UK fashion retailers remain challenged for in-store sales growth generally but E-commerce in the UK is growing, changing constantly and rapidly. We’ve got a valuable collection of news and recent fashion retail developments worth noting – with lots of lessons to put to use in other markets.
Overall UK February retail sales dipped 0.4% but were still up 3.8% over 2015 according to a Bloomberg report. The British Retail Consortium reported more than 20% of retail sales took place online in February. UK Office of National Statistics said 79% of UK consumers bought online in 2014 compared with 78% in Denmark, 77% in Norway, 22% in Italy and only 10% in Slovakia. A Tryzens study estimated the average UK online shopper spends more than £6,000 ($8,477) a year online.
IMRG-Capgemini eRetail Sales Index showed UK shoppers spent £8.9bn ($12.6bn) online in February, up 18% from 2015. OC&C Strategy Consultants estimates higher delivery costs will reduce the bottom line of online businesses by 1.5%. The popularity of subscription box sites, such as Graze [IRDX RGRZ], Loot Box and Gousto rose by 155% over the last year, according to a Connexity Hitwise report. Argos says more than half of £4bn ($5.7bn) sales are now made online and more than a quarter via mobile.
French Connection reported 23% of its total revenue came from e-commerce with 48% of that from mobile commerce. Ted Baker said 2015 e-commerce revenue totaled more than $75.6 million, up 45% from 2014 and represented more than 15.4% of total revenue. High-fashion retailer Jimmy Choo reported $448 million in 2015 revenue, up 6.1% with 6% from online sales.
Laura Ashley online sales grew to $70.8 million in 2015, up 5.3% on total annual revenue of $408 million. TahariASL launched online just this February and was surprised its average online consumer was younger than expected, causing it to make product adjustments such as shorter hemlines.
UK Retail Sales Fall as Cold Weather Curbs Clothing Demand
UK retail sales fell in February after surging the most in more than two years the previous month during post-Christmas sales. The 0.4 percent decline was less than the 0.7 percent drop forecast by economists in a Bloomberg survey. Clothing and shoes fell 0.4 percent, with poor weather delaying purchases of spring and summer attire, the Office for National Statistics said in a report on Thursday.
While the figures show a decline on the month, sales were up 3.8 percent compared with a year earlier. Consumer spending has helped to drive U.K. economic growth amid low inflation and an increase in employment. The Bank of England said on Wednesday household expenditure has remained “resilient” in recent months.
“We doubt that February’s dip in U.K. retail sales is the beginning of a more pronounced slowdown in the pace of the consumer recovery,” said Paul Hollingsworth, an economist at Capital Economics in London. Prospects for the consumer “remain fairly bright” as low energy, fuel and food prices give real incomes a boost, he said. Via bloomberg.com
More than 20% of UK retail sales took place online in February
More than 20% of UK retail sales took place online in February, continuing evidence of a shift towards new patterns of buying, according to just-published figures from the British Retail Consortium.
But while online sales of non-food products grew by 10.7% in February and drove all sales growth during the month, they grew at their slowest rate since last October and below the annual average of 12.9%. At the same time UK retail sales rose by 1.1% on February 20156, or by 0.1% on a like-for-like basis during the month, in which highlights included Valentine’s Day spending.
“Online channels once again played a vital role in driving retail sales in February,” said Helen Dickinson, chief executive of the BRC. “With the online penetration rate standing at 20.4%, February was the third month in a row when online accounted for over one in every five pounds spent on non-food items. Looking at sales of non-food across all channels, on a three-monthly basis, the web’s contribution to growth was an impressive 84%.” via InternetRetailing
GUEST COMMENT: UK e-commerce success and what the future holds
Reports from the Office of National Statistics have positioned the UK as riding the e-commerce wave. Although we’ve seen an increase in e-commerce across Europe, the UK has proved most successful with 79% of Brits ordering online in 2014. This is a significant increase on last 10 years ago, rising from 44% in 2005. On average, a UK online shopper spends more than £6,000 ($8,477) a year online, according to a recent Tryzens study.
Following just behind the UK are Denmark (78%) and Norway (77%), suggesting that Scandinavian retailers are just as insightful when it comes to making the most of online shopping tactics. However, the same year saw only 10% of Romanians and 22% of Italians shopping online, considerably lower than their European counterparts.
Such contrasting statistics beg the question, what can successful online retailers like the Brits and Scandinavians teach other European online retailers about optimising their sales? Via internetretailing.net
Retail Sales Decline in UK Worst Since 1991
The retail industry in the U.K. is experiencing quite a notable slump, the likes of which haven’t been seen in a quarter century.
The Guardian shares that the 3.4 percent decline in clothing and shoe retail sales — which contributed to a 0.4 percent drop in overall sales — that befell Britain in February marked the sixth consecutive month of a downward trajectory in that regard, making it the longest such streak in the country since Oct. 1991.
