Twitter
Facebook
Linked In
RSS
Login or Register
New to InternetRetailing?
Register Now
Internet Retailing
You are in: > Home > Magazine > Magazine Articles

Insight around the world - InternetRetailing Magazine May 2019

Linked InTwitterFacebookeCard

FLORENCE WRIGHT, RETAIL ANALYST, EDGE BY ASCENTIAL

Amazon is leading the world in cultivating shopper engagement and retaining a loyal customer base, scoring ahead of other top retailers around the world, including Alibaba and Walmart.

 

These findings were based on our proprietary methodology to analyse 25 of the top omnichannel and pureplay retailers across the world, scoring them on a 100-point scale, for their efforts to build an effective shopping experience that helps to cultivate shopper engagement and retention.

 

With a score of 64.4, Amazon’s ranking in first place is attributed to its extensive product assortment and leading own brand portfolio, as well as the development of its sophisticated Prime offering with exclusive membership and benefits.


The other retailers ranking in the top five of the ‘Shopper Engagement and Retention Winning Strategy Report’ are French supermarket giant Carrefour with a score of 59.3, JD.com (51.2), Alibaba (50.6) and Waitrose (48.8).


Carrefour’s high score is largely due to its transformation plan which is pushing forward a range of engagement initiatives including in-store digital integration and its increasing efforts in sustainability.


In a time where there is increasing competition – and cost – for retailers and brands within the retail sector to win and retain shoppers, Amazon, Carrefour, JD.com, Alibaba and Waitrose show they have a strategy in place to maintain a loyal customer base. They have developed capabilities that have allowed them to formulate a new formula for loyalty, to win in a landscape where increasingly fickle consumers, enabled through multiple touchpoints created by the digitisation of retail, are no longer as loyal to brands or where they transact.


Shopper loyalty is cultivated through two main aspects – the emotional bond created through the shopping experience, and the act of repeat purchasing that is encouraged by loyalty schemes.

 

It is therefore essential that retailers and brands get this balance right, ensuring they are building a rapport with the customer. This can happen through a variety of avenues that factor in the four characteristics of shopper engagement and retention. Edge by Ascential sees these as:

  • Tangible: how retailers execute the basics to provide a reliable and impactful everyday shopping experience;

  • Convenient: the ability for retailers to deliver a simple and efficient path to purchase;

  • Emotional: retailer efforts to build a personalised and genuine connection with consumers;

  • Interactive: how far retailers successfully engage with consumers in collaborative and distinctive ways.


Executed correctly, both brands and retailers will reap the rewards by fostering high value, long-term customers that will have the potential to drive sustainable sales in the future.


EMMA HERROD, EDITOR, INTERNETRETAILING

Amazon has retained its crown as the world’s most valuable retail brand growing 25% to $187.9bn. Alibaba’s value grew by 51% reaching $14.6bn while in stark contrast JD.com was down 42% to $11.4bn, , according to the ‘Brand Finance Retail 50 2019’ ranking.


US giant Lowe jumped three places to take 4th place, growing 49% to $23.9bn, closing the gap with rival Home Depot while Canada’s Circle K was the fastest growing retailer, up 60% to $5.9bn.


Amazon’s ever-diversifying portfolio is leaving its retail competitors even further behind, according to the report. The announcement of its new grocery store business across the US immediately hit rival retailers’ shares including multinational giant Walmart (brand value up 10% to $67.9bn) and supermarket chain Kroger (up 8% to $5.6bn).


The dominance of Amazon is undeniable with its brand value totalling more than the following five brands in the ranking combined: Walmart, Home Depot (up 39% to $47.1bn), Lowe’s (up 49% to $23.9bn), IKEA (up 11% to $21.5bn) and CVS Health (3% to $21.3bn).


David Haigh, ceo of Brand Finance, comments: “Amazon is continuing to grow at an unprecedented rate through snapping up more strategic acquisitions across a huge variety of businesses: from home security brand Ring to online pharmacy retailer PillPack.

 

Amazon’s dominance over the retail space emphasises the strength of the ecommerce giant as it leaves competitors in the traditional bricks and mortar space lagging further behind.”
The top five is made up of Amazon, Apple, Google, Micosoft and Samsung.


