Thursday 27th February 2014 UK Retailer John Lewis Pushes Online Shopping Innovation
Most of us see technology and innovation as going hand in hand - but in the retail world, innovation can sometimes be hard to come by, as many companies operating in low-margin sectors often have little time or money expensive development projects that aren't guaranteed to succeed. If there's one thing innovation needs, it's the room to explore and expand, and occasionally to fail, as the safest options are rarely innovative. In the online retail world, we're seeing a number of competing possibilities emerge to solve the current dichotomy between online retail and brick and mortar stores.
As the ubiquity of mobile phones starts to blur the line between the digital world and the physical one, many retailers are struggling to create innovative solutions that actually solve problems and create communication opportunities for customers that they'll actually use. Long gone, thankfully, are the days when companies can simply roll out a cheap, hurriedly-developed mobile app and simply expect users to engage meaningfully with it. In order to bring a fresh sense of innovation and inspiration to this dilemma, UK-based department retailer John Lewis is taking the new approach of investing in a brand new project with the goal of fostering new methods of omni-channel integration and general online innovation.
The digital workshop, dubbed "JLab", is set to kick off in June in partnership with well-known tech entrepreneur Stuart Marks, and is open to all technology developers who are interested in tackling the project. After the initial development phase ends, the best ideas will be sorted through, and a winner picked to receive an investment of £50,000 from JLab to continue to develop the chosen project. If the final development is a success, the technology will be deployed across John Lewis's 40 stores as as well as it's digital storefronts.
JLab is the brainchild of John Lewis's retail director Andrew Murphy, who said of the project, "We know customers value being able to shop with John Lewis by phone, in shops and online and anything which enhances or simplifies that experience is of interest to us." He went on, "What I'm looking for from the successful JLab applicants is deliverable but stretching innovation which offers real benefit for customers in both our bricks and clicks businesses."
It goes without saying that other major players in the online retail sector will be watching JLab closely. If the venture winds up producing successful ideas that can be leveraged to boost sales and customer satisfaction, we'll be sure to see more of this type of technological incubation project in the future.
Posted on February 27th 2014 at 05:16am by James
Tuesday 25th February 2014 Automating the Logistics Behind Online Retail
Logistics has always been the largest stumbling block when it comes to a smooth online shopping experience. No matter how well crafted a website is, and how minimal its shopping cart abandonment rates are, if the supply chain that actually gets the product into the customer's hands is flawed, the customer is going to come away feeling like the process was flawed on the whole. Increasingly, major online retailers like Amazon, and their growing competition from Google in the online shopping world, are removing as many human links from the logistics supply line as possible.
Ever since Amazon pulled a flashy publicity stunt right before Cyber Monday by announcing a long-term plan to employ automated drones as a delivery system, there has been an increased focus on the role of automation in the logistics back end. Robotics, on the whole, generally doesn't have much traction with the average consumer. Consumer robotics are clunky, over-priced and generally not up to scratch when it comes to doing things by hand. However, in a highly controlled and consistently cataloged environment such as a warehouse, seemingly clunky algorithms suddenly blossom into incredibly useful tools for models of efficiency.
Nothing highlights this better than Amazon's recent acquisition of Kiva Systems, a manufacturer of industrial robots designed specifically for warehouse conditions. Amazon previously operated as a customer of Kiva Systems, but decided to simply buy the entire company outright for $775 million USD in cash - their second-largest acquisition in the history of the company (second only to the Zappos.com buyout in 2009, at $847 million USD). Kiva's robots are found in the warehouses of other major retailers as well, such as Staples and Saks, but there's no word as to whether or not they're going to have to go elsewhere for their robotics solutions.
There has long been some trepidation among the general workforce about the idea that robots are replacing humans in manufacturing and logistics positions, but it's a simple economic fact that most consumers are going to prefer a product with a lower price - or failing that, companies are going to prefer the highest profit margin - and there's no denying the increase in productivity that automation provides. In the highly competitive world of online retail, every competitive advantage must be implemented in order to stay ahead of a never ending line of competitors hoping to gain market share, and even since long before Henry Ford's assembly line, automation has always been the key to staying ahead of the game.
