17 May UK Market Highlights – May 2018
Every month B.D.C. gives you the key retail information you should not have missed. Key trends, innovation, major players, startups, market figures – discover in 60 seconds the latest key retail news.
- A recent survey from Vodat states that 72% of UK shoppers would more likely convert with in-store connectivity. As a result, 35% of the audience said they would make a purchase and 37% revealing free Wifi would make them buy more in a single shopping trip. Similarly, more than half of shoppers (52%) agreed that wifi at their disposal would make them spend longer at a traditional store. However in real facts over two-thirds (77%) of UK purchasers refuse to use brick-and-mortar store wifi if they feel the sign-up process is too long. In-store services must be delivered fast to ease the shopping experience. Finally, 43% of UK shoppers assure they don’t use wifi offered by retailers due to security concerns, worrying that the network isn’t secured. The picture is then quite different in real, looking at security-concerned and demanding consumers.
- According to the latest BRC-Springboard Footfall and Vacancies Monitor, footfall in April decreased by 3.3% YoY, a significant decline compared to the positive rate of 1.6% seen in April 2017. Including March, it has resulted in an unprecedented drop of 4.8% over the two months.
- UK Ecommerce shows no sign of slowing down. Today, 26% of Brits shop online once a week and 68% shop online at least once a month. A research conducted by Ipsos MORI (based on 3,000 UK consumers aged 16 years or older) reports that consumers are shopping online more often, they are also spending more. Currently, the average basket is around £218 on online shopping over a 3-months period. Delivery subscription schemes are also becoming more and more popular among British consumers. Almost three in ten Brits currently use a delivery subscription scheme (+20% compared to the second quarter of last year). This trend is lead through mostly young people (18-24 year olds).
- After the announcement of its deal with ICA’s chain in Sweden, Ocado Technology just announed another international agreement with Kroger. Kroger is one of the world’s biggest grocery chains with annual sales of £90bn. Kroger has about 2800 retail food stores under a variety of brands and serves nine million customers a day. They will use Ocado’s technology in the US exclusively and under the terms of this deal, Kroger will also take a 5% stake in Ocado. Shares in online grocer Ocado have surged by 60% after it struck the deal. Kroger and Ocado are now in the process of identifying three sites across the US for the development of new “automated” warehouses this year. Other deals so far locked in by Ocado include one in France with supermarket giant Groupe Casino, in Canada with Sobeys and in Sweden with ICA.
- Burberry reports 40% of sales via mobile in latest financial year. The group has also reported a slight fall in overall revenue but growth in retail turnover and in pre-tax profits.
- Adidas has recorded an 18.6% increase in net income for its first quarter of the year, compared with same period in 2017. The sportswear retailer’s net income surged to £476 million in 2018. The German brand also enjoyed an operating gross margins uptick of 1.8% to 51.1%, while operating margins increased by 1.8 % to 13.4 per cent. Finally, online sales was the fastest-growing channel, with Adidas recording a 27% YoY rise in volumes for the quarter.
At the moment, smart speakers are mainly used for repeated and simple queries which are still far from the full capabilities of those AI-powered devices. However, with an estimated 1 billion searches per month already being conducted by voice, the technology certainly can’t be dismissed as a fad.
Today, 40% of adults are using voice search once per day and voice shopping is expected to grow from £1.4 bn today to £29 bn in 2022. In addition, there will be over 1 billion voice assistant devices in circulation worldwide by the end of 2018 (figures from Alpin.AI).
Although the US and UK are currently the biggest markets regarding smart speakers sales, France is also progressing and major players strengthen their positioning on voice shopping. The French electronics retailer Fnac Darty will roll out demonstration areas for Google Home products and services in all its stores to fend off challenges from Amazon. Read more.
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