THE MULTICHANNEL RETAIL landscape is more complex than merely ‘having a website’ or ‘operating a store’. In choosing which companies to include in the IRUK Top500 2017, we have considered companies’ intent, capabilities and activities around the recruitment and monetisation of customers. The definition for inclusion in our research is:
Destination: the retailer has created a destination that, in the minds of customers, is a source of product, service or experience. Whether this is a shop, a site, a place, a time or an event, it’s the sense of ‘locus’ that counts.
Purpose: the retailer has created goods and/or services for the purpose of selling, for consumption by the purchasing consumer.
Merchandising: the retailer actively sells and is not just a portal for taking customers’ money. This means the selection, promotion and tailoring of retail offers for customers.
Acquisition: the retailer actively markets, recruits and attracts customers with a promise or proposition to the destination.
Sale: the retailer takes the customer’s money. The retailer owns the transaction as the merchant of record.
Recourse: the retailer is responsible for the service, fulfilment and customer satisfaction owing from the sale.
Exception: in every good list there’s an exception, where we may include businesses within IRDX (our dynamic list of multichannel and ecommerce companies, suppliers and key personnel) because of their influence upon retailers and retailers’ customers. However, these companies will not be ranked within the IRUK 500 2017.
Companies excluded from the IRUK 500 2017
Marketplaces: where a candidate retailer is simply a marketplace, the company is not featured. Where a marketplace undertakes customer acquisition, manages payment, customises offers and recommendations and offers recourse on purchases, then the company will be eligible for inclusion.
Pure transaction/tariffs: where ecommerce is ancillary to the primary purpose of a business, we will not necessarily include them. Online payment for gas or electricity is excluded since the business’ purpose is ‘energy supply’. Likewise the Post Office’s postal revenues are excluded, whereas the company’s retail store activities are within scope.
Business-to-business and direct-selling brands: while the scope of retail is normally direct to consumer, two trends are challenging this: the move for brands and previously solely B2B businesses to sell direct to consumers; and the increasingly retail-like behaviour of B2B brands, in terms of acquisition, promotion, personalisation and service. We have therefore included certain B2B businesses and direct-selling brands. look at the InternetRetailing Brand Index 2017, for a summary of the comprehensive retail analysis of direct-selling brands in Europe.
The elements included in each Dimension are summarised below:
0. Footprint Dimension
- 0.1 UK retail turnover, ranging from £2m to £43bn – average £629m
- 0.2 The ecommerce subset of the above, ranging from £500,000 to £6.1bn – average £75m
- 0.3 UK web traffic, ranging from 350,000 to 15.8bn page views per annum – average 126m views per annum
- 0.4 Number of UK stores, ranging from 0 to 11,500 – average 131 stores
1. Strategy & Innovation
- 1.1 Strategic practice, including an expert-designated selection of metrics that catalogue a retailer’s embrace of technological or organisational best practice
- 1.2 Innovative practice, including a selection of metrics from other Dimensions that, to date, are only used by the leaders
2. The Customer
- 2.1 Desktop and mobile homepage performance, including engineering and responsiveness – speed index, time to first byte, time to visual completion, use of third-party tags, etc
- 2.2 Customer service response time and helpfulness – Facebook, email and phone
- 2.3 Number of socially active customers and their interaction levels
- 2.4 Website navigation – the ease of finding a desired product, including tabs, icons, search and filtering
- 2.5 Customer feedback – incorporation of customer reviews and product ratings on the product display page
- 2.6 Mobile app – incorporation of customer reviews and product ratings [retailers with mobile apps]
3. Operations & Logistics
- 3.1 Delivery, including 10 metrics covering the range of options, and competitiveness of timeframes and pricing
- 3.2 Returns, including 10 metrics covering the ease of the returns and refund process to the customer, and the range of options, including return to store
- 3.3 Collection – a summary of collection points offered by retailers, including own stores, transport location, lockers, and third-party stores
- 3.4 Mobile app – stock check features [retailers with mobile apps]
- 4.1 Customer-perspective website review, including 23 metrics covering design, navigation, the relevance of search results, product information and visual appeal
- 4.2 Mobile app assessment, including nine metrics covering use of notifications, product display, and personalisation [retailers with mobile apps]
- 4.3 Merchandising and product review, including number and depth of promotions, the fraction of a retailer’s range with reviews and descriptions, the number of images per product, and the fraction of range that is out of stock [largest IRUK retailers]
5. Brand Engagement
- 5.1 Search assessment including total applicable keywords, total reach, share of search compared to other retailers, and relative visibility in search results
- 5.2 Social media presence and availability, including 22 metrics, taking into account size of audience and interaction with it on Twitter, the net change over three months, and use of 10 social networks, email, and blog
- 5.3 Facebook assessment, including 13 metrics, covering the total number of people talking about the brand, the frequency of posts, and interaction with recent posts
- 5.4 Website review – assessing the integration of social media, sharing, and social validation
- 5.5 Mobile app – assessing the incorporation of social media, sharing, and social validation [retailers with mobile apps]
- 5.6 Email assessment, tracking hundreds of thousands of emails to panellists, assessing content, volume and interaction – open rate, delete rate, etc [largest IRUK retailers]
6. Mobile & Cross-channel
- 6.1 Mobile home page performance, including engineering and responsiveness – speed index, time to first byte, time to visual completion, etc
- 6.2 Mobile app, including 24 metrics, measuring the usability and functionality of apps and weighting features according to their impact on average order value (AOV), time spent on app, and conversion rate
- 6.3 Cross-channel, taking into account use of physical store estate for order fulfilment and return, store information on the website, in-store functions of apps, and cross-channel loyalty accounts [retailers with UK stores]