Chloe Rigby highlights recent industry changes
Notonthehighstreet.com [IRDX RNOT] plans to focus on the customer experience by bringing innovative technologies such as Apple Pay to its website and holding more offline events, after raising investment of £21m.
The marketplace for creative small businesses plans to use the funding, which comes in a round led by magazine and digital publisher Hubert Burda Media, as it expands categories and builds its position in the gifting market. Gifts are an important part of Notonthehighstreet’s sales – and experiential gifts are the fastest growing category within that. The company will invest in marketing and brand partnerships to grow its position, while working with partners to bring innovative products to the site.
One use of technology will be to bring Apple Pay to the Notonthehighstreet.com website. The company already uses the payment method on its Gift Finder app, and says it has helped boost sales conversion by 200%, compared to traditional credit card checkouts.
The marketplace plans more “physical manifestations of the online marketplace,” following on from its Open Door event. Its next offline event is scheduled for Stylist Live in October.
“Notonthehighstreet.com was born out of the belief that customers want products that are more thoughtful, unique and personal and that, through technology, we could connect thousands of independent businesses – the makers of these great products – with customers around the world,” said Notonthehighstreet.com Chief Executive Simon Belsham.
Notonthehighstreet.com will also use the funding to invest in the technology and operations that enable its 5,000 sellers to use its platform. Its Pitch Up programme enables start-ups to present their products to the marketplace, while it is also working with the University of the Arts to encourage art students to design products.
Tesco [IRDX RTSC] has upped its delivery offer with the introduction of same-day click and collect. The UK’s largest supermarket now offers collection after 4pm for orders placed before 1pm Monday to Saturday, excluding bank holidays, at 261 Tesco stores and 36 locations outside the store.
The extension to Tesco’s click and collect service brings its service into line with competitors including Asda and enables it to compete with the convenience of Amazon Fresh. Asda offers same-day collection from 250 stores and Sainsbury’s is currently trialling the service.
Amazon Fresh does not offer collection but offers delivery as quickly as an hour in the limited Greater London area where it is available.
Meanwhile, Asda’s new management team will continue to focus on the customer offer, both online and off, after like-for-like sales fell by 7.5% compared to the same time last year in the second quarter of the year. The supermarket, a Top50 retailer in the IRUK Top500 research, will continue to focus on improving retail basics through its Project Renewal transformation plan. That will include strengthening the customer offer online and offline by lowering prices and boosting quality, said its parent company Walmart.
Morrisons has struck a new deal with Ocado that will help the grocer expand its online retail business to cover the whole of the UK at significantly reduced costs over its existing deal. The move, which sees Morrisons, a Top100 retailer in the IRUK Top500 research, take capacity in Ocado’s state-of-the-art new warehouse in Erith in Kent, will allow for a million more shoppers to use Morrisons.com for shopping.
Meanwhile, Ocado is to develop a store pick solution for Morrisons.com, which will lift prior restrictions on using Morrisons own stores to fulfil online orders.
Once this deal comes online, Morrisons old contract – which saw the retailer obliged to share a proportion of its future online profits with Ocado – will end.
Omnichannel boosts Screwfix
Enabling customers to buy when and how they want continues to boost business at Screwfix [IRDX RSCR], which has posted second quarter sales up by 24.5%, compared to the same period last year.
The DIY and trade tools business saw like-for-like sales grow by 13.3% in the quarter to July 31. According to parent company Kingfisher, growth, was “driven by its leading omnichannel capability” as well as new branches and wider product ranges. Screwfix, an Elite retailer in the IRUK Top500 research, led the way in introducing multichannel shopping to the trade supplies industry, introducing a standout click and collect service that enables customers to pick up as soon as five minutes after placing an order, while next-day delivery is free for orders over £50. Quickshop and catalogue apps enable easy shopping via mobile. The approach has reaped rewards and Kingfisher is now taking the Screwfix business and model to other markets, including Germany.
At Screwfix’ sister company B&Q, a Leading retailer in IRUK research, sales rose by 0.3% at a time when the retailer was closing stores. Like-for-like sales, which strip out the effect of both closures and openings, rose by 5.6%. Kingfisher said closures had resulted in nearby stores benefiting to the tune of around 2%, overall, in like-for-like sales growth.
Overall, Kingfisher’s group sales rose by 8.4% to £3bn, with like-for-like sales up by 3% once currency fluctuations were discounted. UK sales of £1.4bn were up by 0.5%, with like-for-like sales up by 5.6% in constant currency.
The update comes as Kingfisher brings all of its systems and processes together into a single group-wide approach to joined-up retailing. Chief Executive Véronique Laury said: “We continue to focus on our One Kingfisher plan, based on always putting customer needs first.”