Posted on February 25th 2014 at 03:35am by James
Friday 21st February 2014 Indian E-Commerce Ramping Up
They're everywhere in the financial news nowadays - the growing strength of the BRIC economic bloc, the rapidly expanding economies of Brazil, Russia, India and China. China's growth is the stuff of legend, but no more so than in their e-commerce sector. At last, the latest forecasts on the Indian e-commerce sector are starting to show similar gains. Despite the fact that the Indian economy is at a bit of a standstill at the moment overall, individual sectors show some astonishing growth potential, and no more so than online retail. As more and more of the country's over 1 billion inhabitants comes online, the consumer appetite for shopping is transitioning at the same time.
The latest research and forecasts from Crisil Research Ltd, an industry analysis firm based in Mumbai, has projected growth that rivals the astonishing growth numbers that China has been displaying, estimating that online shopping revenues in India could triple over the next three years to over $8 billion USD. Since 2007, e-commerce revenues have been growing at an average rate of 56% each year, and there's no reason to expect that to slow any time soon.
Current estimates place the number of internet connected citizens at around 200 million, and consulting firm McKinsey & Co. estimates that number is set to rise sharply to nearly 500 million in by the year 2015. This surge in connected citizens and its corresponding e-commerce potential has attracted a number of companies to the growing sector, both from within India and without. Jabong.com, one of the largest e-commerce general retailers in India, recently raised $100 million USD in equity funding from a private equity group backed by the government of the United Kingdom, CDC Group PLC, which explores growth potential in emerging markets such as those found in the BRIC.
These incredible numbers haven't been ignored by the major players in the global e-commerce industry, with retail giant Amazon launching it's first foray into the Indian market in June of 2013. Expect to see sudden expansions from other major companies in the coming months as well, as large online retailers around the globe start embracing the global potentials of high degrees of connectivity and ease of shipping across long distances. Amazon may be the first to test the e-commerce waters in India, but Chinese rival Alibaba.com are doubtless already planning strategies to leverage the same burgeoning markets.
Posted on February 21st 2014 at 02:18am by Ade
Wednesday 19th February 2014 VAT Changes Across EU Shake Up E-Commerce
Perhaps the most intriguing loopholes in the e-commerce world is the widely varied way that sales taxes are applied. In much of North America, purchases made from a business located outside of the country or, in many cases, even outside the same state or province, are exempted from sales tax in either location. In the EU, the situation is slightly different, with Value Added Tax (VAT) being calculated based on where the seller is located. This has had significant impact on where many corporations choose to establish their home offices, with Luxembourg being one of the most popular choices thanks to its relatively minor corporate taxes and low VAT rates, which allows companies to offer lower overall prices to the consumer. However, recent changes to how VAT is applied to digital products stand to shake up the current system, and put millions into the tax coffers of nations that have so far been shortchanged.
The new rules, which apply to the retail prices of digital products such as telecommunications and digital products such as apps, e-books, and even cloud-based data storage services, will shift the location where VAT is applied from the company's location to that of the consumer. While these changes have been in the works for some time, many companies have taken full advantage of lower VAT rates, among them tech giants such as Apple, Microsoft and Amazon.
Interestingly, one of the most affected markets may be a surprising one: e-books. E-book retailers are almost exclusively located in Luxembourg, thanks to a VAT rate on the product that is as little as 3%. Just considering the e-book sales made by Amazon alone, the VAT reform would net the government in the United Kingdom upwards of tens of millions of pounds. In the other affected markets, the impact will be significantly less, as the VAT rates of the two countries vary by much smaller margins, averaging near 5% difference. Both Microsoft's XBox games division and Apple's iTunes division are also both based in Luxembourg, however those markets are yet to come close to the current scope of e-book sales.
Unfortunately, of course, most companies aren't likely to take the VAT hit to their profit margins lying down, and will wind up passing on some or all of the adjusted cost to the customer. However, it's likely to give a boost to companies that don't have the luxury of locating themselves in a particularly low VAT jurisdiction, allowing them to compete more fairly in the marketplace of retail prices.
Posted on February 19th 2014 at 02:15am by Ade
Friday 14th February 2014 Is E-Commerce Tech Keeping Up With the Needs of Small Business?
As more and more small businesses are seeing the value of online retail and moving from brick and mortar to the web, we're seeing an interesting type of evolution take place. In the beginning of the e-commerce revolution, companies had to spend a fair amount of money on developing retail solutions for their own companies. There was no Magento, no Shopify, and no Zen Cart, and very little was understood about how to optimise any of the aspects that we now take for granted in e-commerce (sales funnels, conversion rates, cart abandonment rates, etc). There are a number of companies, as mentioned before, who have attempted to step up and create products to help ease companies through the often-confusing first steps towards creating a viable online presence. But how are these solutions really stacking up in the real world?
