Archive for April, 2011


Online retail is growing six times faster than high street sales and on course to reach £37bn a year by 2014, a recent survey has found.

The phenomenal growth is said to be heavily affecting high street retailers who continue to struggle in the aftermath of the recession, with 40,000 shops closing in the last 10 years.

The Webloyalty Online Retail Report by Verdict Research counted smartphones as one of the main reasons for the rapid growth in online sales as customers place orders on their handsets on-the-go. The report predicts that current internet spending will grow by £14bn from 2010 to 2014.

A little over half UK consumers currently use their mobiles during the purchasing process, with this expected to reach 80 percent, according to the research.

Neil Saunders, an analyst at Verdict said: “Shoppers after a better deal will use their mobile to compare and find prices.

“Retailers that survive on the high street will be those that combine their online stores with mobile apps that offer shoppers a better deal using location-based offers.”

He continued, saying that almost half of all Brits own a smartphone – which will be how shoppers locate and compare the best prices in the near future.

High street retailers including Woolworths, Etam, Littlewoods and Zavvi have already moved their businesses online after their stores were closed following dramatic drops in sales and expensive overheads.

Please note the views expressed in this blog are the views of the author, Andre Brown and do not represent the view of Locayta, its employees or its shareholders. For more information about Locayta, visit www.locayta.com

Recent research by IAB UK has found that smartphone ownership increased by 70 per cent between 2009 and 2010. IMS research suggests that smartphone shipments to Europe will top 200m within four years.

2010 was the year that retailers began to take mobile commerce seriously, with an increasing number of dedicated mobile commerce sites and apps being developed to attract the everyday smartphone user.

Simpson Carpenter earlier this year surveyed 1,100 smartphone owners to get a better idea of what physical products they are buying from their handsets, attitudes to mobile shopping and if they see themselves continuing to shop in this way.

The research found that mobile shoppers were highly satisfied with the process of shopping on their smartphone. More than a quarter (27%) of those surveyed have bought items including CDs, books, DVDs, clothes, hotel rooms, groceries and large appliances, while almost half (48%) expected to do so in the next 12 months. The area of fastest growth in the coming year were expected to be hotel rooms, large appliances and groceries.

Despite many people assuming that mobile commerce refers to mobile phones, only one third of buyers were actually shopping on the move, the remainder buying via a phone in a situation where they could have used a PC: 43% were at home, 13% at work and 10% at a friends house.

When asked what the biggest barriers to switching to mobile commerce as a regular means of purchasing, almost half (43%) said the small screen was a challenge, while a similar number (41%) said that the clarity of images can often be a problem. Connection speed (31%) and navigation and usability (28%) were also seen a issues, while just over one quarter (26%) admitted to concerns around the security of their financial details when buying via a smartphone.

The appetite for mobile commerce is certainly there… it remains a matter of time before the issues are a thing of the past and people become more likely to shop on their handsets regularly.

Please note the views expressed in this blog are the views of the author, Andre Brown and do not represent the view of Locayta, its employees or its shareholders. For more information about Locayta, visit www.locayta.com

Consumer spending habits have changed significantly over the last 12 months a recent survey has found.

R3, the trade body for insolvency professionals, found that just over half (51%) of the population are spending less on non-essential items such as clothes and DVDs, while 47 per cent have said they now shop around to find the best deals.

Just over one fifth (22%) admitted that they no longer look to specialist stores for non-essential items and will now buy these from supermarkets.

Frances Coulson, R3 President, said: “People are uncertain about what the future holds financially and the most natural response to this is to be cautious. We are seeing households tightening their domestic belts and looking for ways to reduce monthly outgoings.

“In these instances non-essentials are the first to go. However, it’s clear from the results that for those who do not wish to go without their non-essentials the supermarkets seem to be offering the best deals.”

Women have been more cautious with their spending than men, with 42 per cent saying they have switched to value or own brands in the last 12 months compared to 32 per cent of males.

More than 40 per cent of women said they were now using vouchers when shopping, whereas only 31 per cent of men have, while 23 per cent of women are setting themselves budgets compared to only 15 per cent of males.

