Online sales growth in the UK- official figures

By Simon Dye - Last updated: Friday, July 29, 2016

The UK’s online sales growth figures has been published by the ONS.

The UK's online sales growth figures has been published by the Office of National Statistics.

In the Office of National Statistics (ONS) “Shopping in shops that have no shops” report the ONS debates that arguably the biggest change to shopping in the 20th century was the emergence of supermarkets. For many this made the shopping experience less personal, but as online shopping has become the norm for many in the 21st century, shopping has, to some, become even less personal; in 2008 just 5p of every £1 spent in shops was spent online – by 2015 this had risen to 13p.

So, nearly half of every £1 spent in shops online in 2015 was spent in online stores that have no permanent physical presence on the high street or out of town shopping park. These shops might have a stall sometimes in a market or fair, but that’s it.

This is not a blip – it’s actually a growing trend – up from 41p of every £1 spent in shops online in 2010.

So what does this mean for British shopkeepers? Well, considering that nearly 88% of all shopping in Great Britain in 2015 was done in physical stores it’s clear that the British public are not ready quite yet to move to an exclusively online shopping experience.

However, it could be that some shop types will become more online focused than others in the future, as it does seem that there are some items we are more willing to buy online than others.

Looking at physical shops that also have an online presence, only 4p of every pound spent in shops mainly selling food was spent online, whereas 12p of every pound spent in clothing stores was spent online and 11p of every pound spent in department stores.

This might have something to do with delivery and returns. When ordering food to be delivered you have to ensure you are at home for the delivery – this is not so for clothing items. Also, it can be difficult and time consuming to return food but lots of clothing stores have made it free and very easy to return their products by making it possible to drop packages off at the corner shop for example, or using lockers in supermarkets.

The November effect on UK online shopping sales

One of the most intriguing trends over recent years has been growth of online shopping in November.  There is a spike in our overall spending in online shops in that month.

In 2008, 6% of all shopping in November was carried out online, rising to 16% in November 2015.

While people spend more overall online and in store in December than November, the advent of online sales events like Cyber Monday, which take place in November, and the increasing convenience of online shopping, has seen people seemingly using online buying as a chance to get organised early for Christmas.

The full ONS reports is at: http://visual.ons.gov.uk/shopping-in-shops-that-have-no-shops/

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Half of Argos’ sales now online

By Simon Dye - Last updated: Tuesday, July 19, 2016

Almost half of Argos’ sales are now online with their strongest quarterly digital sales rise for three years.

Almost half of Argos' sales are now online with their strongest quarterly digital sales rise for three years.
Almost half of Argos sales now take place over the internet, the retailer’s parent company has said as it unveiled its strongest quarterly digital sales growth for more than three years.

The Home Retail Group said online sales grew by 16% during its first quarter, and accounted for 49% of sales over that period. That’s up from 44% a year earlier. Mobile commerce sales were the larger part of those online sales, accounting for 29% of total Argos sales.

Argos is currently three and a half years into a transformation plan, launched in October 2012, to make it a digital first retailer.

The rise comes ahead of the planned sale of the general merchandise retailer to Sainsbury’s. This, said John Walden, chief executive of Home Retail Group, was on track to be completed in the third quarter of this year.

Walden said he was pleased with first quarter trading, in a “challenging” and deflationary retail environment.

“Many of the digital capabilities we are building, as we pursue the transformation plan to reinvent Argos as a digital retail leader, are positively impacting our business. Internet sales grew 16% during the quarter, which is our strongest quarterly digital sales growth for over three years.

“Digital sales accounted for almost 50% of total Argos sales in the quarter, including mobile commerce which now represents almost 30% of sales. Argos’ customer experiences overall improved in the quarter, aided by Fast Track, a market-leading national proposition for both same-day home delivery and store collection. Fast Track continues to build momentum and is achieving leading levels of customer satisfaction.”

The update came as Home Retail Group said Argos sales came in at £868 million in the 13 weeks to May 28, 2.6% up compared to the same period last year. Growth came following a number of new store openings during the previous full-year – net space increased by 2.5%.

