THE MULTICHANNEL LANDSCAPE is more complex than merely ‘having a website’ or ‘operating a store’. In choosing which companies to include in the Top500, we have considered companies’ intent, capabilities and activities around the recruitment and monetisation of customers. The definition of a ‘retailer’ for inclusion in our research is:
DESTINATION: the retailer has created a destination that, in the minds of customers, is a source of product, service or experience. Whether this destination is a shop, a site, a place, a time or an event, it’s the sense of ‘locus’ that counts.
FASCIA-FOCUSED: the assessment focuses on individual trading names, rather than a parent company that may operate more than one brand. Since the group structure is invisible to customers, it does not have a bearing on the position of brands owned by a group. The challenge is to turn group capabilities into trading advantages that the customer would notice across brands.
PURPOSE: the retailer has created goods and/or services for the specific purpose of selling, for consumption by the purchasing consumer.
MERCHANDISING: the retailer actively sells and is not just a portal for taking customers’ money. This means the selection, promotion and tailoring of retail offers for customers.
ACQUISITION: the retailer actively markets, recruits and attracts customers with a promise or proposition to the destination.
SALE: the retailer takes the customer’s money. The retailer owns the transaction as the merchant of record.
RECOURSE: the retailer is responsible for the service, fulfilment and customer satisfaction owing from the sale.
EXCEPTIONS: in every good list there’s an exception, where we may include a certain business due to its influence upon retailers and retailers’ customers. Some of these companies will be included within the Top500 and others are tracked for information on their impact on retailers.
COMPANIES EXCLUDED FROM THE TOP500
MARKETPLACES: where a candidate retailer is simply a marketplace, the company is not featured. Where a marketplace undertakes customer acquisition, manages payment, customises offers and recommendations and offers recourse on purchases, then the company will be eligible for inclusion.
PURE TRANSACTION/TARIFFS: where ecommerce is ancillary to the primary purpose of a business, we will not necessarily include them. Online payment for gas or electricity is excluded since the purpose here is to supply energy. Travel companies are not included in the Top500. We have also excluded media-streaming services.
BUSINESS-TO-BUSINESS AND DIRECT-SELLING BRANDS: while the scope of retail is normally direct to consumer, two trends are challenging this – the move for brands and previously solely B2B businesses to sell direct to consumers; and the increasingly retail-like behaviour of B2B brands, in terms of acquisition, promotion, personalisation and service. We have therefore included certain B2B businesses and direct-selling brands.
Summary of elements included in each Dimension:
0. FOOTPRINT DIMENSION
0.1 UK retail turnover, ranging from £3.75m to £40bn –average £370m
0.2 The ecommerce subset of the above, ranging from £2m to £7.3bn – average £45m
0.3 UK web traffic, ranging from 365,000 to 2.5bn page views per annum – average 88m views per annum
0.4 Number of UK stores, ranging from 0 to 11,500 – average 129 stores
1. STRATEGY & INNOVATION
1.1 Strategic practice, including an expert-designated selection of metrics that catalogue a retailer’s embrace of technological or organisational best practice
1.2 Innovative practice, including a selection of metrics from other Dimensions that, to date, are only used by the leaders
2. THE CUSTOMER
2.1 Customer service response time and helpfulness – Facebook and email
2.2 Desktop and mobile homepage performance, including engineering and responsiveness
2.3 Mobile and desktop website navigation – the ease of finding a desired product, including tabs, icons, search and filtering
2.4 Customer feedback – incorporation of customer reviews and product ratings on the product display page
2.5 Mobile app – the incorporation of customer reviews and product ratings in mobile app product display pages and the personalisation, performance and user experience of apps
3. OPERATIONS & LOGISTICS
3.1 Delivery capability including 10 metrics covering the range of options, and competitiveness of timeframes and pricing
3.2 Returns capability, including 10 metrics covering the ease of the returns and refund process to the customer, and the range of options, including return to store
3.3 Collection capability, including nine metrics covering the number, type and convenience of collection locations and the costs and timeframes of the services
3.4 An assessment of the mobile website’s usefulness to customers who want to see the availability of stock, both for ecommerce orders and in local stores
3.5 Mobile app – visibility of stock availability and locations in the app [retailers with mobile apps]
4.1 Customer-perspective review, including 23 metrics covering design, navigation, the relevance of search results, product information and visual appeal
4.2 Mobile app assessment, including nine metrics covering use of notifications, product display and personalisation [retailers with mobile apps]
4.3 Merchandising and product review, including number and depth of promotions, the fraction of a retailer’s range with reviews and descriptions, the number of images per product and the fraction of range that is out of stock [largest retailers]
4.4 Assessment of apparel retailers including level of discounting, days to sell out of the average product and the fraction of the range that is comprised of new stock [largest apparel retailers]
5. BRAND ENGAGEMENT
5.1 Search assessment including total applicable keywords, total reach, share of search compared to other retailers and relative visibility in search results
5.2 Social media presence and availability, including 22 metrics, taking into account size of audience and interaction with it on Twitter, the net change over three months and use of 10 social networks, email, and blog
5.3 Mobile and desktop website review – assessing the integration of social media, sharing and social validation
5.4 An assessment of mobile apps’ incorporation of social media, sharing and social validation [retailers with mobile apps]
5.5 Email assessment, tracking hundreds of thousands of emails to panellists, assessing content, volume and interaction – open rate, delete rate, etc [largest retailers]
6. MOBILE & CROSS-CHANNEL
6.1 Mobile home page performance, including engineering and responsiveness
6.2 Mobile website assessment, including the use of screen real estate, the ease of navigation and the ability to track the availability of goods at physical stores
6.3 Multichannel features, taking into account use of physical store estate for order fulfilment and return, store information on the website, in-store functions of apps and cross-channel loyalty accounts [retailers with stores]
6.4 Mobile app, including 24 metrics, measuring the usability and functionality of apps and weighting features according to their impact on average order value (AOV), time spent on app and conversion rate