Online Retailing in the UK 2011

Online Retailing In The UK 2011

Release date: February 15th, 2011 (46 pages)
PDF/Powerpoint format. Price: GBP790.00


We believe that throughout 2011 Amazon will pip Tesco to the post of biggest UK online retailer ranked by sales (for both food and nonfood combined). Indeed Tesco has a real battle on its hands. An invigorated Asda (in online grocery at least) will challenge Tesco at the same time as Sainsbury’s and Ocado are delivering strong online growth. With Waitrose stepping up and uncertainty surrounding both Morrison and M&S in terms of online grocery strategy and possible market entries, one thing seems clear, Tesco will feel the competitive heat in online grocery in 2011.

Amazon’s move into groceries (an offer probably aimed more at the wholesale sector for now), does not help either, but more significantly the pureplay continues to raise the competitive bar and continues to set new standards in online retailing. We predict that free deliveries as offered by Amazon will become the new normal in UK online retailing in future, in the same manner as other features the global champion pioneered such as marketplace or prime will continue to be replicated by others (Asos, Ocado). Apart from installing click & collect in some of its store estate Tesco has not come up with a compelling answer to the challenge of free deliveries yet.

Making matter worse for Tesco is the defection of high flyer Laura Wade Gery to M&S. Currently M&S only achieves online sales of around £400m, but the retailer has set a target of doubling this over coming years. We believe that M&S will achieve this and more with the skill set and know how of the new management.

That said, it’s not all doom and gloom for Britain’s biggest retailer. Tesco can still wield its supreme loyalty tool, the club card, to its
advantage and has also set the ball rolling in m-commerce. Indeed we believe Tesco has scored an app hat-trick. In terms of functionality Tesco’s app suite and offer remains unrivalled in the UK with no other multichannel retailer anywhere near the standards set by Tesco.

As the sector is clearly in upheaval, Researchfarm assesses the UK online market by looking at the leading players ranked by sales fulfilled online and what tactics and strategies they use to drive online footfall and generate online loyalty.

Table of contents

Executive summary p4 Market fundamentals: UK p1 1 Total retail and online retail spend 2005 – 2010 (€m): online storming ahead p1 3 The background p1 4 2009 Sales in €m: Segments p1 5 Segment profile: Consumer electronics, grocery p1 6 Segment profile: Clothing & footwear; Music, DVDs and games p1 7 Retailer online turnover in £m: Top ten UK 2008-2010 p1 9 Tesco – the online strategy, club card and the app hat-trick p2 0 Amazon – catching up, kindle and groceries p2 2 Amazon – Marketplace, Fulfillment and Prime p2 4 Asda – George, becoming more transparent, investing in NSM p2 5 Littlewoods – from mail order to online, taking on N Brown p2 7 Argos – introducing paypal and facebook p2 8 Argos – new delivery options and customer ratings p2 9 Argos – driving click & collect and app development p3 0 and Next p3 1 Sainsbury’s – fighting off the challenge from Ocado p3 2 Ocado – finally on course to profit p3 3 John Lewis – breaking through £500m and launching in the EU p3 6 Other interesting players: Asos – pioneering and internationalising fast p3 7 N Brown, Net-a-porter p3 8 Assessing the opportunity: UK p3 9 Assessing the opportunity: The model p4 1 Assessing the opportunity: The result p4 2 Outlook & Recommendations: UK p4 3 Sources p4 6