During the quarter itself, two digital concessions were closed within Homebase stores, the DIY group that Home Retail Group has now sold. Sales reported on a like-for-like basis, which strips out the effect of store openings and closures, were up by 0.1%.

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UK facing digital skills crisis warn MPs

By Simon Dye - Last updated: Thursday, July 7, 2016

Urgent action is needed to deal with the UK’s digital skills crisis warn MPs- or it risks damaging the country’s productivity and competitiveness.

Urgent action is needed to deal with the UK's digital skills crisis warn MPs- or it risks damaging the country's productivity and competitiveness.It is thought 12.6 million adults lack basic digital skills, while 5.8 million have still never used the internet at all.

“Stubborn digital exclusion and systemic problems with education and training need to be urgently addressed”, the report said.

It urged the government’s digital strategy to be published without delay.

The report found that:

“Digital exclusion has no place in 21st Century Britain,” the Commons Science and Technology Committee said.

“While the government is to be commended for the actions taken so far, stubborn digital exclusion and systemic problems with digital education and training need to be addressed as a matter of urgency in the government’s forthcoming digital strategy,” it continued.

The report calls for businesses to invest more and better training at all levels of education.

“The UK leads Europe on tech, but we need to take concerted action to avoid falling behind. We need to make sure tomorrow’s workforce is leaving school or university with the digital skills that employers need,” said the committee’s chairwoman, Nicole Blackwood.

In response a government spokesperson said: “This government recognises the crucial role digital skills play in our society and economy. Our Digital Strategy, to be published shortly, will set out how we will help employers and individuals access the tools they need to power our digital economy.

“This will make sure we are well placed to remain a tech leader in Europe. We will consider the Select Committee’s report and respond in due course,” they added.

The Science and Technology Committee says there is no single definition of what a Digital Skill actually is, but is generally understood to be the ability to use computers and digital devices to access the internet, the ability to code or create software and the ability to critically evaluate media, and “to navigate knowingly through the negative and positive elements of online activity and make informed choices about the content and services they use”.

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55% of Ocado transactions now mobile

By Simon Dye - Last updated: Thursday, June 30, 2016

Ocado said that more than half of its orders were checked out using mobile devices, as it reported double digit sales growth.

Ocado said that more than half of its orders were checked out using mobile devices, as it today reported double digit sales growth in its latest half year figures.Some 55% of Ocado orders were checked out using a smartphone or tablet computer in the 24 weeks to May 15.

Over the same period, said the online grocer, sales of £582.9 million were 13.9% up on the same time last year. Pre-tax profits climbed to £8.5 million from £7.2 million last time. However, the average Ocado.com basket declined in value by 2.2% to £110.10, as a result of price deflation.

More than half of sales came from customers who have an Ocado Smart Pass – a membership scheme that includes free delivery. “Membership,” said chief executive Tim Steiner in his statement, “helps to drive customer loyalty, shopping frequency and ultimately total spend per customer.”

Chief executive Tim Steiner said he had been encouraged by steady progress in the business “The market remains competitive with ongoing price deflation but our increasing scale and operational efficiencies meant that we still grew profits, albeit at a slower rate.”

“We have been gaining share in the online grocery market and expect this to continue. The last few years have shown beyond doubt that British shoppers are choosing the benefits of grocery shopping online and we believe that the momentum of channel shift away from bricks and mortar stores will continue. The more opportunities customers have to try grocery shopping online, the more they will be attracted to Ocado’s superior customer offer.”

Making no reference to the EU referendum, he added: “Sales growth continues at pace and the productivity of our operations is improving. We have the technology, the brand and the financial resources to build on our leading position and look forward to the future with confidence.”

Ocado said its beauty business, in partnership with Marie Claire, was now expected to launch in the second half of this year. “We believe the high quality of service delivered by our technology and logistics platform combined with the awareness and relevance of the Marie Claire brand, should make this an attractive shopping destination for customers,” said Steiner.

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UK facing digital skills crisis warn MPs

By Simon Dye - Last updated: Wednesday, June 15, 2016

Urgent action is needed to deal with the UK’s digital skills crisis, warn MPs- or it risks damaging the country’s productivity and competitiveness.

