InternetRetailing’s IREU Footprint Report, highlighting the 800 leading retailers selling in Europe, was launched at the InternetRetailing Expo. Emma Herrod highlights the initial findings.
From ATU and Abercrombie & Fitch to Zlotewyprzedaze, Zoot and Zulily, InternetRetailing’s IREU report lists the 800 traders leading the 31 countries of the Economic European Area, plus Switzerland.
Following further analysis, the list will be narrowed down to the 500 that will make up the IREU Top500, to be published at the InternetRetailing Conference in October.
The retailers have been selected for inclusion following a research process that takes account of factors including their degree of web engagement, how many physical retail locations they have and their turnover.
Researchers found that ecommerce giants such as eBay and Amazon dominated online, with 41% of all online traffic, while traders such as Carrefour and Tesco had far-reaching store networks.
The range of tracked revenues went from less than €€20m to tens of billions. Of the 800 retailers listed, 20 operated stores in 10 or more countries of the area under observation.
The research also threw up insights about individual countries. While 80% of the Czech Republic’s most popular retailers originate from that country, none of Malta or Lichtenstein’s top retailers are domestic.
“What’s interesting is the lack of pan European titans,” said InternetRetailing Editor-in-Chief Ian Jindal. “Each country seems to have its titans but there aren’t that many across Europe. It’s only the pureplays who seem to have this.”
Discussing the concept of ‘top’ness in ecommerce and multichannel retailing, Michel Koch, Ecommerce Director at Maplin, said: “For me, being top in terms of omnichannel retailing is clearly understanding the way to join the dots between your store estate and the website. When going international, one of the things you’re measuring here, it’s how you localise your value proposition and your brand to all the individual countries you want to address, rather than sell cross-border with one website. In France, for example, people prefer to collect from collection points, and in other countries you need to adapt your payment methods. It’s how much effort are you prepared to make?”PERFORMANCE DIMENSIONS
The InternetRetailing team of editors considered the task ahead of researchers as they look to rank retailers across the six performance dimensions that are used across the IR Top500 series to measure ecommerce and multichannel performance. They are: strategy and innovation, the customer, operations and logistics, merchandising, brand and engagement, and mobile and cross-channel. The IREU Top500 will determine the leading retailers in each of these dimensions.
Writing on merchandising, Jindal said: “In our research, we will see masterful retailers at scale in their own countries and regions, niche players that resonate across borders and multinational specialists who are able to extend generic patterns with local touches. Balancing these capabilities to determine the best retailcraft is an eye-opening task, but necessary to understand the heart of multichannel, multinational retail.”
What’s clear from our work and thinking so far is that Europe, for all that ecommerce is becoming an international language, remains a hugely diverse continent where retailers do things very differently in different countries.
Get beyond such shared experiences as navigating the online checkout process – and even in such an apparently utilitarian part of the shopping process there are huge variations around, for example, payment and delivery options – and it becomes clear that Spanish and German customers have very different expectations. Retailers from the UK and, indeed, other European countries are mistaken if they assume the approaches that worked in a home market will succeed across the continent.
Those online merchants that have had most success so far, such as Amazon and eBay, are those that have approached each country on an individual level and invested significant resources. It’s important to realise this doesn’t mean creating 32 different websites. Amazon, which has the highest web traffic in all but eight European countries, dominates the retail market with only six country-specific websites on the continent. It does so with an emphasis on competitive price and customer service, but also by taking a strategic approach that focuses on the key European ecommerce markets.
This is revealing. While it’s a given that shoppers’ expectations vary across markets, it seems likely that larger merchants such as Amazon, which concentrate on what consumers do have in common across the region, principally a wish to buy at the right price and in the manner that best suits them, will be among those that succeed in selling across the EEA.
But this won’t be the only approach that succeeds. There are huge opportunities, for example, for smaller, nimble specialist companies. One way to think about the wider European market is to remember that a shared interest – whether in astronomy, baking or calligraphy – is in itself a kind of shared language and culture. We would expect that sector-specific retailers that work out how to export expertise will also prosper.
As to what unites these kinds of successful retailers, the behemoths and the specialists, based on our experience researching the IRUK 500 we would make a calculated guess that customer service will always be a key differentiator.
Companies that, in ways appropriate to the markets in which they operate, reach out to customers and then deliver on promises will always have a better chance of succeeding. Or we may be wrong. One of the most exciting things about doing this kind of qualitative and quantitative research is that we’re able to take such assumptions and test them – to destruction if necessary. Over the coming months and years, as we refine the IREU 500, it’s this approach that will enable us to create an unrivalled picture of the European ecommerce and multichannel market, and to highlight examples of best practice, from wherever they originate.
In October 2015, we will publish the first InternetRetailing European Top500 Report. We are always interested in finding expert Knowledge Partners to assist us with this research. For more information, contact Ian Jindal, Editor-in-Chief, InternetRetailing, [email protected]