A recent report from online retail analysts Econsultancy attempted to answer this very question, and the results were, in a word, unflattering. Out of 3 possible ratings, 'Good', "Okay', and 'Poor', across a variety of aspects of a company's e-commerce solution, the only element that more than a third of companies rated as 'Good' was the ability of their solution to handle a large number of products, at 43%. Just over half of the companies polled said their solution was 'Okay' at handling order management, and roughly the same number rated product management and merchandising aspects as 'Okay'. The rest of the elements, all major ones, such as content management systems, SEO capabilities, site search functionality and support for mobile commerce were generally split between 'Okay' and 'Poor.
Business intelligence ranked dead last, with only 10% of companies polled saying their solution was 'Good', with as many as 46% saying their solution was 'Poor'. Considering that 37% of companies said that business intelligence is a mission critical element to their e-commerce success, it's almost shocking to see so many e-commerce solutions failing to implement a viable solution. Fortunately, there are good quality business intelligence solutions available online, including high-quality price monitoring and competitor tracking, that can fill the gaps in these out-of-the-box solutions quite handily. As the very idea of 'replatforming' (changing from one e-commerce solution to another as they evolve) sends many small businesses into hysterics, a good solution will integrate nicely with the current system and avoid the need for expensive replatforming.
Posted on February 14th 2014 at 06:39pm by Ade
Tuesday 11th February 2014 Alibaba Steps Further into US Markets
We've been discussing the rise of the BRIC economic bloc in the e-commerce sector a fair bit lately, and with good reason - all four nations (Brazil, Russia, India, and China) have been making massive inroads into the global online retail market, even as the US economy stumbles a bit, trying to find its footing. One of the most popular e-commerce sites in China currently is Alibaba.com, which is arguably the Chinese version of Amazon.com. Estimated at a value of around $128 billion USD, it's one of the world's heavyweights, although in Western markets it's known best as a business-to-business wholesaler, connecting the manufacturing power of China with the capitalist retail spirit, operating primarily through the English language site aliexpress.com. All that is set to change.
Expected to make its initial public offering later this year in of the largest IPOs since Facebook went public, they have been on a veritable buying spree, shoring up what they see as potential weaknesses in their capabilities. As part of this strategy, the company is planning to launch a consumer website, created ostensibly by two of its US-based subsidiary companies, Vendia and Auctiva. Named, '11 Main', Alibaba has been rather closed-mouthed about its intentions with the site, calling it a boutique ecommerce platform, featuring "handpicked shop owners" who sell "interesting quality products", but sure to maintain competitive pricing with Amazon.
Interestingly, Alibaba also seems to be seeking to keep the new company at arm's length as much as possible, although this is most likely a perception issue, given the current trend in the United States to be somewhat suspicious of China and Chinese companies in general. In a statement regarding the launch, the company said, “Alibaba is happy to support 11 Main. Alibaba is run by entrepreneurs and firmly believes in supporting entrepreneurs with great vision and a strong sense of mission for their companies.” This sort of attempted separation isn't likely to succeed, however hands-off Alibaba is hoping to appear. Audible has completely cornered the audiobook market in the West, and works so closely and successfully with Amazon because they're an Amazon subsidiary, and it would be foolish to attempt to separate the moves Audible makes from the moves Amazon makes.
Regardless of how it plays out, the upcoming IPO and subsequent forays into Western e-commerce markets is going to shake things up considerably, as the huge company has massive capital investment potential and clearly wants to expand its operations both in terms of scale and scope.
Posted on February 11th 2014 at 06:35pm by James
Friday 07th February 2014 Online Security a Renewed Priority for Retailers in 2014
A series of truly massive data thefts rocked the North American retail world over the course of the holiday season in 2013, with a staggering number of personal consumer details stolen from a range of US-based retailers such as high-end retailer Neiman Marcus and department store Target, which is also the third largest retailer in the United States. With what appears to have been over 100 million credit card records stolen, and Target potentially facing a $1 billion USD fine from governmental agencies, data security in both the online and offline world has become a major focus retailers hoping to avoid similar blunders.
For quite a while, a disconcerting number of US retailers have been operating under the 'school of fish' mentality, employing the bare minimum of data security in the hopes that someone else will be breached instead of them, but after the number of breaches that have been seen recently, it's clear that strategy is collapsing under the sheer volume of attempted thefts and lax procedures when it comes to online data security.
