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 Oracle + Bronto-sponsored 2018 InternetRetailing UK Top500.
For the fourth year, InternetRetailing’s team of researchers has assessed leading UK ecommerce and multichannel retailers from a unique performance-based perspective, comparing and contrasting the capabilities of these top-flight traders to see where and how the best retailers excel.
The resulting InternetRetailing UK Top500 report goes beyond a ranking based simply on retailers’ revenues, store networks or web traffic to focus instead on their work across six Performance Dimensions which combine into what InternetRetailing calls ‘RetailCraft’. Together they constitute a striving for excellence, at scale, that’s responsive to the customer.
The Six Performance Dimensions are:
Strategy and Innovation: the extent to which the retailer is adapting for growth, international commerce and customer responsiveness;
The Customer: measuring experience and service from the customer’s point of view;
Operations and Logistics: delivery, returns and collections;
Merchandising: selling online in appealing ways and supporting browsers with navigational and search tools to find products with a minimum of time and effort;
Brand Engagement: making their brands familiar to the customer, and connecting;
Mobile and Cross-channel: beyond single ecommerce or store channels.
Each year, the researchers aim to analyse not only which retailers are excelling in the highly competitive retail environment but how they are doing so, asking what are the approaches that work. The team looks also at emerging technologies, watching to see where and how they are adopted, and at those approaches that retailers are now starting to leave behind them as their businesses mature and change. The ambition is to understand what leading retailers do that works for their businesses, and how others can in turn learn from them in order to boost their own businesses for the future.
WHO ARE THE ELITE IN 2018?
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 2017, this grouping was made up of Amazon , Asda , Boots , John Lewis , Marks & Spencer and Tesco . 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 2018 ranking? Are the ‘Elite’ retailers still heading up the ranking and how did 2017’s unpredictable trading year impact on their performance across the six dimensions?
ACROSS THE DIMENSIONS
Retailers stand out in the Strategy & Innovation Dimension when they offer customers a convenient, reliable and innovative service, with flexible delivery options, fast-loading websites and mobile apps that improve the customer experience. More than 40 different metrics are used to assess retailers in this Dimension and with all metrics in retailing these keep evolving as the retail industry itself changes. Where once offering click and collect services were seen as a significant innovation, now researchers measure how quickly shoppers can pick up their online order from the store. For the first time they assessed whether retailers include augmented reality, live chat or visual search in their mobile apps, as well as features from predictive search (56% did so) to a ‘hamburger button’ enabling easier navigation (94%).
It was by giving the customer the best online experience that retailers stood out for their performance in The Customer Performance Dimension. Researchers measured how well both customer service and desktop and mobile websites and apps lived up to customer expectations. Top500 retailers enabled shoppers to communicate with them via a median of eight channels – the majority offering Facebook, Twitter, a contacts page on their website, being contactable by telephone or email. Least widely used of the 13 channels assessed are a community forum (6%), Snapchat (16%) and live chat (26%). Retailers responded to an email enquiry in a median 16h 13mins and to a Facebook query in a median 34m.
Researchers found that a desktop home page of a median 2.6MB (up from 2.3MB in 2017) started to render in a median of 1.9s, and was visually complete in 8.2s. That’s up from 7.4s in 2017. Mobile home pages started to render in 2s and were visually complete in 7.2s, after a page of a median 2.1MB was downloaded.
When it comes to The Operations & Logistics Performance Dimension, retailers that offer fast and flexible delivery, collection and returns come in ahead of the competition. Tesco, for example, stands out for the speed of its collection and the flexibility of its delivery service while fellow supermarket Sainsbury’s also stood out in this dimension, for a flexible delivery offer that included same day, nominated time and Sunday options. It was one of the 23% that had extra stock checking features on its mobile app. Marks & Spencer earned its place for a generous returns policy that includes drop off at a third party location, and a promise to refund the cost of the return.
Retailers that enable shoppers both to browse products for inspiration and to find specific items quickly stand out in the 2018 IRUK Top500 Merchandising Performance Dimension. The assessment focuses on how easily customers can navigate both desktop and mobile websites as they look for products, for inspiration, and for what other customers thought, whether through reviews or social media sharing.
There’s evidence that in 2018 UK retailers are simplifying website navigation. Researchers found that 75% of Top500 retailers offered drop-down search suggestions, up from 63% a year earlier, while more retailers enabled filtering products by price, by brand and by product type. General merchandiser Argos stood out for a sophisticated approach to merchandising in its mobile app, which offers product reviews and ratings alongside social media likes and scores highly for its use of personalisation.
It’s when retailers work to build an audience that they lead in the IRUK Top500 Brand Engagement Performance Dimension. When they enable two-way conversations by offering different ways to get in touch, engaging – in a personalised manner – via those channels, and encouraging shoppers to have their say by rating, reviewing and sharing products they are at the forefront of the best practice that is celebrated here. Standing out in this Performance Dimension are Clarks , Argos, Homebase , Wickes and Superdrug . The latter enabled social validation and sharing while scoring highly for the level of personalisation on its website and offering daily deals.
The final Performance Dimension is Mobile & Cross-channel. In 2018, this dimension maps increasingly sophisticated services that bridge ever more efficiently the gap between the store and online. While, for example, click-and-collect used to be the exception rather than the rule, now most IRUK Top500 retailers offer the service, and many are improving on their offer. Argos and Screwfix both stood out for a mobile and cross-channel performance that includes offering reserve and collect alongside same day collection. Their mobile apps were among the 23% of iOS apps that offered additional stock checking features. Apple , Dunelm , Sainsbury’s and Wickes stood out as well.
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? Not wanting to steal anyone’s thunder I’ll leave the final reveal to InternetRetailing’s research team and the 2018 InternetRetailing UK Top500 Report. If you haven’t received a copy in the post, a digital version can be downloaded from www.internetretailing.net.