Coulson continued: “It is encouraging to see that a considerable percentage of people are actively trying to lower their expenditure as this will help them to live within their means. However, it is a shame that budgeting remains quite low down on people’s agenda.

“Setting a budget enables you to clearly see how much you spend against your income. A budget is probably the most powerful financial weapon in the fight against debt and its value should not be underestimated.”

Please note the views expressed in this blog are the views of the author, Andre Brown and do not represent the view of Locayta, its employees or its shareholders. For more information about Locayta, visit www.locayta.com

Retail sales increased by both value and volume in March, the Office of National Statistics (ONS) has announced.

Data from the government organisation shows that,             excluding petrol, the value and volume of sales grew 2.9 per cent and 0.9 per cent year-on-year, despite recent figures from the British Retail Consortium (BRC) to the contrary.

The BRC-KPMG Retail Sales Monitor of March suggested that annual sales for the month dropped further than they ever had in the 16 years since it began recording the figures.

Non-food sales were up by volume on the same month last year but food sales fell slightly.

Sales for the non-store retailing sector, which includes goods purchased online and via channels such as catalogues and Television, were 13.1 per cent higher than a year ago.

Part of the reason for the difference in results is that the ONS’s data is seasonally adjusted but the BRC’s isn’t.

Please note the views expressed in this blog are the views of the author, Andre Brown and do not represent the view of Locayta, its employees or its shareholders. For more information about Locayta, visit www.locayta.com

UK fashion retailer Republic has become the latest high street chain to join up to the Facebook Deals initiative.

Facebook Deals allows users of the social network to access special promotions and exclusive offers when they ‘check-in’ on their mobile phones whilst in one of Republic’s stores.

Debenhams and Argos are two of the bigger names who have already signed up to the promotion, and it is expected that Republic will fare well given its Facebook fan base of 43,000.

Natalie Primus, Head of Social Media, Republic, said: “We wanted to drive increased and repeated footfall by rewarding and incentivising our customers – Facebook Deals allows us to do this quickly and efficiently.”

In the launch phase, discounts of up to 20 per cent, which can be redeemed immediately at point of sale once in store will be available to Republic customers using the service.

This is not the first move by Facebook to revolutionise the online retail and m-commerce sectors, with ASOS launching a fully integrated Facebook Store earlier this year.

Please note the views expressed in this blog are the views of the author, Andre Brown and do not represent the view of Locayta, its employees or its shareholders. For more information about Locayta, visit www.locayta.com

High street retailers Dune and HMV have become the latest companies to launch retail platforms using Facebook.

Both companies have launched Facebooks stores to try and connect with customers where they are spending most of the their time online, following in the footsteps of other big name brands such as ASOS, Best Buy, French Connection and Interflora.

Although neither store allows customers to buy products directly on the Facebook platform, users can browse for their favourite products and add to a shopping basket, then directed to the brand sites for payment – both companies have said they plan to introduce payments from the platform in the future.

Rob Bostock, head of ecommerce, Dune Group, said the retailer was seeing good conversion rates following the launch, with clicks to purchase consistently above four per cent.

“We haven’t pushed it yet because we want our customers to discover it themselves, but it’s converting really well already,” he said. “If we find customers continue to want to shop this way, we’ll move towards transactions within Facebook.”

HMV is currently using the store to showcase the most popular items on sale and not its entire back catalogue or ticket sales.

Matt Potter, online content manager, HMC, said it’s performing well after just three weeks, but he wasn’t yet persuaded enough to add the full product range. “It’s not huge but were seeing t work already,” he said. “For big-ticket events, the most important place to announce is via Facebook, but we link back to the site because they go so quickly. We don’t want to give our Facebook followers a worse experience.”

Best Buy is one of the bigger players on Facebook, but has already said it is looking at ways to integrate social media with its own ecommerce site.

In March 2011, the retailer launched a dedicated Monster Beats by Dr Dre shop on bestbuy.co.uk, which integrates user comments with content, and lets users click to buy from the rapper’s headphone range.

