Monday, 13 January 2014

UK Retail data shows the surge in online shopping. Big high-street brands need to take more notice....



The well publicised vital Christmas retail sales figures have been a double-edged sword but perhaps, a lesson.

Whilst trading was down for familiar names such as M+S and Tesco, in turn causing drops in their share prices, online retailers such as Asos (online fashion), Ocado (online grocery), Argos, Dixons have done well. 

Dixons/Currys will have done well too, through the sales of technology products such as the Kindle, Ipad, games consoles and Phones. They are replacing traditional toys as gifts.

John Lewis is saying it sold an Ipad every 10 seconds in the Christmas run-up.

Indeed Tesco showed +10% growth in their online business but it didn't compensate enough, for the decline in their shop sales. Morrisons which is considered to be a big Christmas loser, have only just launched their online shopping site in January. 

There is a marked contrast between offline/online and further signifies the consumer switch, both to online shopping and to discounters such as Aldi, Primark and Lidl (up circa +20% in the UK). Asos (online fashion) showed growth of a staggering +30% in the UK in Q4. White Stuff, a clothing retailer showed +50% growth online. 

KPMG reported that online non-food sales at Christmas were up by a fifth. That's +20%! In grocery alone, they report 15% of all sales are online and a value of £900 million sold online between December 20th and 23rd (3 days).

A third of Tesco's online grocery sales were by mobile at Christmas and 'click and collect' being a big feature all around. 

Apart from convenience of being able to shop whilst watching TV for example, in a recession, the cost of petrol and car-parking is an issue. Equally too, there remains an over-riding view that online is cheaper (and in some ways it should be, cutting out middle-man margins). 

Of course too, online shopping is now so easy and intuitive, that it's considered an easy option for most. It's not as technologically daunting as perhaps it once was.

There can be little doubt left, I think, that online shopping has exploded and these Christmas UK numbers illustrate it clearly. The proliferation of devices too, make it even more convenient and the 'same day delivery' issues as promoted by Amazon, bring it into a new phase.

If you're in retail, the value of your brand is now in what you do with it online. The need for large, traditional retailers to start investing in their online brand, is almost past. It's now a must or they will suffer.

Hard to see it any other way.