This largely stems from the antiquated credit card processes still used in much of the United States, where a magnetic swipe and signature is all that's required to make a purchase. US Senator Amy Klobuchar, speaking to the media over the weekend, said "“Now you see Europe is using it and has a much less lower incidence of credit card fraud, in fact in America we are 25 percent of credit card transactions in the world but we are 50 percent of the fraud. And that is just a ridiculous situation. It is clear we have to go to this new type of technology.”
Target, for one, has finally decided to accelerate the rollout of 'chip and pin' style credit card machines that are the norm in Europe and Canada, but this is only one element of the security problem they face. While many online-only retailers are extremely careful about the security of their user's information while the transactions are taking place, security standards often slip once the data has been stored somewhere on company servers - or, increasingly, being handed off to a third-party payment processor who has more limited accountability to the consumer. Visa and Mastercard have given retailers until 2015 to upgrade their systems, but US retailers spend as little as 2% of their tech budgets for online security, a number which is remarkably small considering the huge negative potential of data breaches. As consumer backlash grows against repeated failures in this arena, expect retailers to smarten up and focus on beefing up security both on and offline.
Posted on February 07th 2014 at 08:37pm by James
Tuesday 04th February 2014 UK Retail Upswing Here to Stay
After experiencing one of the most successful holiday sales seasons since 2004, UK retailers were projected to experience a bit of a slump in sales numbers for January, prompting some industry analysts to wonder if the holiday upswing in revenue was a temporary situation. However, thanks to the most recent projection from the National Institute of Economic and Social Research, the boon for retailers isn't going to be disappearing any time soon.
The report, entitled 'Prospects for the UK Economy', the Institute revised its expectations for 2014 growth in the UK upwards by a considerable margin to 2.5%, up from the original forecast of 2%. Over the course of 2013, the UK economy's growth was the most robust since the start of the global financial crisis in 2008, sitting at 1.9%. Thanks to the latest predictions, it appears that the recovery is gaining steam and will be here to stay, which should assuage the fears of retailers who have had a hard go over the last decade, with high street prices staying within the reach of most consumers.
Consumer confidence has been relatively shaky ever since the financial meltdown of 6 years ago, but according to the NIESR, consumer spending is set to grow as much as 3.4% over the course of 2014, which would be the quickest increase in over a decade. Unemployment rates also dropped dramatically towards the end of 2013, in large part thanks to the strong labour market. Predictions from the International Monetary Fund (IMF) for the 2014 UK economy mirror the NIESR forecasts, predicting a GDP growth rate only a touch more conservative at 2.4%, after a previous estimate of 1.9%.
No matter who you ask, the outlook is quite positive for the future, which should help further increase consumer confidence, with the rapid growth of the online shopping market for UK-based companies helping to drive a large portion of growth. UK online retail exports are leading the Western world, and while the new economic blocs of Brazil, Russia, India and China are showing dramatic expansion rates as well, as more and more retailers join the online market with successful offerings, the UK should be able to maintain its competitive advantage in the online market. The UK manufacturing market has also shown dramatic growth in the NIESR report, which should further boost the ability of UK online retail to compete in the global marketplace.
Posted on February 04th 2014 at 08:34pm by Ade
Friday 31st January 2014 Globally Localise Your E-Commerce Strategy
As e-commerce trade numbers continue to grow steadily in the West, if you're looking for truly enormous market gains, it's time to look beyond the traditional Western markets of North America and Europe. We've discussed the newest emerging economic bloc, known as BRIC (Brazil, Russia, India and China), all of which are experiencing incredible growth in their online markets, and are worth expanding into if you're looking to take your e-commerce business to the next level. Unfortunately, deploying your current English-language site worldwide and expecting great sales is a bit unrealistic, but with a bit of careful consideration it's possible to dive into these markets.
Localising your site depending on the country of access is one of the most important elements for globalising your business. While language translation can seem like a heavy initial investment, with a carefully designed website it's possible to deploy fairly easily - and if you focus on these initial markets, you can be fairly certain of a high degree of success. Site language alone isn't all it will take, however. Most successful online retailers have, by this point, implemented some sort of user-generated content system, whether it comes in the form of reviews, comments, or some form of social media integration. Having this content localized as well will go a long way towards instilling confidence in your global consumers, as well as strengthening your overall brand worldwide.
