The InternetRetailing Conference is always a time of activity and at the ninth annual event we revealed our inaugural UK Top500 retailer report. Ian Jindal reflects upon this new index and its value to our industry.
No-one wants a new ‘Top’ list for its own sake, and since we’re all busy the addition of a further title vying for attention is not always a source of joy. Why then have we dedicated months of work to this? The main reason is – on the research front – there’s an appetite to understand one’s own performance in the context of the market as a whole, and fit ourselves for future challenges.
Our approach has been to create an in-depth, commercial and comparative view of the UK’s multichannel retailers and ecommerce players. Our guiding principle in undertaking this work has been to reflect the capabilities necessary to run complex retail operations at scale – a focus upon ‘RetailCraft’.
We offer our results in the full knowledge that we are not the professionals running multichannel businesses – with millions in terms of turnover, customers, SKUs, key words, merchandising algorithms and interactions across all channels. It is in tribute to these efforts that we have assessed several Performance Dimensions rather than taking a single measure (be it revenues or web traffic).
Our research covered seven Performance Dimensions:
0 Footprint – Released in March 2014 this considers the ‘heft’ of a retailer – turnover, ecommerce penetration, web reach and store estate (all measures for the UK only);
1 Strategy and Innovation – for the 2014 research we’ve focused on how retailers extend their channel reach;
2 Customer – the experience provided to the customer;
3 Operations and Logistics – delivery, returns, click and collect;
4 Merchandising – the approaches to selling online;
5 Brand and Engagement – the interaction with the customer;
6 Mobile and Cross-channel – moving beyond single channels (whether bricks or clicks).
With hundreds of data points over the seven Performance Dimensions and 19 subdimensions, we’ve normalised and assessed the distribution of the results, applying statistical clustering methods to determine performance groups.
These are the basis of our ranking.
We eschewed a straight ‘first, second, third’ sequential ranking approach since – in a seven-dimension scoring system – it’s possible to have a number of retailers scoring at a similar level, yet in different ways. Our index rewards balanced capability and so we’ve elected to cluster the results.
The IRUK Top500 2014 is ranked as below:
Elite – these retailers have performed exceptionally in all dimensions, statistically separate from the following groups. We have five in this group: these are the companies we’re happy to call the best of the best – our Top Retailers for 2014.
Leading – 13 companies who are by most measures out in front, and in this group we have a combination of size and capability.
Model – this group is what we would call ‘state of RetailCraft’ in the UK.
We released the Top500 exclusively to Delegates at our Conference and we’ll be distributing it to Magazine Subscribers with our January edition (quick note: if this is not your copy of IR Magazine you have a couple of weeks to get on our list to secure your own copy!). You can see our presentation of the Top500 at our Conference in this video: http://etail.li/1d4f8.
Robin Phillips, Multichannel Director at Boots UK and one of our advisory board, was kind enough to call our Top500 “the most comprehensive and authoritative measurement of omnichannel capability in the retailing world”. We’re pleased, but we’re already working on the next steps!
Our data-gathering and analysis continues apace and we’ll be sharing the in-depth performance of retailers every other month via the six Performance Dimension Reports. These will be distributed with the print Magazine.
In Spring 2015, we will unveil the European Top500 footprint, and in July, the ‘Top suppliers to the Top500’. We are all ears if you have suggestions for further research, questions you’d like answered or would like to contribute to the benchmarking and baselining activity – whether for the UK or EU-wide.
Our partners, supporters and Advisory Board have been generous with their help and expertise, and we look forward to hearing whether we have managed to reflect the level of RetailCraft in the UK, and authentically reflected and celebrated those retailers who are seen by others as being at the top of their capabilities.
For more information on the Top500, or with suggestions on areas of focus, please contact us at research@internetretailing.net.