Urgent action is needed to deal with the UK's digital skills crisis, warn MPs- or it risks damaging the country's productivity and competitiveness
It is thought 12.6 million adults lack basic digital skills, while 5.8 million have never used the internet at all.

“Stubborn digital exclusion and systemic problems” with education and training need to be urgently addressed, the report said.

It urged the government’s digital strategy to be published without delay.

The report found that:

“Digital exclusion has no place in 21st Century Britain,” the Commons Science and Technology Committee said.

“While the government is to be commended for the actions taken so far… stubborn digital exclusion and systemic problems with digital education and training need to be addressed as a matter of urgency in the government’s forthcoming digital strategy,” it continued.

The report calls for businesses to invest more and better training at all levels of education.

“The UK leads Europe on tech, but we need to take concerted action to avoid falling behind. We need to make sure tomorrow’s workforce is leaving school or university with the digital skills that employers need,” said the committee’s chairwoman, Nicole Blackwood.

In response a government spokesperson said: “This government recognises the crucial role digital skills play in our society and economy. Our Digital Strategy, to be published shortly, will set out how we will help employers and individuals access the tools they need to power our digital economy.

“This will make sure we are well placed to remain a tech leader in Europe. We will consider the Select Committee’s report and respond in due course,” they added.

The Science and Technology Committee says there is no single definition of a “digital skill” but it is generally understood to be the ability to use computers and digital devices to access the internet- the ability to code or create software and the ability to critically evaluate media, and “to navigate knowingly through the negative and positive elements of online activity and make informed choices about the content and services they use”.

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Web firms pledge to tackle online hate speech

By Simon Dye - Last updated: Sunday, June 5, 2016

Microsoft, YouTube, Twitter and Facebook have pledged to remove hate speech within 24 hours, in support of a code of conduct drafted by the EU.

Microsoft, YouTube, Twitter and Facebook have pledged to remove hate speech within 24 hours, in support of a code of conduct drafted by the EU.The freshly drafted code aims to limit the viral spread of online abuse on social media.

It requires the firms to act quickly when told about hate speech and to do more to help combat illegal and xenophobic content.

The firms must also help “educate” users about acceptable behaviour.

The need for better ways to combat online hate speech had become more urgent in the wake of terror attacks in Belgium, said Vera Jourova, European Commissioner for Justice.

“Social media is unfortunately one of the tools that terrorist groups use to radicalise young people and racists use to spread violence and hatred,” she said in a statement.

Hate speech and xenophobia also had a “chilling effect” on groups that sought to champion tolerance and non-discrimination, she said.

The agreement of the web firms was an “important step forward” in making sure the net stayed a place where free expression was possible, Ms Jourova said.

A core part of the code is the requirement to remove hateful content within 24 hours of being properly notified about it.

The tech giants have also agreed to work more closely with groups that monitor and flag violent and hateful content. They will also develop and promote “counter narratives” to challenge those who post hate speech or illegal content.

Karen White, Twitter’s head of public policy for Europe, said “hateful conduct” had no place on its network and added there was a “clear distinction between freedom of expression and conduct that incites violence and hate”.

The code also requires the firms to overhaul their notification systems to ensure people can quickly report inflammatory content when they find it.

The Commission will hold regular meetings with technology firms to monitor what effect the code of conduct is having. A preliminary assessment of its effectiveness will be drawn up for the Commission’s high level group on combating racism and xenophobia by the end of 2016.

The code of conduct for net firms was one of several initiatives to tackle abuse online, the Commission said. Other work involves research to help ISPs assess information posted online and produce tools that can counter intolerance.

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Three quarters of UK Internet retailers top100 don’t follow up abandoned carts

By Simon Dye - Last updated: Wednesday, May 25, 2016

Almost three quarters of the UK’s top 100 internet retailers didn’t follow up on abandoned carts in a test that could potentially lose them significant sales.

Almost three quarters of the UK's top 100 internet retailers didn’t follow up on abandoned carts in a test that could potentially lose them significant sales.

Customer engagement specialists Optilead analysed the leading 100 UK retailers, as defined by IRUK Top500 research, and found that 74 did not follow up on cart abandonment.