Localisation of any mobile apps you're developing is also a key factor in reaching global markets, as many of the potential consumers in these emerging markets, as half of the people in the world with mobile phones use them as their primary internet source, an aspect that becomes especially apparent in developing nations. Mobile commerce is often far more popular in these markets than it is in North America and Europe.
Finally, take the time to coordinate localised online shopping sales for each of your chosen markets. Black Friday and Cyber Monday are sweeping through the West after dramatic successes in North America, but very few retailers are aware of China's equivalent to Cyber Monday, which is known as 'Single's Day'. The single biggest online shopping day in the entire world, revenues on Single's Day in 2013 totalled upwards of $5.7 billion USD - and that's only a single country. So while it may seem like an expensive initial investment to translate websites and marketing materials into other languages, the potential for expanding the bottom line is so tantalizing that any business looking to maintain a competitive advantage should explore the possibilities of these new markets.
Posted on January 31st 2014 at 06:00pm by Ade
Tuesday 28th January 2014 Paypal Touts New In-Store Purchase Option
One of the biggest trends to watch in the upcoming 2014 retail year is, unsurprisingly, going to involve mobile devices - but instead of simply focusing on mobile commerce and shopping habits, the cutting edge focus this year is going to be on the integration of online, mobile, and in-store retail elements. The latest buzzword is 'omnichannel', typically used in 'omnichannel consistency', in other words ensuring that customers get a consistent experience no matter how they choose to interact with your brand. Interestingly, retailers aren't the only ones hoping to capitalise on the omnichannel buzz, as the new wave of mobile payment processors are getting in on the omnichannel retail action.
There are any number of mobile payment options available at the moment, for both retailers and consumers, with the advent of payment processors that plug into any mobile smartphone, such as Square and Stripe. Paypal has been working on a similar project, but decided to up the ante at the end of 2013 by debuting a service that skips card swipes altogether. Dubbed 'Beacon', the service will allow customers to use their Paypal accounts to purchase products in brick and mortar stores - completely hands-free. Square has operated a similar service using GPS and Wi-Fi, but there are growing concerns about battery consumption in these situations. Instead, Beacon uses a new generation of Bluetooth known as Bluetooth Low Energy, which allows mobile devices to communicate at close range with very little energy used.
Customers who have installed the Paypal mobile app and opted into the hands-free payment solution via that app will be instantly alerted by either sound or vibration as soon as they walk into a store that's using Beacon point of sale technology. Best of all, it works in tandem with many common point of sale systems that retailers have already implemented, making the integration and launch process virtually painless for retailers and customers alike. Paypal is hoping to roll the service out fully in 2014 across North America.
Interestingly, Apple also recently debuted a Bluetooth-based in-store service called iBeacon that could be extended to offer similar functionality, although Apple has been typically close-mouthed about its unreleased plans. The current rollout of iBeacon is limited to iOS devices used within the Apple store, and is only used for delivering product information, which may give Paypal's Beacon service a decided initial advantage.
Posted on January 28th 2014 at 05:00pm by James
Friday 24th January 2014 Chinese E-Commerce Laws Tightening
Among the alphabet soup of acronyms that float around the web, both in the e-commerce world and out of it, it can be difficult to keep track of every single one, but there is one that will be especially familiar to retailers from both the online and offline worlds: the BRIC economic block. Brazil, Russia, India and China (BRIC) are among the most expansively growing retail markets in the world, and are becoming increasingly prominent in the world of online retail. China especially has been a powerhouse of late, seeming to take on the role as manufacturers for a great deal of the goods being sold around the world. At the same time, the direct e-commerce side of things in China has also grown by leaps and abouts, both in business-to-business and business-to-consumer trade.
Unfortunately, as a result of this rapid expansion, the laws that regulate many Chinese companies have failed to keep up with the realities of the market, and by extension there has been some trepidation among other retailers around the world about doing business with the mainland Chinese market. In order to counterbalance this potentially damaging caution, the Chinese government has finally stepped in to enact several laws that will take effect in mid-March 2014, in time to prepare for Q2 sales.
Among the most notable changes are attempts to crack down on counterfeit merchandise which has plagued both Chinese and global retailers alike. Consumers will be able to return standard purchased goods without having to provide a particular reason for seven days after purchase, as long as the goods are in proper saleable condition. Retailers are also being forced to provide physical contact details such as an address and phone number, and if the retailer is operating through a larger online platform such as AliBaba or its rival JD.com, and the platform is unable to provide such information, the platform itself will be held responsible for any compensation sought by the customer.