Among analysts looking for explanations to this negative trend, the U.K.’s Office for National Statistics (ONS), for one, notes that the recent unseasonably warm weather did not help the sales of winter jackets in the country. That, nonetheless, does not provide an answer, notes The Guardian, for the fact that the industry’s troubles go back to last summer. While there had been hopes that the 2.3 percent increase in sales that U.K.’s retail industry experienced in January would turn things around, that turned out not to be the case. Via pymnts.com
Online sales up by 18% in February: IMRG
UK shoppers spent £8.9bn ($12.6bn) online in February, 18% more than they did a year earlier, new IMRG figures suggest.
The growth is the highest seen by the IMRG-Capgemini eRetail Sales Index since June 2015. Driving that growth were online clothing sales, up by 22% on last year – the highest increase since June 2013. Menswear was up by 31%, while accessories were up by 35%, both year-on-year. In electricals, online sales grew by 6% over the year, and fell by 17% on the previous month. Valentine’s Day also brought higher sales, with gift sales up by 6%, year-on-year.
Tina Spooner, chief information officer at IMRG [IRDX VIMR] said: “Following a strong performance in January, UK e-retail sales continued to accelerate last month, resulting in overall year-on-year growth of 16%, year-to-date. Although this is on the back of a relatively weak performance in Q1 2015, the latest results are impressive and are well ahead of our 11% growth forecast for 2016. Via internetretailing.net
Cost of fulfilling online orders set to hit retail profitability over coming decade: report
The cost of fulfilling online orders will hit retail profitability as ecommerce transactions double to 40% of all non-food sales by 2025, a new report suggests. The increasing costs of last mile delivery are expected to hit retailers’ profit margins by 1.5%, the research from OC&C Strategy Consultants suggests.
OC&C says that over the past decade online purchases excluding food fulfilled through delivery and click-and-collect have doubled in value – and they are predicted to double yet again over the next 10 years, while at the same time the overall retail market will grow by a relatively modest 2.2%, from £189bn ($267bn) in 2015 to £230bn ($324.9bn) in 2025. The increase in delivery and click-and-collect, it says, will come primarily at the expense of in-store sales.
The growth has come quickly, according to OC&C’s analysis. In 2005, only 9% of retail sales (£15bn/$21.2bn) were fulfilled through home delivery and less than 1% by click-and-collect. The remaining 91% (£152bn/$214.8bn) of sales were made in store. Last year, 19% (£35.9bn/$50.7bn) of sales were made through delivery, 3% (£5.6bn/$7.9bn) were made though click-and-collect, and 78% (£147.4bn/$208.2bn) in store. Via internetretailing.net
Appeal of online subscription boxes takes off: study
The appeal of online subscription boxes has taken off in the UK, with more than two million Britons visiting the sites each quarter, new research suggests. Visits to subscription box sites, such as Graze [IRDX RGRZ], Loot Box and Gousto, have risen by 155% over the last year, the Connexity Hitwise report suggests.
It found that 2.2m shoppers visit such sites each quarter, with 47% of visitors coming via mobile devices in the 12 weeks to January 23. Almost a third (30.6%) begin their journey on a search engine, although the influence of social media, multimedia and blogs have, says Hitwise, a “disproportionate power” in this category. Visitors are typically women aged between 25 and 34 years old with above-average income.
The report placed Graze, which offers a snack selection by post, at the top of the category, with 927,498 visits in January 2016, followed by Loot Crate (443,297 – boxes for gamers, anime fans or dog owners), Birchbox UK (254,5533 – women’s beauty), Pact Coffee (165,806), Gousto (146,173). Via internetretailing.net
Argos says more than half of £4bn ($5.7bn) sales now made online and more than a quarter via mobile
Home Retail Group today said more than half of its sales were made online in its latest full-year, as it reported double-digit online sales growth at Argos [IRDX RARG] amid what chief executive John Walden described as a “rather eventful period for the group”. M-commerce sales at the general merchandise retailer now account for 28% of all sales – more than £1bn.
Home Retail Group is currently waiting for the outcome of “possible offers” from Sainsbury’s and Steinhoff International for the general merchandise retailer. The deadline for offers is March 18.
This week Home Retail Group said Argos had turned over £4.1bn ($4.7 bn) in the year to February 27, including £515m ($7.3m) in the fourth quarter. Online sales grew by 13% to account for 51% of total Argos sales. At the same time last year, they accounted for 46% of total sales. Mobile sales grew by 15% and represented 28% of total Argos sales, from 25% the previous year, when mobile sales topped £1bn ($bn) for the first time. Overall sales were flat in the full-year and up by 1.9% in the fourth quarter. Via internetretailing.net
French Connection says 23% of revenue from ecommerce and almost half of that from mobile
French Connection [IRDX RFCN] said 23% of its revenue came from ecommerce in its latest financial year. Of that, 48% of sales were over smartphones and tablet computers.
