The smartphone is now firmly established as the largest single online shopping channel in the UK. It’s grown fast in popularity in an ecommerce context as shoppers use the one device that they always have with them to buy quickly whenever they want, and wherever they are. Mobile phones have made it possible to buy from home or work, while commuting or while out and about. Retailers have found innovative ways to use the smartphone’s different features, including cameras as barcode scanners. It’s become a handy place for shoppers to house their favourite retailers’ mobile apps, giving them a shortcut to completing all kinds of shopping tasks online, at the time that suits them.
At the same time, mobile can act as a bridge between online and the store, helping to organise multichannel services, from buying online and collecting in-store to returning an unwanted online order to a store. Such services give customers flexible and convenient shopping experiences that make it easy for them to buy during the course of their everyday lives.
In the Mobile & Cross-channel Dimension, RetailX researchers look at how Top500 retailers serve shoppers across channels. They assess whether retailers have a mobile app, and also what cross-channel services they provide for their customers. In addition, they hit the shops to find out how digital-in-store is working on the ground.
The findings are presented here through three key questions. First, to what extent do Top500 retailers enable shoppers to buy via mobile apps? The use of apps is growing but varies by type and by retail category. The mobile app is a unique marketing channel via push notifications as well as a platform for innovative features such as virtual reality shopping or visual search for similar products.
Second, what multichannel services do retailers offer? Use of in-store collection and returns of online orders feature here, as do store location and stock-level information on websites and linking in-store purchases to online user accounts with electronic receipts.
The final section analyses the in-store experience in those Top150 retailers that have shops in London with a focus on features of the ‘digital store.’
To what extent do Top500 retailers enable shoppers to buy via mobile apps?
More than a third of Top500 retailers have an iOS app for use on Apple smartphones and tablet computers. That’s up by 7pp to 35% in 2020. Android apps, for use on other brands of smartphones, have also risen in popularity, although not yet to the same extent as iOS apps. In 2020, 22% of retailers have Android apps, up by 5pp on last year.
Grocers were the most likely to add both types of app during the year. Half (50%) of Top500 retailers have iOS apps. Among the 20 retailers measured in this category in both 2019 and 2020, there was a 12pp increase in those with an iOS app, from 40% to 52%. More than a third (37%) of grocery retailers have an Android app, with the number growing by 9pp from 28% last year. App adoption was also significant among those selling health products. In this category, 30% have iOS apps (+12pp from 18% in 2019) and 25% have Android apps (+8pp from 17%).
iOS apps are popular in cosmetics (50% of Top500 retailers have them) and jewellery (50%), but the use is lowest among those selling trade and DIY tools and equipment (-1pp to 35%) and direct-selling brands (35%).
Android apps are most popular among those selling groceries (37%) and home and industrial appliances (36%) and least popular among direct-selling brands (19%), followed by those selling health products (25%).
What multichannel services do retailers offer?
Retailers offer a more convenient customer experience when they connect their online business with their stores and develop a shopping journey that is as seamless as possible. Shoppers then find it faster and more reliable to order the product they need online and collect it in a store. Similarly, when a product is not wanted after all, returning to a store or a third-party return point will often prove more convenient than sending by mail. This year’s RetailX research reveals that multichannel retailers are now less likely to offer collection and returns in their own stores. For more on these subjects and on delivery, see the Operations & Logistics Dimension (page 24).
Click and collect
Slightly fewer retailers now give online shoppers the option of picking up their order in one of their stores. Some 54% do so – down from 56% last year. Same-day collection is less widely available in 2020, with 7% of Top500 retailers now offering this. That’s down by four percentage points (pp) from 11% last year. Next-day collection has also reduced in popularity, with 19% offering it in 2020, down by 7pp from 26% last year.
At the same time, the service now takes longer. The median standard time to collect increased by four hours to three days and one hour in 2020. But the cost collection remained the same, at a median £1.
Reserve and collect may offer a useful option for shoppers who prefer to pay as they pick up the order they placed online. But it seems to be losing its appeal for retailers. In 2020, just 4% of retailers offer this, down from 5% in 2019.
One in three (34%) of Top500 retailers now offer to deliver products to at least one third-party click and collect service. A quarter (25%) offer collection through one third-party provider, while 7.4% offer it via two providers and 1.4% offer it via three. Just 0.2% offer five choices of third-party provider.
CollectPlus, with 7,000 pick-up points around the UK, is the most popular provider, offered by 40% of those Top500 retailers who use a third-party provider. That’s followed by myHermes ParcelShop, with 4,500 pick-up points and used by 27% of retailers in this category. A quarter offer DPD, which has 2,500 points, 16% use UPS Access Point, with 2,800 points, 12% use DHL Collection Point, while 5% offer Doddle.
Only 1% enable shoppers to collect their online orders from a locker that they own. That’s the same proportion as did so in 2019.
Fewer retailers now enable shoppers to return their order to a branch of their own store, yet more now support returns via a third-party provider. In 2020, 43% of retailers enable shoppers to return their online order to a store. That’s down by 5pp on 48% in 2019. But a quarter (25%)of the Top500 allow customers to return their order to a third-party location. That’s up by 5pp on the same time last year. Perhaps retailers find that it’s more efficient for them to outsource the process, or perhaps using a third-party operator is likely to be more convenient for shoppers who decided to buy online rather than in a store in the first place.
Understanding the in-store experience
RXUK Top500 researchers hit the ground in London during the summer of 2019 to find out to what extent stores run by Top150 retailers incorporate multichannel and digital features. They visited a flagship store where possible, with each visited twice to ensure accuracy. Not all of the retailers have stores in London, and some are pureplay retailers, but in total, researchers visited 140 stores. Fifteen per cent of the stores visited were in shopping centres, while the remaining 85% were in high street locations with ground floor access. The largest group of stores had one floor (43%), while 36.1% had two floors and 3.5% had six floors.
How digital in-store works in practice
Researchers found that 43% of stores had wi-fi. Of those stores with wi-fi, 34.8% required a password, and 58% required shoppers to register in order to gain access. 9% of the wi-fi networks could be accessed via social media credentials, while 12.1% were offered by a third-party, not directly by the retailer.
Staff were equipped with tablets in 19% of stores, and staff in the same proportion of stores could reserve an item available on the website but in that store for later collection. Almost half (48%) of stores featured stationary tablets that customers could browse. Customers were signposted to a special desk or place to return items in 8.8% of stores.
Of all the stores, 18% featured in-store experiences while the remaining 82% did not.
Shoppers could checkout using mobile payment in 6% of stores, while 2% of stores signposted app checkout. Self-checkout was available in 3% of stores, and the retailer provided digital receipts for in-store purchases in 15% of stores.