The success of direct-to-consumer brands is reflected in the latest IRUK Top500 research, where a record number are included
The rise of direct-selling brands continues in 2019. The IRUK Top500 2019 includes a record number of brands, listed both for their size and for their performance.
In the IRUK Top500 2015 report, 151 – or 30% – of those listed were brands, selling their own products direct to consumers, rather than retailers selling products produced by third-party businesses.
The number of brands dipped to 144 (29%) in 2016, but ever since then has grown steadily, rising to 165 brands (33%) in 2017, 169 brands (34%) in 2018, and in 2019 there are 177 brands, accounting for 35% of all those included in the index.
Direct-selling brands that have long been listed in the IRUK Top500 include Apple, New Look and H&M, the latter two names named as Elite retailers this year for the first time. Clinique is among the new arrivals in this year’s index.
This slow but steady growth is also seen in the IREU Top500 index of European retailers. That list featured 96 brands in both 2016 and 2017, but in 2018 grew by 11.5%, compared to the previous year, to 107 brands. That’s equivalent to 21.4% of all those listed.
The steady growth of this group suggests that the presence of brands in the IRUK Top500 is growing at the expense of retailers that sell products made by other businesses. Since last year, for example, retailers including Toys R Us and Maplin have gone out of business, while still more have slipped out of the Top500 – the largest 500 ecommerce and multichannel retailers are chosen according to criteria shown on page four.
As brands have gained ground within the index, retailers have, conversely, lost ground. If back in 2015 they accounted for 70% of the index, today 65% of those listed are retailers which predominantly sell goods that don’t carry their own brand.
Allied to that is the related suggestion that brands are becoming more effective in their selling techniques. That’s likely to be leading to higher sales, profits and performance – and an IRUK Top500 listing.
Research carried out for the upcoming InternetRetailing Brand Index – IRBX 2019 – of European direct-selling brands shows some of the metrics on which brands are improving their performance. These extend across Performance Dimensions.
Product presentation is improving in the Merchandising Dimension, for example, where RetailX research found more brands enabling visitors to their mobile web to zoom in on images. There was a 14 percentage point (pp) growth in the use of this feature among the 133 retail brands that appeared in the IRBX in both 2018 (56%) and 2019 (70%).
The use of next-day delivery grew too – by 8pp to 35% in 2019 – while 6pp more brands enabled shoppers to return their online orders to store in 2019 (52%) than in 2018 (46%). However, the use of next-day collection fell, to 14% in 2019 from 30% in 2018 of the 147 retail brands measured in both periods. This drop, however, is broadly in line with what we’ve measured across non-brands as well.
Another fall was seen in the proportion of direct-selling brands enabling shoppers to share an item with their friends via social media. Among 147 brands measured in both years, 16pp fewer enabled social sharing on the product page in 2019 (37%) than in 2018 (53%), while the use of social ‘likes’ to illustrate a product also fell to 18% in 2019 from 23% in 2018.