These new rules, assuming they are properly enforced, will go a long way towards instilling confidence among foreign companies concerning operating in China, which should in turn ensure that Chinese e-commerce continues to expand at the staggeringly rapid pace it has been maintaining for the last 3 years. In 2010, online B2C retail sales in China totalled less than $10billion USD, but by 2013, it had reached approximately $100 billion USD, and is projected to total $150 billion USD for 2014.
Posted on January 24th 2014 at 09:08pm by James
Wednesday 22nd January 2014 Twitter Wading into E-commerce Payments?
While the social networking is undoubtedly the hottest new area for online retailers to leverage, over the last couple of years there have been some fairly dramatic shifts in the popularity of the individual platforms. Facebook has had its foundations shaken by revelations about its declining popularity among the youngest user demographics, and Twitter has gradually taken over the limelight as the most popularly discussed social networking app. It should come as no surprise then, to learn that the rumour mill surrounding Twitter's ability to capitalise on its user base is active once more.
According to an exclusive report published by retail trend spotter site Recode, Twitter is in the process of finalising a deal that will allow consumers to actually use Tweets to make purchases directly from retailers. By teaming up with a new mobile payment processor startup named Stripe, Twitter hopes to shoulder its way into the online shopping market. Facebook has already begun to experiment with mobile payment processing solutions in partnership with Paypal, as we discussed here in previous posts in late 2013, but they are still only in very early prototype phases. If Twitter can close this deal quickly and partner with a healthy set of retailers eager to capitalise on Twitter's extensive user base, they may very well be able to leap into the e-commerce market well ahead of the competition and seal their place.
While neither Stripe nor Twitter is willing to confirm the deal, Twitter is no stranger to mobile payment solutions, according to other internal sources, having experimented with - and then shut down - various attempts at mobile payment handling in the past, including a "tweet to send money" system that would have been a direct rival to industry leader Paypal. That being said, the company still seems to be in the market for a solution, as roughly a year ago they partnered with American Express for a pilot project that allowed AmEx cardholders with Twitter accounts to buy from a range of pre-selected products simply using tweets, provided their Twitter account was linked to their AmEx card. They've also experimented with a joint project with Starbucks involving linked Twitter accounts and Starbucks gift cards, although neither of these projects was a particularly rousing success.
If Stripe and Twitter come to a deal, we could be looking at the next wave of completely integrated social networking payment processors, which could very well change the way e-commerce operates in every sector around the world.
Posted on January 22nd 2014 at 08:36pm by Ade
Friday 17th January 2014 UK the Global Leader in E-commerce Trade Exports
In what may be surprising to many casual observers of the e-commerce industry, the world leader of online retail export isn't the United States or China, but rather the United Kingdom. According to the latest retail report from OC&C Strategy Consultants, titled 'The Global Retail E-mpire Report', online retail exports from UK-based retailers boasted a surplus of over $1 billion in 2013, far in excess of the distant second and third place finishers, the United States and Germany, respectively. The US-based online trade surplus totalled only $180 million, and Germany lagged far behind with a $34 million surplus.
The report goes so far as to predict that the six largest online markets - the United States, the United Kingdom, France, Germany, the Netherlands and Scandinavia - will experience massive growth over the course of the next 7 years, possibly reaching as high as $130 billion dollars by 2020. While online trade between these groups totalled $25 billion in 2013, at the current rate of expansion it's not a leap to imagine that these markets will continue to boast incredible growth numbers. In total, online sales from outside the UK totalled in excess of $6.5 billion in 2012, to give a sense of perspective.
Interestingly, there seems to be a rapidly growing demand specifically for products from UK-based retailers and brands from customers outside the UK, despite a sudden increase in expatriate populations or general UK cultural diaspora. The number of searches for UK-based brands from global markets has grown by an average rate of 46% each year since 2010, with no signs of stopping in sight.
There is also quite a disparity between the size of company that is receiving the out-of-UK purchases. For small to mid-sized companies, nearly half of all purchases currently come from global markets, whereas companies that gross over $400 million only have approximately 13% of their purchases from non-UK markets.