Alibaba and JD.com ranked 10th and 11th respectively, having had polar opposite shifts in their brand value. Both brands have the pressure of the slowing Chinese economy and the US-China trade war to contend with, meaning an uncertain future, says the report.


JD.com has had a turbulent year following the high-profile coverage of the ceo’s arrest and the reputational damage suffered as a result. This has impacted both its customer base, shrinking for the first time in four years in November 2018, and its shares which fell 6% overnight as news broke.

 

Striving to diversify, the brand has announced partnerships with Google Express, to increase its footprint in the US, and with Rakuten to develop drone delivery. However, it remains to be seen what the impact of these ventures will have on its brand value in the coming year.


Alibaba is continually looking to diversify its offering with a variety of initiatives: the partnership with NBA China, originally set up in 2012, is now starting to bring NBA content to Alibaba platforms and boost online shopping opportunities for Chinese consumers.

 

Alibaba has forged partnerships with global brands including Starbucks, boosting its delivery and digital presence in China, and Intel, collaborating on hybrid cloud, internet of things and smart mobility.


Amazon though is to close its marketplace business in China on 18 July. “Sellers interested in continuing to sell on Amazon outside of China are able to do so through Amazon Global Selling,” the business told Reuters.


Another retailer closing channels is fast fashion business New Look. Continuing its strategic review of international markets, New Look is winding up operations in Poland. It filed for insolvency of New Look Poland, the company which operates its 19 stores in the country.


“NLP’s business has not achieved the necessary profitability to continue its ongoing operations on a standalone basis,” says a statement from the company.


It continues: “The business will continue trading while awaiting the appointment of a trustee.”
The move follows a similar decision by New Look Belgium in January.


ALEX SWORD, EUROPEAN EDITOR, INTERNET RETAILING

Zara owner Inditex has seen online sales grow nearly a third in 2018 as it outlines plans to create a “fully integrated store and online platform”. Online sales were up 27% to €3.2bn, now accounting for 12% of its €26.1bn net sales. Online takes 14% of sales in markets where online is available. Overall profits were up 2%.


The year saw the Spanish conglomerate launch online sales for Zara in 106 new markets, meaning it is now available in 202 markets. The latest launches have been seen it open localised sites online for Brazil in March and the Middle East in May.


The fast fashion company is pursuing what it called a unique business model. This includes centralising its inventory so that it can be accessed through online stockrooms and then distributed to all worldwide stores twice a week.


Inditex said that in 2020 it aimed to roll out same-day delivery in metropolitan areas and next-day delivery as a global standard. This does not include reducing its store portfolio as the business plans to increase the size and number of stores this year adding 5 to 6% of gross new space in prime locations. The larger stores will support services such as click and collect and be enabled via RFID.


Inditex will also incorporate Zara Home products onto its online fashion sites in some markets from the Autumn.


In addition, the company plans to upgrade its headquarters and logistics assets.


Meanwhile, French supermarket chain Carrefour is testing biometric payments in Romania as part of an ongoing digital transformation project.


The chain will allow customers to pay through facial recognition at conventional and self-service check-outs at its Skanska supermarket in Bucharest. The company did not specify how customers create the digital profile that they can use at the checkout.


Carrefour also said it would “strengthen” its collaboration with Google to find new areas of cooperation on online commerce, although it did not give details. The collaboration has previously led to the introduction of training hours for employees to share digital knowledge.


In May 2018, Carrefour launched the carrefour.ro portal, which brings together its various online stores and corporate websites.


One result of the project was the integration of online systems with in-store picking systems to create a click and collect service.

Linked InTwitterFacebookeCard

The InternetRetailing Newsletter

A curated update containing news analysis, reports, podcasts and opinion - completely free and delivered three times weekly

Become a Member

Create your own public-facing profile
Gain access to all Top500 research
Personalise your experience on IR.net
Internet Retailing
We are the magazine, portal and research source for European ecommerce and multichannel retail, hosting the board-level conversation for retailers, pureplays and brands across all of our platforms. Join the conversation.

© InternetRetailing Media

Latest Tweet

Internet Retailing
Tamebay
eDelivery
Twitter
Facebook
Linked In
Youtube
RSS
RSS
Youtube
Google
Linked In
Facebook
Twitter