UK e-Retail 2009

This publication has been discontinued on June 8, 2011.

Updated report coming soon.

Introduction

Abstract

Introduction

Verdict Research: Though online retailing is undeniably the standout performer among retail channels, it remains characterised by a lack of reliable market information. By combining a comprehensive survey of the online shopping habits of over 8,000 consumers, forecasting techniques and thorough analysis of the online market and the main players, this report is a uniquely valuable tool.

Scope of this research

• Analysis of the key issues affecting e-retail development, such as broadband access rates, search engine optimisation and rise of affiliate sites.
• Market value and growth 2003-2008 with annual forecasts to 2013 for the online market and nine key sub sectors separately.
• Consumer research analysing demographic profile of online shopper. Shopper profiles by age, gender, socio-economic group and region are also included.
• Assessment of Internet shopper behaviour including how consumers find websites and what factors determine why they prefer one retailer over another.

Research and analysis highlights

E-retail continues to outperform even in the recession. Growth in online spending in 2008 represented a considerable outperformance of the increase in total retail and in 2009 it is forecast to grow by 13.3%, despite the overall retail market shrinking by £1.7bn. But with growth slowing, retailers must work harder to stand out.

The AB shopping demographic offers retailers the most potential over the next two years. This group is now responsible for over half of all online spending. Indeed, with their more robust finances, they achieved by far the biggest growth in 2008 and were the only group to increase spend per head which now stands at over £1,000 per person.

There is major scope for women to spend more online. Men remain the biggest online spenders, but the gender split of Internet shopper numbers continues to move towards parity. Retailers must now persuade women to spend more per head. In music & video for example, men now only narrowly outnumber women, but are still responsible for 70.6% of spend.

Key reasons to purchase this research

• Gauge the size and future growth potential of the online market by sector and quantify the prospects it presents to your business.
• Gain a better understanding of the expectations of online shoppers, how to attract and convert them and what influences their loyalty.
• Learn how to manage your approach to website design, delivery operations, online marketing etc in order to maximise Internet sales growth.

Table of Contents

EXECUTIVE SUMMARY

• Key Findings
• Main Conclusions

STRATEGIES FOR SUCCESS

• Optimisation the website
  • Winning, Converting and Keeping Online Shoppers
  • Continuous cycle of improvement
  • Effective use of Web Analytics
  • Ensuring website is of interest and value to customers

• Maximising Revenues
  • Targeting Demographic Groups
  • Online Merchandising

• Managing the Downturn
  • Strategies for the recession
  • Exploit being multichannel
  • Exploit the broader customer base
  • Exploit niche categories

KEY ISSUES

• Channel Intricacy
  • Multichannel Retailing Becomes Increasingly Complex
  • More Online Channels

• More Ways to Drive Traffic to Websites
  • Proliferation of Affiliate Sites
  • Increasing Role of Social Media
  • Dominance of Google
  • Influence of Customer Reviews and Forums

• More Fulfilment Requirements
  • Delivery & Fulfilment Operations Grow in Scale
  • Expansion of EU Cross-border e-retail

• Wider Economic Slump
  • Impact of Global Recession

• Fraud & Security
  • Online Shopping Security
  • Card Payment Security

THE FUTURE OF E-RETAIL

• Store of the Future
  • Heigthened Interaction
  • Improved Customer Experience

• Website of the Future
  • Innovate and Differentiate
  • Visual Merchandising Key
  • Widgets Provide Customer Interaction

• Mobile Technology
  • Obstacles to m-Commerce
  • Mobile-friendly Stores
  • Mobiles as a Pretailing Tool
  • Easier Interaction With Customers
  • Mobile Phone Tagging
  • Mobiles Improve Instore Efficiency

MARKET ANALYSIS

• Market Definition & Research Methodology
• Key Market Facts
• Online Shopper Population
• Online Market Expenditure
• How Spending is Channelled
• Spending Forecasts
• Online Retail Sales as a Percentage of All Retail Sales
• Expenditure per head
• Frequency of Purchase & Transaction Values

SECTOR ANALYSIS

• Sector Comparisons
• Online Sector Shoppers by Gender
• Books
  • Major Players
  • Outlook

• Clothing & Footwear
  • Major Players
  • Outlook

• DIY & Gardening
  • Major Players
  • Outlook

• Electricals
  • Base: Online electricals shoppers 15+
  • Major Players
  • Outlook

• Food & Grocery
  • Major Players
  • Outlook

• Furniture & Floorcoverings
  • Major Players
  • Outlook

• Health & Beauty
  • Major Specialists
  • Outlook

• Homewares
  • * Shop Direct Group includes Littlewoods, Littlewoods Shop Direct, Additions Direct, Great Universal, Choice, Kays, Abound, Marshall Ward
  • Major Players
  • Outlook

• Music & Video
  • Digital Downloading
  • Major Players
  • Outlook

CONSUMER ANALYSIS

• Summary
• Consumers Internet Access
• Internet Usage
• Preferred Remote Shopping Channels
• Choosing the Internet to Shop
• Internet Shopping Profile by Age Group
• Internet Shopper Profile by Gender
• Internet Shopper Profile by Socio-demographic Group
• Internet Shopper Penetration by Access Device
• Shopping Frequency & Transaction Value
• Frequent Online Shoppers
• Consumer Attitudes to Online Shopping
• Internet as a Research Tool
• Consumer Use of Multichannel Services
• Finding a Retailer
• Choosing a Retailer
• Loyalty Drivers