There are a number of speculations about what has given rise to these arguably surprising statistics, and many retail analysts are quick to point to several UK-based e-commerce retailers who have stood head and shoulders above the rest of their competitors, such as online fashion houses ASOS and Net-A-Porter. It may be too early to speculate with the confidence that these early leaders will continue to drive the UK online retail industry to continual leadership, as other global retailers will soon be zeroing in on the game, but if they're careful about competitor tracking, they should be able to stay ahead of the curve for many years to come.
Posted on January 17th 2014 at 07:06pm by James
Tuesday 14th January 2014 eBay Battles Back Against Amazon
Amazon has been capturing a lot of headlines recently, and many of them have had to do with logistics: new fulfilment centres, Sunday deliveries, an 'anticipatory shipping' patent, and the tantalizingly silly 'drone delivery' story that some around the web have claimed was actually more a clever piece of viral marketing than a reality, as it was so conveniently timed just before Black Friday and Cyber Monday. One of the other original online retail behemoths has been noticeably quiet, lately - eBay, the brainchild of superstar entrepreneur Elon Musk. Paypal, which is a sibling of eBay, has been making some headlines, but eBay has mostly just been staying the course.
Early in January, eBay made an announcement that shed some light on a couple of acquisitions from the previous year, notably the open source e-commerce platform Magento, which is one of the most widely used e-commerce content management/shopping cart systems. eBay unveiled a new service they have dubbed (perhaps a bit boringly) 'eBay Enterprise Ship-from-Store', which will allow retailers to use eBay and Magento to list their inventory online, but integrate their brick and mortar inventories. Additionally, customers will have the option to pick up their e-commerce purchases in-store to save on shipping costs and time.
As eBay said in their release, "Effective omnichannel capabilities significantly boost sales, enhance the consumer experience and improve customer retention rates. With 77% of consumers expecting retailers to provide a consistent, integrated experience between their in-store and online channels, ship-from-store and in-store pickup will empower retailers to continue to compete in an omnichannel landscape and meet their customers' evolving needs."
Intended as a means of counterbalancing Amazon's sudden and rather dramatic purchases of warehouse space all across North America, eBay hopes to attract a number of mid-size retailers who together can outweigh the impact of the retail juggernaut that Amazon has become.
All of this back and forth between these two retail giants only serves to highlight a couple of things that are likely to be the hallmarks of the 2014 retail year. Primarily, the sort of logistics issues that we saw over the course of the holiday season will have to become a thing of the past, and secondly, we're going to see a great deal more focus on omni-channel integration as the walls between the digital world and the brick and mortar world begin to blur, becoming more and more irrelevant.
Posted on January 14th 2014 at 07:50pm by Ade
Friday 10th January 2014 UK Retailers Enjoyed Holiday Boom
As the retail world picks up the wrapping paper and packing peanuts and the rest of us begin to take down holiday decorations, data and analysis has begun to trickle in concerning the sales numbers and takeaways from the holiday shopping blitz. 2013 had been something of a mixed back for retailers in the UK, full of ups and downs, but the holiday season provided a strong finish for almost every company that was polled. Retail sales across all industries were up by 6.1% compared to December 2012, and the average amount spent was up by 7.2%, which far exceeded even the most optimistic forecasts by economists.
This is good news for the UK economy overall, as Alex Hamilton of Planet Retail explained, “The sharpest annual rise in retail sales for almost a decade provides further evidence to suggest that the UK economy is on a sustainable growth path.” This should be reassuring to retailers who spent much of 2013 wondering whether or not they had finally begun to move out of the economic shellshock that resulted from the world-wide global economic fallout in 2008.
However, as numbers for January also begin to roll in, it seems like some of the more skeptical analysts may have been closer to the mark. “This is too sizeable an increase to think that it won’t be at least partially reversed in next month’s report,” said George Buckley, from Deutsche Bank, in reference to the surging sales numbers from December.
The CBI Distributive Trade survey balance, a metric of retail sales used across the UK, has been sitting around 14 so far in January, despite forecasts by economists that were in the mid-20s. To give the comparison some context, the excellent December enjoyed by retailers had reached a rating of 34 on the survey balance. Barry Williams, chair of the CBI Distributive Trades Survey Panel, further explained, "While retailers predict some modest growth ahead, the prospect of continually slow pay growth is likely to mean cautious consumers for some time to come."
Regardless of these more cautious explanations, the fact that the holiday sales seasons are reaching record levels means that consumers are beginning to move on from the darker times of the previous few years.
Posted on January 10th 2014 at 08:19pm by James