August 4, 2011
Following my blog post from a couple of weeks ago where I wrote about the need to take a local approach in Europe, I’d like to take a few minutes to say something about the first of our country-specific reports.
It was natural to start with the UK Online Retail Overview, 2011, for two reasons. The first is that I live in the UK, so it’s the market and retail environment that I’m most familiar with, but secondly and more importantly, it’s the largest online market in Europe. Based on the figures in our European Online Retail Forecast, the UK online retail market will be worth £28.6 billion in 2011; this represents 9.4% of the overall national retail market, almost double the online penetration of any other European country.
So there are some big numbers but also some interesting trends to examine.
The UK market is increasingly dominated by multichannel retailers. While there are a range of notable online pure play success stories (Amazon.com, Asos, Net a Porter, and Play, to name a few), we are seeing an increasing level of sophistication in how the major high-street retailers are integrating their on- and offline properties. Initiatives like Click and Collect are now commonplace, and the pace of innovation isn’t slowing, with new initiatives such as Argos’ 90 minute Shutl delivery service being a prime example. So there are plenty of examples here to be inspired by.
The other unique aspect of the UK market is the profile of the grocers. Asda, Sainsbury’s, and Tesco, along with a few others, have a huge influence over online sales in the UK, with groceries representing 20% of all online sales — the single largest category. This makes the UK unique in Europe from that perspective. But what is the secret of its success and what can others learn from it?
I take a look at the underlying reasons behind these and other trends in the UK in UK Online Retail Overview, 2011, and look forward to opening up the box on France and Germany over the next few months.