Each of the sites was tested three times, with items added to the cart or basket, filling out the visitor’s details, but abandoning the cart before payment details were completed. This, said Optilead, gave retailers the opportunity to retarget the visitor using the contact details provided.

In total, researchers abandoned products worth £172,000 – or £574 for each basket.

That, says Optilead, is a significant amount, in the context of Centre for Retail Research figures that suggest UK online shoppers will spend an average of £1,311 online this year.

In all, 26 companies responded to the tests – all via email. It received 56 responses from 300 tests. Thirteen companies followed up on all three occasions, and response times averaged 21 hours and 46 minutes.

“After this amount of time in today’s competitive online landscape,” said Marc Pearce, multichannel marketing manager at Optilead, “consumers are highly likely to have visited a rival website – and may have already completed their purchase.”

He added: “Having a real time solution in place is vital to engage with online prospects immediately. But what’s most important for retailers is the ability to harness the tools available to connect with prospects depending on each opportunity’s value.”

“For instance, high-value leads should be followed up instantly with a phone call, email should be utilised to engage with lower-value leads and SMS is fantastic to touch base, offer discount codes or confirm order and delivery statuses.”

He said that Optilead’s own experience suggested the best time to contact a prospect was within 15 minutes of abandonment. “With the lowest response time in these 300 tests being 29 minutes – and the highest four days and 21 minutes – none of the IRUK Top100 engaged within this vital time frame.”

But, he said, 46% of retailers that responded to at least one of the tests did not do so when higher value tests were carried out.

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Many UK urban areas fail superfast broadband test

By Simon Dye - Last updated: Sunday, May 15, 2016

Tests on 42 towns and cities across the UK suggest almost half have average broadband speeds below 24Mbps.

Tests on 42 towns and cities across the UK suggest almost half have average broadband speeds below 24Mbps.
Hull, with an average of 12.4Mbps, is the UK’s slowest city, according to comparison site uSwitch, which conducted the tests.

London and Edinburgh had average speeds of 22.4Mbps and 21Mbps respectively.

These speeds are likely to be low not because of lack of availability but because people have chosen not to take up faster services.

Government figures suggest superfast broadband – 24Mbps or higher – is now available to more than 90% of homes and businesses, with funding pledged to bring that total to 95% by 2017.

According to BT, its fibre services are available to 24 million home, but only 22% (5.5 million) have connected to them.

Hull is the only UK city not served by BT’s Openreach, which controls the telecoms network. Hull’s independent supplier, KCOM, disputed the findings.

“We’re rolling out ultrafast fibre to the home across Hull and East Yorkshire, which means speeds of 250Mbps are available to consumers right now,” said a KCOM spokesman. The company says it is connecting “a new customer to fibre every 30 minutes”.

Three in 10 tests logged speeds of less than 5Mbps with just one in 10 registering speeds of above 50Mbps, according to the data.

The faster top 10:
Middlesbrough – 34.4Mbps
Belfast – 34.3Mbps
Brighton – 33.8Mbps
Swindon – 31.8Mbps
Nottingham – 30.4Mbps
Cardiff – 30.2Mbps
Bristol – 28.6Mbps
Huddersfield – 27.7Mbps
Plymouth – 27.3Mbps
Southampton – 27.0Mbps

The slowest bottom 10:
Hull – 12.4Mbps
Aberdeen – 15.6Mbps
Milton Keynes – 17.1Mbps
Wakefield – 17.4Mbps
Sheffield – 18.3Mbps
Doncaster – 18.3Mbps
Norwich – 19.4Mbps
Edinburgh – 21.0Mbps
Newcastle – 21.1Mbps
Newport – 21.2Mbps

We should be asking what more can be done to encourage the adoption of superfast broadband now it’s so widely available.

The UK’s towns and cities should be leading the charge when it comes to broadband speeds, yet just 22 cities have broadband users with average speeds of more than 24Mbps.

Those who just use the Internet for the occasional catch-up TV programme, email and Facebook, broadband speed is not really a priority, especially when the fastest services can cost considerably more.

