The latest IRUK Top500 Performance Dimension Report focuses on the areas of strategy and innovation. Emma Herrod shares some of the findings.
Consumers, already cautious at a time of political and economic uncertainty, are fast taking their spending further online, as they look for the most convenient and cost-effective way to buy. Some traditional retailers have found their business model no longer works, and have been forced into administration. Others are scaling back their high street presence dramatically in order to adapt. It’s clear that 2018 is a year of fast and dramatic change in retail: the Centre for Retail Research has said that it expects more change this year than we’ve seen for years, while John Lewis has said that this is a time of generational change.
But at the same time, more agile businesses, joined by new and emerging retailers, are shrugging off this shift: these are the retailers that are further on with the task of adapting their business models in order to fit the needs and demands of today’s customers. These businesses are investing heavily in skilled staff and systems in order to give shoppers the data-driven, intelligent, consumer-centric retail experiences that they now demand.
It’s against this background of fast change that InternetRetailing’s research team presents its performance-based assessment of retail strategy and innovation among Top500 retailers. In the IRUK Top500 Strategy & Innovation Dimension Report, produced in partnership with Barclaycard, they examine the strategies that retailers are using, through practical examples, case studies and interviews, and through the prism of RetailX research that enables the authors to cut through to see what Top500 retailers are doing both individually and as a group. Using this, retailers of all sizes can benchmark their performance and find areas where improvement can put them ahead of the crowd.
The findings make for a fascinating read. As Martin Shaw, Head of the RetailX research team explains: “In this dimension we bring together the IRUK Top500 metrics that we consider the most strategic and innovative including more than 40 different measures of retailer performance, covering delivery, collection and returns, how easy it is to load and use a website, and mobile app functionality. These are measures that help traders stand out from the crowd, and to compete in challenging markets”.
The definition of what ‘strategic’ and ‘innovative’ are have naturally changed over the last year. Last year, it was still innovative to offer a click and collect service. This year, the RetailX team has measured how quickly retailers promise products can be collected, and they’ve found that retailers are now offering faster delivery along with faster collection times.
Delivery is also faster on desktop and mobile websites, offering consumers the speed of service that they now expect. All of this helps retailers, in turn, to give customers the experience that they would like to become accustomed to.
The measures also encompass features that improve the mobile experience from augmented reality, live chat and visual search in mobile apps, to predictive search (56% use this) and the ‘hamburger button’ (94%) that enables easier navigation. This analysis, measured by real people recording their experience on every Top500 website, focuses on the practical user experience, concentrating on the aspects that really make a difference.
“In particular, this year, we’ve focused on easy-to-use search that returns relevant results, along with simple navigation that helps shoppers get straight to the point. We’ve also looked to see how easily users can see and interact with visuals on the product pages of a website,” says Shaw.
Amongst the retailers featuring in the report are Ocado, Dunelm, Hotel Chocolat, Screwfix and The Perfume Shop. Ocado is well known as a grocer turned technology company which has expanded through partnerships with other sectors including publishing and beauty and implemented its technology for Morrisons, Groupe Casino, ICA, Sobeys and Krogers.
Dunelm is in the process of upgrading its omnichannel capabilities as it takes advantage of the Worldstores technology platform which is bought as part of the acquisition of WS Group. “We have expanded our customer reach and digital capabilities significantly over the last twelve months and will continue to do so as we exploit the technology assets which we acquired with Worldstores,” says Nick Wilkinson, CEO, Dunelm.
Screwfix has changed from selling screws via mail order to launching a website in 1999 and opening its first stores in 2005. It now has close to 600 stores and recorded double-digit sales growth and a 5% rise in profits in its last financial year. “We’ve opened on average a new store every week for the past eight years,” says CEO Graham Bell, “and we’re not planning to stop there”.
The retailer clearly understands its customer base. As Bell says: “Our proposition is all about responding to their needs – providing our customers with incredible convenience, great products and value for money.”
The Strategy & Innovation Dimension Report flows from IRUK Top500 research, in which InternetRetailing benefitted from the valued input of its skilled Knowledge Partners. As always, InternetRetailing would like to hear what readers think, whether you have views on the metrics we’ve used, and how they could be improved, or on an innovative approach that’s working for you as a retailer – please do share your thoughts via email@example.com.
Further copies of the research can be downloaded from www.internetretailing.net.