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Big-name UK retailers still baffled by eCommerce basics…

Research published on eCommerce performance has revealed that UK retailers are missing out on £2 billion in online revenue every year due to the running of slow websites and failing to introduce ‘guest checkouts’.

Based on four key factors: technology, marketing, trading, and service and logistics, the Scorecard analysis conducted by Summit found Argos and Sainsbury’s to be the top performers across the board, closely followed by John Lewis, Screwfix and Tesco.

Dorothy Perkins, Evans, Topshop and Superdrug all hold the bottom position with an overall score of 56 per cent, and as a result of limited contact options and slow response times for customers, Topshop scored just 13 per cent for online customer service.

The report also found that 38 per cent of the top 50 retailers do not have a guest checkout option, costing an estimated £1 billion per year as over a quarter of shoppers abandon their baskets without this option.

Hedley Aylott, co-founder and CEO at Summit said: “The Summit Scorecard provides us with an understanding of what the top 50 UK retailers are really like to shop with online. “While retailers have made huge strides, with most now getting mobile right, many are still struggling to offer delivery options that meet shoppers’ needs.

While this will not be an easy fix, no-one in retail needs further convincing or evidence of the importance of the online experience on overall profitability. These results are confirmation that there is still a lot of room for improvement, highlighting the real opportunity for retailers to fix some of the basics.”

Despite the imperfections, when looking at eCommerce technology and mobile compatibility, Scorecard discovered that 92 per cent of the top 50 retailers have websites built for mobile.
To download the full report, click here

Christmas and January sales to be dampened by Black Friday…

More than two-thirds of consumers plan to take full advantage of Black Friday deals, which kick-starts the surge of Christmas shoppers, but consumers anticipate a curb in spending through the month of December and in the January sales. 

As it’s revealed that 62 per cent are planning to use Black Friday (November 25) as an opportunity to buy discounted presents, a survey by retail and brand consultancy, The Market Creative, found that 26 per cent of shoppers anticipate they will spend less money in December. 

Analysts suggest the impact on spending is likely to run into early 2017, as 28 per cent of shoppers said the introduction of Black Friday and Cyber Monday had made them less interested in the January sales, due to generally better and more attractive offers. 

Sue Benson, managing director at The Market Creative said:”Scenes of frenzied shoppers battling for bargains have influenced our perception that Black Friday deals are shorter and deeper than other sales. Coupled with our desire for instant gratification Black Friday could well be a retailers dream period as they get much-needed pre-Christmas sales in early.  
“But it’s not all good news. The Christmas and January sales have traditionally been the most lucrative for retailers and Black Friday has dragged spending forward. Consumer wallets are finite, so we’re seeing December full-price sales and profits cannibalised. Another watch out is the discount strategy involved, if merchandise isn’t shifted how low are retailers prepared to go in the traditional Boxing Day and January sale period?”

Although Black Friday has changed the Christmas shopping habits of younger generation consumers, the trend was less apparent among older age groups. Of the 18-24 year olds surveyed, 83 per cent plan to take advantage of Black Friday deals and 86 per cent will buy discounted Christmas gifts. However, 47 per cent of shoppers over 65 plan to buy something and just a quarter will buy Christmas presents. 

Access the full report here 

Global forecast offers analytical view of Christmas retail threats…

Electronics, electronic accessories, children’s toys and apparel are expected to be the most stolen items during the Christmas period, according to the 2016 Retail Holiday Season Global Forecast. 

Underwritten by an independent grant from Checkpoint Systems, Inc. and carried out by retail loss prevention analyst, Ernie Deyle, the research indicates that retailers across all 13 analysed markets – including: the UK, the US, Australia, Canada and Japan – will experience both the heaviest sales volumes and the weakest performances specific to margin rate.  

Profitability strains tend to manifest during the holiday season, largely down to increased theft/shrink from internal sources — primarily via employee theft and other sales reducing activities (SRAs) — and external factors (organised retail crime/shoplifting). 

Deyle said of the findings: “Building holiday inventories earlier and specifically for high-risk items may lead to increased sales reduction pressures, including markdowns and shrink throughout the fourth quarter. In fact, as this report reveals, despite more than one-third of the year’s retail sales expected to be registered in just these three months, more than 40 per cent of SRAs are also incurred in this same time period. This leads to increased shrink, and puts additional strains on brick-and-mortar retailers already reeling from an ongoing inhospitable retail market.” 

Recommendations made in the report for retailers to address include: 

  • Properly train seasonal help to manage the increasing complexities of the season.
  • Maintain operational execution standards, while being vigilant regarding financial performance expectations.
  • Employ point of sale data analytic technology focused on SRAs to stabilise inventory loss and ensure on-shelf availability while enhancing product protection counter 
  • Update planning and financial performance models to properly account for advanced deliveries of seasonal products, since the seasonal build starts earlier now than in the past.
  • Enhance oversight to seasonal/holiday merchandise to ensure financial goals are achieved while cost centre controls are contained. 

Obtain a copy of the full report here  

Personalisation to substantially spur digital coupon growth by 2021…

A new study from the digital market research specialists, Juniper Research has found that the number of coupons issued via mobile and online channels will grow by more than 60 per cent over the next five years – increasing from 224 billion in 2016 to an estimated 362 billion by 2021.

