Each year, InternetRetailing examines, investigates and analyses the performance of retailers in the UK to discover which are the Elite, Leading and Top500. Emma Herrod reports on the findings of the PFS-sponsored IRUK Top500 2017.
for the third year, InternetRetailing’s research team has looked in depth at the UK’s leading ecommerce and cross-channel retailers, comparing and contrasting the capabilities of these top-flight traders to see where and how the best retailers excel. They’ve taken an analytical approach that ranges across six Performance Dimensions rather than being confined to a pure ranking of companies by ecommerce revenues, web traffic, store estate or other single metric. These metrics do, of course, give an idea of each retailers’ ‘heft’ and form a preliminary ranking which is then modified and weighted as the six Performance Dimensions are considered.
These six Performance Dimensions also highlight how and where individual retailers excel, what best practice looks like in different areas of retail and what forms the industry ‘standard’. The Performance Dimensions are:
- Strategy and Innovation: the extent to which the retailer is adapting for growth, international commerce and customer responsiveness;
- The Customer: measuring the experience from the customer’s point of view;
- Operations and Logistics: delivery, returns and collections;
- Merchandising: selling online;
- Brand Engagement: making their brands familiar to the customer, and connecting;
- Mobile and Cross-channel: beyond single ecommerce or store channels.
The Performance Dimensions combine into what InternetRetailing calls ‘RetailCraft’ and constitutes a striving for excellence, at scale, that’s responsive to the customer.
WHO ARE THE ELITE IN 2017?
At the top of the industry are the ‘Elite’ retailers, those which have performed at an exceptional level across all dimensions, statistically separate from the subsequent clusters. In 2016, this grouping was made up of Amazon [IRDX RAMZ], Argos [IRDX RARG], Boots [IRDX RBOO], House of Fraser [IRDX RHOF], John Lewis [IRDX RJLW] Mothercare [IRDX RMOC] and Screwfix [IRDX RSCR].
Then come the retailers classified as ‘Leading’, those companies which by most measures are out in front, and combine both size and capability. ‘Top50’ retailers bring the ranking to the 50 retailer point and represent the current state of RetailCraft in the UK. Taken as a group the strength and capability of the UK industry can be seen in this cohort.
But how did these retailers perform in the 2017 ranking? Are the ‘Elite’ retailers still heading up the ranking and how did 2016’s unpredictable trading year impact on their performance across the six dimensions?
ACROSS THE DIMENSIONS
Amongst the retailers performing strongly in the Strategy & Innovation Dimension are Mamas & Papas, The Fragrance Shop and White Stuff as well as 2016’s Elite ranking retailers Amazon, Boots, House of Fraser, John Lewis, Mothercare and Screwfix. This dimension includes a range of metrics from customer service response time, flexible order fulfilment and search visibility.
Strong performers amongst The Customer dimension were Chain Reaction Cycles, Joules and Nisbets. They all punched well above the weight expected of retailers of their heft. Customer service, homepage performance and social interaction all add in to how these retailers were providing shoppers with the best experience across channels, both as a website user and through customer service.
The third dimension is Operations & Logistics and highlights how retailers are handling delivery, collections and returns and how they are bringing convenient fulfilment methods and delivery choice to their customers. Agent Provocateur, Moss Bros and Wiggle all performed well in this dimension, ranking alongside Elite retailers including Amazon and John Lewis.
The Merchandising Dimension brought up many surprises for InternetRetailing’s research team this year with many retailers outdoing their footprint ranking considerably, and thus moving others down the ranks to make way for them. The research Knowledge Partners, who aid in measuring the metrics within each dimension, looked at how retailers are merchandising their sites from a customer perspective as well as analysing their selling and promotional strategies and how they use notifications and personalisation on mobile apps. Amongst those showing the big guys how to do it were Cycle Surgery, Getthelabel.com, Moss Bros and Thompson and Morgan.
Brand Engagement and the importance of being recognised by shoppers forms the fifth dimension. Keywords, share of search compared to other retailers, visibility, social media presence, email, and the level of ‘noise’ around a brand are all taken into account. “To do well you have to be known, and to be known you have to do well,” says InternetRetailing researcher Polina Modenova.
As well as the retailers whose names you would expect to see in this ranking, such as Amazon, were smaller companies including Everything5pounds.com, Myprotein and Victoria’s Secret.
The final Performance Dimension is Mobile, the channel with the most growth and increasing traffic. Mobile web and apps were all analysed by the researchers and Knowledge Partners to assess the retail rankings. The performance of the mobile web home page through to the usability and functionality of apps were assessed alongside weighting features according to their impact on AOV.
Mobile is not a channel alone though, being an enabler and glue for cross-channel retailing. This dimension takes into account how retailers are putting mobile at the heart of their cross-channel offering, integrating it into all parts of their activity, from the store to online. Names to highlight in this area include Dorothy Perkins and Topshop.
So, those are some of the movers, shakers and surprises across the individual dimensions but being ahead of the industry in one area does not turn a retailer into an Elite one. Outstanding performance consistently across every Performance Dimension is needed for that honour.
Which retailers then combine a large footprint in the UK and heft of ecommerce sales with a second-to-none customer experience across all channels in which they operate, have seamless and fluid operations and logistics, jaw-dropping merchandising skills, connect with customers across the full marketing metrics, are master of mobile and still able to be flexible and adapt for growth? Who are this year’s Elite and Leading retailers and where does your company sit in the rankings?