens, a potential new revenue earner for UK stores
- Company background
- Company performance
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- Figure 142: Euronics International: estimated group financial performance, 2012-16
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- Figure 143: Euronics International: estimated outlet data, 2012-16
- Retail offering
Maplin Electronics
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- What we think
- New brand strategy and visual identity aimed at broadening its appeal to non-specialist customers
- ‘Store of the future’ format increasing dwell time and driving footfall
- GAME concessions give consumers another reason to visit Maplin stores
- Ramping up support services to compete with Dixons Carphone’s new expert tech service
- Online enhancements to help drive web-enabled sales
- Company background
- Company performance
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- Figure 144: Maplin Electronics Ltd: group financial performance, 2011/12-2016/17
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- Figure 145: Maplin Electronics Ltd: outlet data, 2011/12-2016/17
- 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
Appendix – Market Size and Forecast
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- Forecast methodology
- Market size definitions
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