Game Continues digital-first strategy
Game Digital [IRDX RGME] has said that multichannel and digital were strategic priorities as it continues to move from being a business that predominantly sells products to one that sells products and services.
At the same time, said the gaming retailer, a Top100 retailer in IRUK Top500 research, it is developing its new business activities, including e-sports and competitive gaming, events and digital services. It is trialling e-sports and competitive gaming activities in UK stores and local communities. In July it opened its first in-store gaming zone.
Martyn Gibbs, Chief Executive of Game Digital, said: “We continue to focus our efforts on maximising the potential of our core retail markets; driving operational improvements and efficiencies across the business; and developing our broader consumer and enterprise gaming services to support deeper engagement with our customers, communities and supplier partners.
“Next year will see several significant industry developments, with new console launches, the arrival of new ground-breaking virtual reality devices, as well as continued strong growth in competitive and social gaming.
“We are well positioned to benefit from these exciting developments and have clear plans in place to drive our retail businesses forward whilst developing our strategic initiatives to support future growth.”
The update came as the retailer unveiled falling sales, with gross transaction value (GTV) of £914.1m down by 5%, or £48.3m, across the group in the year to July 23 compared to the previous year. In the UK alone, GTV was down by 10.8%, and in Spain it was up by 12.4%, calculated in sterling. Store numbers fell to 580, from 592 a year ago. Game in the UK ended the year with 313 stores, down from 319 last year.
Digital content GTV grew by 15.5%, while sales of preowned technology products (+65.1%) and accessories and toys-to-life technology (+19%) also up.
Amazon to open 13th UK warehouse
Amazon [IRDX RAMZ] is opening its 13th UK fulfilment centre as it expands its network to meet customer demand. The new centre, at Tilbury, Essex, will feature robotic technology that has been shown to speed up the time it takes to process an order while cutting the amount of space needed for storage.
That’s important when Amazon, an Elite retailer in the IRUK Top500 research, is widening its product range from more than 150m lines. At the same time its third-party Fulfilment by Amazon service is being taken up by more marketplace sellers, and expansion will also provide more space for that.
“We are excited to announce that we will be opening our 13th fulfilment centre in the UK in Tilbury in spring 2017 to enable us to continue to expand our product selection, support more third party sellers including small businesses with our fulfilment expertise and meet growing customer demand in the UK,” said John Tagawa, Amazon’s Vice President of UK operations.
He said the use of Amazon Robotics technology was “the newest example of our commitment to invention in logistics on behalf of our employees and our customers”. The robots slide under a tower of product storage shelves to lift it through the fulfilment centre. Amazon says the robots help speed order processing time and reduce walking time by moving the shelves to employees, reducing the time taken to store inventory or pick it for new customer orders. They also save significant amounts of space: Amazon says 50% more items can be stored per square foot.
The new centre will have more than 1,500 staff when it opens in 2017, adding to a payroll that by the end of this year will include more than 15,500 people. The announcement comes shortly after news of a Doncaster centre, employing 500 people, that will also open next year.
We’re witnessing an Amazonian mission to speed everything up. This additional fulfilment centre is in line with Jeff Bezos’s obsession with bringing product physically closer to the consumer.
Battle of the beds
In a bid to shake up the ‘stagnant’ mattress market by injecting some online nous, Innocent Smoothie founder Richard Reed is joining forces with leading investors and a family of bed makers to launch Simba.
Aiming to gain the lion’s share of the £1bn UK mattress market, Simba is looking to offer a one-size-fits-all mattress that can be ordered online and delivered next day in a box to make the process of buying and getting home one of life’s most essential, but oft-overlooked, purchases.
Simba was co-founded by James Cox, Steve Reid, Founder of Tribesports.com and mattress veterans, the McClements family who have been a major mattress supplier to John Lewis for decades.
James Cox explains: “People spend a third of their lives in bed; sleeping, chatting, reading, watching TV, ‘dancing in the sheets’, planning and laughing. That’s a lot of life lived out on their faithful mattress. But, traditionally, making a mattress purchase is expensive and confusing for the buyer. We wanted to create a product that addressed an issue and made people’s lives that bit better, in terms of comfort and convenience.”
Simba’s pioneering online ‘bed in a box’ concept, he believes, allows your mattress – ingeniously rolled up and boxed – to be delivered to your door the next day. No more awkward manoeuvres in the hallway. Simba is so confident in their product that they are also offering a 100-night no hassle return service.
Mentioned in this piece…
Holly Tucker and Sophie Cornish founded notonthehighstreet.com in 2006 with the the founding ideal to hunt out the most original items from the best creative small businesses, and bring them together in one place, making it easy for people to browse and buy. (more…)