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IREU Footprint: Strategy and Innovation

Emma Herrod asks what it means to be ranked as an Elite retailer in Europe in terms of Strategy and Innovation

The IRUK 500 report has already shown what it means to be an Elite or Leading retailer in the Strategy and Innovation Dimension in the UK: ease of purchase for customers and footprint extension. “We’ve focused on the journey to being everywhere for the customer and making the channels buyable. We’ve looked at how pureplay etailers move from a ubiquitous digital store to ubiquitous product delivery; while established retailers make strides to leverage their store estate and beyond. In coming years these capabilities will be readily available, but for 2015 it takes a strategic commitment to lead, to deploy and to grow here. We’ve also considered the post-commitment moment from basket to bought it,” says the UK report, released in January.

This automatically eliminated bricks-and-clicks retailers not offering click and collect while favouring pureplays who deliver to a large number of collection points, such as Collect+ and lockers. At the report’s publication, only 218 (44%) of the Top500 retailers in the UK offered click and collect.

Of course, each market is different, with some countries more ‘advanced’ in terms of multichannel or omnichannel retailing, so how should the measurement translate to Europe where click and collect is less mature? Will it favour the pureplays in France and Germany, two countries in which collection points are the delivery mechanism of choice for many online shoppers? And what about payments: is consumers’ preference for invoicing weighted the same as another country’s use of PayPal, e-wallet, credit card or mobile payments?

“84% of French shoppers have ordered from a retailer’s website in another country, compared to 67% of the German population”

While ‘localise’ is the key strategy for retailers operating in different countries, how can this be assessed – or even how do we measure effective cross-border trade with shoppers from multiple countries buying from one single site? Should retailers’ sales be weighted by the level of cross-border orders they deliver? Research by delivery company Hermes has found, for example, that 84% of French shoppers have ordered from a retailer’s website in another country, compared to 67% of the German population. Meanwhile, from a global perspective, the UK and Germany are the most desirable e-destinations in Europe for consumers to purchase goods online from outside their own country.

Looking at the issue from another perspective, how effective are the European operations of the global ecommerce leaders? Amazon leads in terms of B2C ecommerce sales, according to one ranking, with China’s ranking second, followed by Wal-Mart , the Otto Group and then Tesco .

And a high turnover does not affect rank in the IREU 500 Strategy & Innovation Dimension. So, what then should be measured and can Elite be measured the same for all retailers whether they operate in just one country, across borders or localised for all 32 countries?

Amazon, for example, which topped this dimension in the IRUK 500, operates eight sites across the EEA countries which will be incorporated into the IREU 500 report. It has a budget for R&D which ran into billions of dollars in 2014 to keep it ahead of the game. Now compare Amazon to other retailers which topped the UK report – John Lewis and Argos . As far as reach is concerned, Argos has 734 stores in the UK and the Republic of Ireland, along with a localised site for Ireland, while John Lewis operates 43 stores in the UK with delivery offered to other countries from its UK site. Both are Elite retailers when all of the Dimensions are taken into account but ‘just’ ranked as Leading in the Strategy and Innovation Dimension. Amazon alone headed the Elite ranking here. So, while a retailer may be Elite in its own country, can they be measured as Elite or Leading in terms of Strategy and Innovation across Europe?

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