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Comment: What’s set to define retail in 2014?


As we enter into spring, now would be a good time to reflect on what winter, and specifically the festive season, has revealed about the e-retail sector and what trends we might see emerge during 2014. Earlier this year, I hosted a breakfast roundtable alongside my colleagues Andrew McClelland and Tina Spooner from the IMRG. Joined by a number of the UK’s major retail brands and members of the press we discussed the annual results of the IMRG Capgemini eRetail Sales Index and speculated what the focus for retailers will be in the year ahead.

In my last article, Forward Thinking, I made some 2014 predictions, and as such I don’t want to cover old ground. However, what I would like to do is discuss a few of the key themes that were discussed during the roundtable, and see if I can build on my previous forecasts.

Last year I confidently claimed 2013 was the year of the mobile. With sales via mobile devices, tablets or smartphones, almost doubling in the 12 month period between December 2012 and December 2013, from being 15% of all online sales, to 27%, I think it was a fair assessment.

In fact, the latest figures from the IMRG Capgemini Quarterly Benchmarking report reveal just how much of an influence the growth of mobile has had on UK shoppers. Between the periods of November 2013 to January 2014, m-retail accounted for a quite staggering 32% of online sales – 6% were via smartphones, while tablets were used for 26% of e-retail sales during the quarter.

As these results clearly demonstrate, retailers have been very successful in encouraging consumers to adopt mobile devices as a shopping platform. This is thanks, in no small part, to the significant investments that have been made to m-commerce sites which are now more intuitive and user friendly than ever before. This has helped ensure customers not only use the sites to browse but now make purchases from them too.

Challenges ahead

However, there are some challenges that remain. As our shopping behaviours shift from a traditional e-retail model to mobile, retailers will need to overcome the consistently high basket abandonment rates, as well as the significant number of items that are returned. So while enormous strides have been made, opportunities to materially improve performance remain.

With growing ubiquity of these devices, propelled by the launch of budget entry devices last summer from the likes of Tesco (Hudl) and Argos (MyTablet), there remains a big question as to whether the exceptional growth will continue. With 12 million tablets sold in the UK alone last year, and 70% of UK consumers now owning a smartphone, a slowdown in growth seems very likely. However, the proof will be in the pudding.

Click and collect

Retailers have all worked exceptionally hard to evolve in-line with the technology and offer their customers an accessible entry into online shopping, whether by traditional e-retail, such as laptops and desktops or mobile devices. So much so in fact, that is has become an almost level-playing field with almost all of the top-brands offering very sophisticated platforms. The real battle therefore will lie elsewhere in 2014; delivery. For those brands hoping to get the edge on their competitors and offer customers a unique experience, reputations and brand loyalty will be won through the most convenient delivery model. For retailers, logistics is often in the hands of a delivery partner – click/reserve and collect however, is not.

This year we have already seen some great examples of innovation which are not just limited to retail brands, as demonstrated by Westfield shopping centre. Last month, Westfield launched a click-and-collect hub in partnership with Collect+ that will allow shoppers to pick up their online orders from the West London mall.

Traditional retailers, are also battling it out to introduce the most convenient service. Over the last few months, Tesco and Waitrose announced they are set to follow in Asda’s footsteps, offering their London customers the opportunity to collect groceries from delivery vans located outside a number of London Underground stations. While this is only a trial period we can expect the service to evolve over the coming months, not least because the closure of ticket offices across the Underground network, TfL will be looking to exploit commercial opportunities.


It’s not just TfL that is looking for innovative ways to fill empty space. Argos is currently piloting a new generation of digital stores that will terminate their traditional catalogue and pencil set up. This new store is known as the ‘hybrid’ format – a physical store with important digital capabilities, creating a stronger dialogue between the in-store and online experience. This will be achieved through a number of new features including in-store shopping using iPads with access to applications such as customer reviews. The new stores will improve product choice, ease and speed of availability. The new model could offer a glimpse of what we’ll see from many shops in the future – a strong digital offering that will enhance the customer journey and ease of shopping, combined with in store elements such as staff to provide the human touch.

One of the most important features of this new model is the effect it will have on physical space. It will mean the retailers will be able to sell a wider product offering than the space would have traditionally allowed them to. We are beginning to see this with shops like John Lewis and Marks & Spencer – the latter recently opened up a 60,000 sq foot shop in Exeter which offers the same in store assortment as one of their full 250,000 sq foot stores. This new model will allow retailers to open up shops in areas without much space, and potentially look at opening up branches overseas at a relatively lower cost. It also opens up the possibility of pop up shops and temporary shopping opportunities. These developments are still at an early stage, but it’s exciting to see where it will take us.

In conclusion

Whilst I’m confident that mobile sales will continue to grow this year as people start shopping more and planning holidays, I think the biggest focus for this year will be the integration of digital capabilities with other offerings to bring more speed and convenience for shoppers. As well as innovative, time saving developments occurring in the ways that consumers shop, there will also be an increased focus on the ease of collecting.

Published on Thursday 27 March by Editorial Assistant

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