GLOSSARY

• Abbreviations

TABLES

• Table: Examples of social media sites with a retail interest 2009
• Table: Fulfilment issues, solutions and implications 2009
• Table: PCI DSS requirements 2009
• Table: Online spending growth 2003-2008
• Table: Shopping population by sector 2013 on 2008
• Table: Online spending by sector 2003-2008
• Table: Sector sales y ear-on-year change % 2003-2008
• Table: Online retail spending sector summary 2013 on 2008
• Table: Online penetration (share of retail) by sector 2013 on 2008
• Table: Online spending by sector (books to furniture) 2003-2013
• Table: Online spending by sector (health to total) 2003-2013
• Table: Online spend change % by sector (books to furniture) 2003-13
• Table: Online spend change % by sector (health to total) 2003-2013
• Table: Online as a % of spend by sector (books to furniture) 2003-2013
• Table: Online as a % of spend by sector (health to total) 2003-2013
• Table: Sector spending breakdown between Internet and the rest 2008
• Table: Spend per head by sector 2008
• Table: Frequency of shopping by sector 2008
• Table: What is important when buying online? % of online shoppers by sector October 2008
• Table: Why buy from one retailer in preference to another? 2008
• Table: Why buy from one retailer in preference to another? ( Continued) 2008
• Table: Sectors A-F breakdown of online shoppers by gender 2008
• Table: Sectors F-Z breakdown of online shoppers by gender ( continued ) 2008
• Table: Online spending on books 2003-2008
• Table: Clothing & footwear spending online 2003-2008
• Table: DIY & gardening spending online 2003-2008
• Table: Electricals spending online 2003-2008
• Table: Food & grocery spending online 2003-2008
• Table: Online furniture & floorcoverings 2003-2008
• Table: Health & beauty spending online 2003-2008
• Table: Homewares spending online 2003-2008
• Table: Music & video spending 2003-2008
• Table: Internet users and online shopper profiles 2008
• Table: Profile of online shoppers 2003-2008
• Table: Online shopping v physical shopping October 2008
• Table: Number of online shoppers by age group 2003-2008
• Table: Online spend by age group - total & per head 2008
• Table: Online spend per head by age group 2003-2008
• Table: Online spend by socio-economic group - total & per head 2008
• Table: Online shopper profile by demographic 2008
• Table: Researching products before purchasing - by sector 2008