The fashion retailer, a Top100 trader in the IRUK Top500 research, said today that online sales fell in the first half, along with overall revenues – which, at £164.2m ($232m) in the year to January 31, were 8% down on the £178.5m ($252.2m) reported at the same time last year. But the proportion of sales made online stayed flat.
Pre-tax losses came in at £3.5m ($4.9m), up from £1.6m last time. Poor performance of the spring collection, as well as the closure of 13 sales, were said to have contributed to the falling sales, before turnover picked up online and offline at the launch of the winter collection. Like-for-like sales, which strip out the effect of store openings and closures, were ‘poor’. Via internetretailing.net
Ted Baker unveils 45% rise in ecommerce sales
Ted Baker [IRDX RTED] this week reported full-year ecommerce sales of £53.5m ($75.6m), 45% up on the previous year. Online sales now account for 15.4% of retail sales, up from 12% at the same time last year.
Fast growth at home and abroad underpinned the fashion retailer’s growth. Ecommerce, said the retailer, benefited from continued investment in its platform in areas. That investment continues through improvements to design, performance and personalised content, such as local content for European customers. A first language-specific website is to be launched in Germany, sitting alongside international websites that serve the US, Canada and Australia.
The rise came as Ted Baker turned in full-year sales of £456.2m ($644.3m), 17.7% up on the £387.6m ($547.4m) reported at the same time last year, with retail sales of £348.4m ($492m) 13.5% up on last time, while wholesale sales grew by 33.6% to £107.7m ($152.1m), and licensing by 23.3% to £14.4m ($20.3m). Pre-tax profits came in at £58.7m ($82.9m), 20.3% ahead. Via internetretailing.net
Jimmy Choo set for omnichannel rollout as part of ongoing transformation
The roll out is part of a transformation plan that has already seen the launch of a responsive website in the light of the growing number of shoppers buying from their mobile devices. SAP is being implemented across the luxury shoe brand’s business. Through the latest stage of that plan the company is introducing omnichannel systems, with a view to improving product availability and inventory management while boosting client engagement.
The investment comes as the company sees “strong revenue growth” from ecommerce. In the year to December 31, turnover reached £317.9m ($448m) across the company. That’s 6.1% up on the same time last year, taking currency fluctuations into account. Retail sales, of £207.7m (293.3), were 7.7% up on last time. Pre-tax profits came in at £22.1m ($31.2m), from a loss of £8.3m ($11.7m) last time. Via internetretailing.net
Laura Ashley online sales grow by 5.3% to reach £51.1m ($70.8m)
Laura Ashley [IRDX RLAU] today said online sales passed the £50m ($70.6m) milestone in its latest financial year.
Ecommerce sales of £51.1m ($70.8m) were £2.6m ($3.7m), or 5.3%, ahead of the same time last year. Online now accounts for 19.5% of UK retail sales at the fashion to homewares company, a Top100 company in the IRUK Top500.
The udpate came as Laura Ashley reported sales of £289.5m ($408.8m) in the year to January 30. That’s down by 4.6% in total, but up by 4.8% on a like-for-like basis that strips out the effect of store openings and closures. Profits before tax and exceptional items came in at £20.7m ($29.2m), 9.6% down from £22.9m ($32.3m) in last year’s 53-week year. After one-off costs, including an exceptional charge of £1.3m ($1.8m) related to the administration of its Australian licence partner, pre-tax profits of £19.4m ($27.4m) were 17.4% down on last time. Via internetretailing.netthanks so you
Why womens’ apparel brand TahariASL waited to wade into e-commerce
Online sales, at 6% of the luxury market, are expected to climb to 18% of luxury sales by 2025, according to Nathalie Remy, a partner in McKinsey & Co.’s Paris office, and McKinsey’s research shows that 44% of luxury goods buyers research online before buying.
TahariASL has discovered since the website launch in February that its customers, at least those shopping online, are younger than the company had thought, including women buying an outfit for their first job out of college. As a result, the company will make more of certain garments and tweak some designs, such as shortening skirt lengths, Schreiber says.
Reiley, whom the company hired in July 2015 to direct the e-commerce launch, says the brand also plans online exclusives and expanded offerings. She did not disclose numbers, but says sales and site traffic have exceeded expectations. Tahari’s owners spent July 2014 to July 2015 vetting companies to set up the website before deciding on vendor WebLinc’s platform. The company was impressed by WebLinc’s flexibility, including enabling responsive design, a format that adapts the look of a retail website to the device the consumer is using, and its ability to manage the launch and carry it off by the prescribed date, Reiley says. Via internetretailer.com
E-commerce is UK fashion retail bright spot
Despite the challenging in-store retail environment, e-commerce sales for most UK fashion leaders are up and will contribute a growing percentage of annual revenue. Smart retailers will respond by ensuring a consistent omnichannel shopping experience for consumers, smart use of technology for logistics and smooth online and in-store payment systems.