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John Lewis comes top in Customer Satisfaction Awards

John Lewis & Partners won four awards at the GlobalData Customer Satisfaction Awards 2019, including the Best Retailer category, having been runner up for the past four years.

The decision to invest in its own-brand and exclusives has paid-off for the department store as it takes home awards including Best Electricals Retailer and Best Homewares Retailer.

Patrick O’Brien, UK retail research director at GlobalData Retail, said: “While its department stores peers have struggled, John Lewis’s brave store investment strategy has paid off, creating highly enjoyable places to shop. Its high standards of service across stores and online, together with its continuing commitment to price matching, clearly resonates with shoppers.”

Online pureplays Amazon and AO had stopped John Lewis & Partners from winning Best Electricals Retailer for the past two years, but the department store finally pipped them to the post in 2019.

John Lewis & Partners investment in range and service in its home and electricals categories, combined with its online offer, is paying off as its customers enjoy exclusive products and strong service levels.

The athleisure trend also shows no sign in slowing down, with Adidas and Nike winning Best Clothing Retailer and Best Footwear Retailer respectively. It highlights that brands are successfully cutting out the middleman and engaging directly with their customers.

Maureen Hinton, global research director at GlobalData Retail, said: “The ability of sportswear brands to win the highest level of customer satisfaction is down to their complete understanding of their customers; their capacity to connect with them; and to create products and experiences that fit current consumer trends and how they want to shop now.”

The sportswear market is forecast to grow 20.9 per cent over the next five years, and investment by brands such as Nike and Adidas are an integral part of this market’s success.

These brands that sell directly to consumers and through popular retailers such as JD Sports are in tune with their customers’ demands, ensuring that online and instore environments are tailored to their needs as well as including engaging content. This has ensured that Adidas has won Best Clothing retailer 2019 and Nike has won Best footwear Retailer 2019.

There was polarisation in the Best Food & Grocery Retailer award with winner Aldi, triumphing with its focus on price while Waitrose & Partners with its premium focus coming in third.

Historically, value-focused food retailers have performed well in these awards but the inclusion of Waitrose & Partners highlights that when high quality food is done well, consumers are willing to make the investment. Waitrose has also devoted time to sustainability with this being well received by its customers as the premium grocer aims to eliminate all unnecessary plastic from its stores and make all its own-brand packaging either reusable or widely recyclable.

The awards were based on consumer research conducted by GlobalData. 

Modest Christmas cheer for UK retail with £99bn ‘golden quarter’ sales forecast

Bucking the current gloomy trends, GlobalData has forecast that total UK retail sales in Q4 will rise by 2.0% to £98.8bn.

Food & grocery spend is set to drive this, as food inflation leads to a 2.5% increase in this category, while Non-food spend is forecast to grow at 1.6%, with health & beauty predicted to be the best performing retail sector.

GlobalData says that while it has been a year of retail failures, profit warnings and store closures so far, the ‘golden quarter’ offers retailers the opportunity to gain sales from consumers who are finally ready to prioritise shopping.

However, it cautions that low consumer confidence and confusion over Brexit will inhibit big-ticket spend, and that trading down to value retailers is becoming more widespread, due to the rapid store expansion of players such as B&M and Home Bargains.

Food & grocery

GlobalData says growth within food & grocery will slow to 2.5% this Christmas, against an inflation-driven comparative in Q4 2017 (3.6%), as food inflation falls.

Both food and alcoholic beverages will see a significant fall in volume growth compared to Q4 2017, as consumers trade down in both of these categories.

However, it says food is more resilient to low consumer confidence than other retail sectors due to its essential nature. Expected trends that retailers will focus on over Christmas include alcohol-free beverages (e.g. flavoured tonic waters), specialist teas, and plant-based protein side dishes (e.g. lentils, quinoa, chickpeas & tofu).

Fashion & beauty

It has been a less than stellar year for many clothing retailers and Q4 will be no different, according to GlobalData. Midmarket players are expected to be left out in the cold once again as shoppers trade up for enhanced quality, making it yet another challenging Christmas ahead for clothing market leader M&S.

Giving shoppers a reason to make wants-driven purchases, and forgo spending on other categories, through compelling product and value for money will be the key to a successful festive season. Online pureplays such as ASOS and boohoo are likely to be the biggest winners this Christmas given their potent mix of discounts, and fast and convenient fulfilment.

Health & beauty remains a ‘winner’ at Christmas and shoppers are expected to splurge on premium lines for both gifting and self-treating. This is helped by a wider choice of brands and greater shopper knowledge, especially in terms of ingredients. With the appeal of department stores on the wane, we expect online pureplays to take advantage, luring shoppers in with discounts and loyalty schemes.

Electricals & entertainment

With Q4 accounting for a third of annual electricals spend, GlobalData says the period offers retailers the best opportunity to capture spend as shoppers benefit from discounting periods such as Black Friday and early Boxing Day sales. Less generous discounting last year deterred shoppers from splurging on these occasions, but volumes are forecast to grow this year as cost prices level.

Mobile phones, laptops and tablets will offer the greatest growth potential for retailers, with Apple releasing its budget-friendly iPhone XR and MacBook Air in the period. While Apple is still much more expensive than its competitors, these new releases offer retailers an opportunity to entice less-affluent shoppers to trade up when buying gifts during the festive season.

In entertainment, the release of Red Dead Redemption 2 this month has been highly anticipated and is likely to drive spend in Christmas gifting. More Nintendo Switch games are available this year which is necessary to mitigate the lack of a stand-out new console.

Home

The home category, which includes furniture and floorcoverings, homewares, and DIY and gardening is forecast by GlobalData to grow 0.6% in the final quarter of 2018 compared with the previous year. Much of this growth will come from homewares (+1.4% year-on-year), which has been more resilient in 2018 than other home categories; consumers have sought to refresh their homes, and interest in interior design has grown through social media and fashion retailers’ own home collections. The effects of the latter should be particularly notable over the seasonal period.

Online

Capping off a strong year for the UK online market in which multichannel retailers have consistently reported robust digital growth, Christmas is set to be the icing on the cake with more consumers than ever choosing to buy online for the festive period, according to GlobalData.

It says online pureplays will prove popular again this year thanks to their best-in-class shopping experience. Amazon is set to remain a top choice for gift purchases as its broad product range appeals, and as Amazon Prime subscribers turn to the retailer as their first port of call.

Online spend will be bolstered this Christmas by Instagram’s shopping function, which launched this year, as well as Pinterest featuring direct links to retailers’ product pages. The ease of purchase through social media will drive impulse purchases of partywear as well as gifts across sectors.