FIGURES

• Figure: Strategies for e-retail success
• Figure: Managing the multichannel experience 2009
• Figure: Website optimisation cycle
• Figure: Process of website optimisation
• Figure: Respondents saying consumer views on a website are important 2008
• Figure: Respondents saying consumer views on a website are unimportant 2008
• Figure: Respondents saying other website features are important 2008
• Figure: Respondents saying other website features are unimportant 2008
• Figure: Respondents saying product information and guidance on a website is important 2008
• Figure: Respondents saying product information and guidance on a website is unimportant 2008
• Figure: Respondents saying return and delivery options are important when shopping online 2008
• Figure: Respondents saying return and delivery options are unimportant when shopping online 2008
• Figure: Respondents saying the technical aspects of a shopping website are important 2008
• Figure: Respondents saying the technical aspects of a shopping website are unimportant 2008
• Figure: Respondents saying customer support in an important aspect of an online store 2008
• Figure: Respondents saying customer support is an unimportant aspect of an online store 2008
• Figure: Key issues in online retailing 2009
• Figure: Customer brand interaction more intricate 2009
• Figure: Benefits of instore kiosk 2009
• Figure: Using a mobile to shop 2009
• Figure: Use of affiliate sites 2009
• Figure: Benefits to retailers of utilising social media sites 2009
• Figure: How to maximise benefits of social networking sites 2009
• Figure: Components of a useful retail-related social networking site 2009
• Figure: Marketplace sites consumers have purchased from 2008
• Figure: Online shoppers use of online reviews 2008
• Figure: Managing a successful product review site 2009
• Figure: Home shopping purchasing process 2009
• Figure: Home shopping delivery process 2009
• Figure: Potential benefits of EU cross-border e-retail 2009
• Figure: Retailer barriers to EU cross-border e-retail 2009
• Figure: Consumer barriers to EU cross-border e-retail 2009
• Figure: e-Retail expenditure and y-o-y growth 2008-2013
• Figure: Future of e-retail 2009
• Figure: Key market facts 2008 on 2007 and forecasts for 2009/2013
• Figure: Number of online shoppers and growth % 2003-2008
• Figure: Percentage of adult population shopping online 2003-2013
• Figure: Online shoppers as % of those with Internet access 2006-2008
• Figure: Online shoppers as % of those with Internet access 2006-2013
• Figure: Online spending share of retail 2003-2013
• Figure: Year-on-year growth in online shopping population 2003-2013
• Figure: Percentage breakdown of online spending by sector 2008
• Figure: Value of online retail spending 2003-2013
• Figure: Online sales as a percentage of total UK retail 2008
• Figure: Average online spend per head 2003-2008
• Figure: Online spending per head 2003-2013
• Figure: Average online transaction value & trips per year 2003-2008
• Figure: Why shop for books online? October 2006-2008
• Figure: Books: internet v instore October 2008
• Figure: Books penetration of online shoppers October 2006-2008
• Figure: Which retailers do online book shoppers buy from? October 2007-2008
• Figure: Why shop for clothing & footwear online? October 2006-2008
• Figure: Clothing & footwear: internet v instore October 2008
• Figure: Clothing & footwear penetration of online shoppers Oct 2006-08
• Figure: Which retailers do online clothing & footwear shoppers buy from? October 2007-2008
• Figure: Why shop for DIY online? October 2006-2008
• Figure: DIY: internet v Instore October 2008
• Figure: DIY penetration of online shoppers October 2006-2008
• Figure: Which retailers do online DIY shoppers buy from? October 2007-2008
• Figure: Why shop for electricals online? October 2006-2008
• Figure: Electricals: internet v instore October 2008
• Figure: Electricals penetration of online shoppers October 2006-2008
• Figure: Which retailers do online electricals shoppers buy from? Oct 2007-2008
• Figure: Why shop for food & grocery online? October 2006-2008
• Figure: Food & grocery: internet v instore October 2008
• Figure: Food & grocery penetration of online shoppers October 2006-2008
• Figure: Which retailers do online food & grocery shoppers buy from? October 2007-2008
• Figure: Why shop online for furniture & floorcoverings? Oct 2006-2008
• Figure: Furniture & Floorcoverings: internet v instore October 2008
• Figure: Furniture & floorcoverings penetration of online shoppers October 2006-2008
• Figure: Which retailers do online furniture & floorcoverings shoppers buy from October 2007-2008
• Figure: Why shop for health & beauty online? October 2006-2008
• Figure: Health & beauty: internet v instore October 2007
• Figure: Health & beauty penetration of online shoppers Oct 2006-2008
• Figure: Which sites do online health & beauty shoppers buy from? October 2007-2008
• Figure: Why shop for homewares online? October 2006-2008
• Figure: Homewares: internet v instore October 2008
• Figure: Homewares penetration of online shoppers October 2006-2008
• Figure: Which sites do online homewares shoppers buy from? October 2007-2008
• Figure: Why shop for music & video online? October 2006-2008
• Figure: Music & video: internet v instore October 2008
• Figure: Music & video penetration of online shoppers Oct 2006-2008
• Figure: Have you ever downloaded free music files from the Internet? October 2005-2008
• Figure: Which retailers do online music & video shoppers buy from? October 2007-2008
• Figure: Internet access by gender 2006-2008
• Figure: Internet access by age 2006-2008
• Figure: Internet access by socio-economic group 2006-2008
• Figure: Internet access by device 2008
• Figure: Mobile broadband penetration 2008
• Figure: Uses cited for the internet 2008
• Figure: Internet use breakdown by gender 2008
• Figure: Use of remote shopping channels by gender 2008
• Figure: Use of remote shopping channels by age group 2008
• Figure: Use of remote shopping channels by class 2008
• Figure: Consumers preference of shopping method October 2008
• Figure: Consumer satisfaction with online retail 2008
• Figure: Penetration: online shoppers % all adults by region 2008
• Figure: Profile of online shoppers by age group 2006-2008
• Figure: Number of online shoppers by age group 2006-2008
• Figure: Online spend by age group 2006-2008
• Figure: Age breakdown of internet food & grocery shopping usage 2008 %
• Figure: Age breakdown of internet non-food shopping usage 2008 %
• Figure: Online shoppers breakdown by gender 2006-2008
• Figure: Number of online shoppers 2006-2008
• Figure: Total online spending by gender 2003-2008
• Figure: Average spend per head by gender 2003-2008
• Figure: Online gender split of shopper numbers by category 2008
• Figure: Socio-economic profile of internet shoppers 2006-2008
• Figure: Number of online shoppers by class 2006-2008
• Figure: Total online spending by socio-economic group 2006-2008
• Figure: Penetration by device - % of users shopping on internet 2008
• Figure: Average number of online shopping trips in the past 12 months by gender and total 2006-2008
• Figure: Number of online shopping trips in the past 12 months by age 2006-2008
• Figure: Average transaction size by age 2006-2008
• Figure: Frequent online shoppers (10+ times a year) 2003-2008
• Figure: Consumer attitudes to online shopping: security issues 2008
• Figure: Consumer attitudes: retailer reputation preferences 2008
• Figure: Consumer attitudes to online shopping: value issues 2008
• Figure: Consumer attitudes: logistical/technical issues 2008
• Figure: Researching before purchases by demographic 2008
• Figure: Click & collect penetration - pay online or instore 2008
• Figure: Top 10 methods of finding a website 2006-2008
• Figure: Top10 reasons shoppers buy from one site over another 06-08
• Figure: Reasons online shoppers return to websites 2008

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