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Internet Of Things- how to use IoT to make sales

By Simon Dye - Last updated: Friday, May 6, 2016

How brands will use the Internet of Things (IoT) to develop their customer relationships.

How brands will use the Internet of Things (IoT) to develop their customer relationshipsThe Internet of Things  will soon become a significant channel through which brands will be able to create and deepen relationships with their customers, a new Forrester report suggests.

Tens of billions of IoT sensors will appear, embedded in connected objects such as an Miele oven, connected using Microsoft technoloy, in the next five to 10 years, predicts the report, The Internet of Things redefines brand engagement.

As a result, it says, marketers will need to develop experiences rather than managing products – a process to which mobile smart phones will be key.

“Reports of IoT killing mobile are greatly exaggerated, if not completely inaccurate,” said report author and Forrester analyst Thomas Husson. “Instead, brands need to define engagement scenarios where smartphones are the primary interface and remote control of connected experiences.”

Forrester predicts that this year, a third of US online adults will use some form of IoT whether at home, through wearables or in their car. But adoption of connected devices in smart homes or cars is still low, especially in Europe.

The findings show that as yet only 4% of UK online adults use their mobile or tablet to control or monitor home utilities or appliances.

As yet, IoT based marketing to consumers is still limited, but Husson suggests in the report that this industry will enable marketers to listen to consumers and analyse their real behaviours, interact with consumers more frequently and in a more intimate way, as well as differentiating their customer experiences.

They will also be able to build new offerings and business models.

The key to doing that, argues Husson, is by delivering utility through the IoT – and marketers must improve their skills before they can do that. That includes the challenges of using data to put customer behaviour in context and keep control of the customer relationship.

Privacy and security must be a differentiator, while design thinking will help marketers to move from products to experiences.

Given that many IoT designers and system builders are more concerned about interconnections, customer security will become a key concern.

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Music streaming increases sales of vinyl records

By Simon Dye - Last updated: Wednesday, April 27, 2016

Music streaming sites are helping to drive sales of vinyl records, new research suggests.

Music streaming sites are helping to drive sales of vinyl records, new research suggests.Half of consumers say they listened to an album online before buying a vinyl copy, according to an ICM poll, shared with the BBC.

The behaviour is more common for people who use ad funded services such as SoundCloud or YouTube, suggesting free music can drive real world sales.

Maybe surprisingly, 48% of people who bought vinyl last month admit they have yet to play it. Seven per cent of those surveyed say they do not even own a turntable.

Younger fans increasingly discover on digital but collect on vinyl.  Others say they buy records to support their favourite artists, while 50% of consumers identify themselves as “collectors”.

The resurgence in vinyl during a period of declining sales has been one of the music industry’s more surprising success stories.

In 2014, 2.1 million LPs were purchased by music fans as demand increased for an eighth successive year – climbing 64% to a 21-year high.

Official Charts Company figures suggest the rise has continued in 2016, with 637,056 records sold in the first three months of the year, accounting for almost 3% of the UK music market.

Adele’s 25 was the biggest selling album on vinyl last year, followed by Amy Winehouse’s Back To Black

The vinyl revival has been spurred by Record Store Day – which started nine years ago as a means of supporting independent music retailers.

This year’s event took place on Saturday 16 April and sees record shops around the UK stocking thousands of one-off records.

There were vinyl releases from artists including Justin Bieber, Abba, David Bowie, Alan Partridge, Foals, Chase & Status and the Dead Kennedys.

But the ICM Unlimited research shows that the majority of music (73%) is now bought online, with Amazon emerging as the top retailer, accounting for 27% of all sales.

Apple’s iTunes store is next, with an 18% market share, followed by supermarkets (10%) and high street record stores (7%).

Men are more likely to visit a bricks and mortar record shop than women, the figures suggest, but there has been an increase in the number of women buying vinyl.

“About 8% of men have bought vinyl in the last month, and that’s been fairly constant over the last three of four years,” says Andrew Wiseman, head of ICM Unlimited.

“Back in 2013, only 3% of women bought vinyl and that’s risen to 5% in the last year – so we’re starting to see that gap close.

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