The ‘Mobile & Online Coupons: Loyalty & Beacon Engagement 2016-2021’ report indicates growth in digital coupon volumes is mainly attributed to a greater retailer emphasis on the provision of highly targeted, personalised offers to consumers; as well as brands deploying artificial intelligence applications which can interact with consumers via social media and messaging applications such as Facebook Messenger.

A wide-scale deployment of beacons – Bluetooth devices which can send offers to consumers whilst they shop – have been constrained, as research author, Lauren Foye explains how beacons enable retailers to collect valuable and relevant data points: “For retailers one of the major tools is knowing their customers. Tracking user movements in store via beacons allows for targeted marketing and offers, this can also aid in providing invaluable data and statistics to a company, this then later applied to drive sales.”

Read the full report here

Consumer frustration with in-store and online grocery shopping…

According to a new report commissioned by the retail app, Ubamarket, a vast majority of consumers are becoming more and more frustrated with online and in-store food shopping; with 66 per cent of the 2,007 individuals surveyed claiming a high level of dissatisfaction with in-store shopping is due to not being able to find the products they want, as well as long till queues.

The ‘Reviving Retail 2016’ report details a further 71 per cent of  UK online grocery customers were unhappy with the quality of service they received, indicating the main reasons behind a less than successful experience is down to a lack of being able to pick produce items, in addition to receiving unwanted replacement items.

You can read the founder and CEO of Ubamarket, Will Brrome’s ‘Keeping Up with the Times: Why Food Shopping Needs to Change’ blog here

Industry Spotlight: ‘Pigeon-holing’ potential reason behind rising shrink losses…

Mass merchants and department stores have experienced an alarming 58 per cent increase in shrinkage rates since last year, which, according to the 2016 UK Retail Fraud Survey, is no surprise due to retailers continuing to treat online and store loss prevention separately.

The survey, published by Retail Knowledge and sponsored by the outsourced inventory data collection provider, WIS International — for the second consecutive year –also details the expensive systems, processes and strategies presently in place at some of the UK’s top retailers.

Research has indicated that retailers are increasingly taking a ‘joined up’ approach to store and online loss prevention by implementing a holistic approach to risk across all channels. However, somewhat contradicting this, the same survey a few years ago concluded that just a small percentage of retailers took this stance. This year, only 30.3 per cent of retailers continue to operate in silos across channels; a significant shift in how risk is managed and, in this respect, the report considers mass merchants and ‘large format speciality’ to be lagging behind; with 60 per cent and 40 per cent respectively still treating channels separately.

In addition, retailers who have decided to take a holistic approach to loss prevention across all channels have seen a decrease in shrinkage rates, compared to those opting for the separate avenues have seen a substantial increase in the 12 months; contributing to the calculated £2.34 billion loss to shrink.

Paul Bessant of Retail Knowledge said: “Today departments work together across the broad range of disciplines necessary to support the multiple channels through which business is conducted. This inter-departmental approach typifies the operations of leading retailers and is reflected in this survey which, inter alia, documents the change from a silo approach to online and offline, to a holistic one.”

He continued: “Only 36.6 per cent of retailers treat online and offline separately, compared with figures going back to 2013 when the figure was closer to 100 per cent. This is really great news, considering shrink has fallen again this year, it really shows that working collaboratively is the most effective way of beating retail crime. Those retailers that do treat online and offline separately need to rethink their approach if they are to effectively lower shrink year on year.”

Further highlights of the survey include the decrease in credit card fraud; down from 55 per cent in 2015 to 51 per cent in 2016; return fraud has dropped from last year’s figure of 0.5 per cent to 0.33 per cent of sales; and store loss prevention spends has jumped to 1.06 per cent from 0.6 per cent of sales.

The US is also currently dealing with retail shrink losses, as the University of Florida’s 2016 National Retail Security Survey, retail shrink has remained at ‘historically’ low levels with losses from shrink increasing from $44 billion in 2014 to $45.2 billion last year; and inventory shrink as a percentage of retail sales still at the same rate as the year before.

Report exposes best and worst performing UK multi-channel retailers…

The eCommerce analyst group, Ampersand, has released its annual ‘Multi-channel Retail Report: 2016‘ which, based on Ampersand’s Real Matrix scoring mechanism, explores the best and worst performing multi-channel retailers and details core strategic methods for improving the customer service experience.

Surveying 160 retailers with a high street and online presence, the research suggested that chains including Argos, River Island and Halfords are the top performing retailers in multi-channel integration, whereas companies such as Thorntons, Mulberry and Lloyds Pharmacy were analysed as some of the worst performing in the sector.

Furthermore, delivery and return operations continues to prove a complex operation in regards to options and pricing, with just 24 per cent of retailers offering same or next-day click and collect and is  significantly lower than the 40 per cent of retailers calculated in the 2015 report.

Darryl Adie, managing director at Ampersand commented: “A truly multi-channel offering requires an understanding of customer behaviour across all shopping channels and how this should impact your overall business strategy. Many retailers are still taking a siloed approach to ecommerce; Ampersand hopes to encourage an integrated approach to retail across all channels through our report. Our research provides retailers with a quantitative framework for measurement which they can benchmark against and use to develop their multi-channel strategy.”

The report also revealed that 66 per cent do not advertise free postal returns for online purchases; in addition to 62 per cent currently offering real-time stock availability.

Download the full report here