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IREU Top500 The Customer Report: 2018

IREU Top500 The Customer Report: 2018

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Top-down innovation

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Retailers that rank highly in this dimension adopt innovative approaches as they look to serve customers across Europe

THE STRATEGY AND Innovation Performance Dimension of this first edition of the IREU Top500 focuses on retailers that have successfully taken their retail strategies international. These are traders that have enabled shoppers to buy from them across European borders, while also leading with digital and multichannel services.

The top-ranked merchants in this Dimension have localised effectively to the different European markets in which they sell, enabling shoppers to read about products and services in their own language, and pay in their own currency. They also measure up against the metrics that researchers identified as the most innovative in this report, from fast delivery to offering bug-free mobile apps.“In a changing industry, we have chosen to measure the Top500 retailers against standards that we consider are cutting-edge today in order to judge their approach towards innovation,” says Martin Shaw, senior researcher. “We’ve also measured how strategic traders have been in positioning themselves across the entire European Economic Area. The results reward highly international and innovative traders, rather than performance or size.“As these are all relative measures, we envisage both that the measures we consider innovative will change over time, and that the position of retailers within this index will change accordingly.”

What the Top500 do: international strategy

Ecommerce growth increasingly depends on successful expansion to new markets. Here, researchers have taken the view that strategic growth throughout the trading bloc is of critical importance.

The average Top500 retailer in this group offers two currencies, and three languages, while trading in four countries. Set in the context of 26 official EEA languages and 13 currencies – with the Euro used by 17 members of the EU – it appears that, as a whole, this group of retailers is more likely to localise its currency than the language in which it trades. It’s worth noting that some retailers offered the option of paying in dollars. “Perhaps,” says InternetRetailing’s Shaw, “that’s because retailers believe that consumers can translate the words to their own language, or understand what’s happening on a page by looking at images. However, in order to shop across borders, they prefer to be able to use their own currency.”

What the Top500 do: innovation

Researchers measured the Top500 retailers against metrics they believe single out the most innovative. They measured whether retailers offered websites that are speedy and offer alternative results to ‘no results’ searches, alongside bug-free mobile apps. They also measured whether traders offered fast and flexible delivery and collection. The fastest websites, as measured by the SpeedIndex devised by InternetRetailing Knowledge Partner NCC Group, are found in Norway, the Netherlands and Denmark.

Across all the Top500, just over a third (35%) of retailers showed alternative results when a ‘no results’ search was made. Researchers deemed this innovative as it identifies traders that have devised an appropriate solution to a common problem that is not commonly tackled. Norway, the Czech Republic, Finland, Sweden and Denmark stood out in this measure as more than 40% of traders selling in these territories took this approach. When it comes to fulfilment, the research team took the view that click and collect, next day and nominated time delivery services were all highly convenient but as yet far from universal services. “These services are only possible,” says Shaw, “where retailers have a capable and flexible system that not only delivers what’s easy for the retailer but what’s convenient for the customer.

As with the other Dimensions, we’ve measured retailers’ delivery promises in proportion to Footprint, across all the markets where they offer delivery.” They found that 55% of Top500 retailers, measured in all the markets they serve, offered click and collect, while next-day delivery was available from 29% of retailers, and nominated time delivery from 7%.

Retailers trading in the Netherlands were the most likely to offer click and collect (69% of retailers), followed by the UK (68%), Belgium (66%), France and Germany (both 61%). Next-day delivery was most commonly found in the UK market (67%), France (33%), Czech Republic (30%) and the Netherlands (30%). Nominated time delivery was again most common in the UK (20%), followed by Switzerland and Italy (both just under 10%).

"Ecommerce growth increasingly depends on successful expansion to new markets".


What the leaders do

Swedish homewares retailer IKEA stands out for its innovative approach to merchandising. Its iOS and Android apps boast an augmented reality feature that enables customers to see how furniture will appear in their homes. IKEA Sweden has developed a new kind of shopping experience through small format stores, where customers can see new products, place orders and pick up items ordered online. IKEA also aims to produce more renewable energy than it consumes.

Spanish-owned Zara rates highly for impressive standards of pan-European customer service. It delivers the same standard of services across the 28 EEA countries that it serves in 23 languages, while a global system of shopper feedback across its operation means that designs and services can be adjusted in the light of comments. At the same time it delivers products from its three manufacturing plants at impressive speed, while also regularly updating its clothing lines.

US ecommerce giant Amazon  scores well for the advanced dynamic pricing strategy that it implements, as well as for the sophistication of the recommendations it offers on all its EEA websites. This is a retailer that not only offers a range of millions of products, but also competes with established logistics providers. Its recently-developed Launchpad enables shoppers to buy from UK start-ups.

UK fashion retailer Asos offers top-quality localisation across its markets, both via desktop and on mobile. Shoppers can choose their local currency and language on its main website, and can buy via localised Android and iOS apps in France, Germany, Italy and Spain. The French and German iOS apps enable customers to buy, view daily deals, save products for later and share products on social media. Despite its lack of physical stores on this continent, it provides customers with convenient points to collect and drop off parcels. Its pricing platform enables it to compete in local markets through competitive pricing.

Footwear trader Deichmann sells in 19 EEA countries and 18 languages, with transactional iOS and Android apps in Germany, the UK, Austria and Italy. Its mobile apps offer advanced functionality including barcode scanners, store stock checker – a rare feature for mobile apps – alongside the ability to rate products and write reviews.
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