Given the recent poor footfall on the high street and with retail sales rates dropping at their fastest in six years, it seems logical that many retailers are looking for alternate revenue streams and are continually looking to find where potential customers are.

Please note the views expressed in this blog are the views of the author, Andre Brown and do not represent the view of Locayta, its employees or its shareholders. For more information about Locayta, visit www.locayta.com

Using online price comparison sites like confused.com is becoming an increasingly integral part of the shopping process for consumers in the UK, a recent study has found.

A study from Lightspeed Research found that 75% of the 1,000 18 to-64 year olds surveyed have compared prices online ahead of making a purchase in the last six months.

Only 13% said they had no conducted any pre-purchase research, price comparison or looked at online reviews in the last six months before buying a product, online or on the high street.

The research found that there was not any particular retail sector that consumers chose to use price comparison sites with it being a popular choice for almost all sectors, wit Lightspeed finding that people are likely to go through this process when buying expensive items like personal technology or white goods, as well as smaller items like clothes and books.

When asked what influenced people’s purchasing decisions online, one quarter of respondents said they change their minds about buying a product or service after reading two bad reviews. Almost half (39%) said it would take three negative reviews for them to opt against making a purchase.

Somehwhat surprisingly, Social Media is not deemed to play as big a part as some industry commentators might suggest, with only 17% of those surveyed indicating it was important that social network ‘friends’ gave products they were interested in a good review.

Ralph Risk, Marketing Director, Lightspeed Research, said : “Brands need to be aware of the influence that online reviews have, both positive and negative.

“There is a real danger that companies will focus on social media because it is so popular and in doing so miss out on the opinions that consumers actually value.”

Please note the views expressed in this blog are the views of the author, Andre Brown and do not represent the view of Locayta, its employees or its shareholders. For more information about Locayta, visit www.locayta.com

The increasing focus on m-commerce from businesses such as France Telecom Orange, O2 parent firm Telefonica and Google is fuelling demand for near-field communication (NFC)-enabled smart phones.

A recent report by Juniper Research found that around one in five smartphones will have an NFC contactless capability by 2014, equating to almost 300 million handsets offering the technology.

The NFC Retail Marketing & Mobile Payments Report also suggested that growth will be driven in the interim by mobile network operators launching NFC-capable services in 20 early adopting countries before the end of 2012.

Several retailers in the UK have already trialled contactless technology in their stores over the past 12 months, including Spar and the Co-op, with companies seeing the technology as a logical way of reducing queuing time and increasing security at point of sale.

Later this year O2 will be launching a mobile wallet payment application that will support NFC, and the firm is seeking an e-money operating licence from the FSA, which would pave the way for peer-to-peer money transfers.

Juniper’s research was not all positive, with the report warning that business model structures still requiring development before NFC services can hope to achieve a critical mass.

By 2014, it is anticipated that North America will account for 50% of all NFC-enabled smart phones, followed closely by Western Europe as the second largest adopter of the technology.

Howard Wilcox, author of the report, said “Juniper’s market analysis highlighted that, although there are still hurdles ahead, NFC prospects have been boosted by the succession of mobile operators and device vendor announcements.”

Please note the views expressed in this blog are the views of the author, Andre Brown and do not represent the view of Locayta, its employees or its shareholders. For more information about Locayta, visit www.locayta.com

Despite the apparent failings of the high street in the first quarter of 2011, online sales increased by 18% during the first three months of this year, research by IMRG-Capgemini has found.

The IMRG-Capgemini e-Retail Sales Index found that e-tail trading in the UK grew at its fastest rate in the first quarter since 2008, with March spending alone reaching £5.1bn.

Clothing accessories was the big winner in online sales for the month of March, up 21% month-on-month and a colossal 59% year-on-year, whilst Health & Beauty products increased by 32% compared with March 2010.

Tina Spooner, Director of Information, IMRG, said “The index reveals an encouraging performance for the e-retail market during March and confirms that online continues to be the beacon for the UK retail market during these tough economic conditions, with the high street suffering its worst drop in sales in 15 years during the same period.

“The 18 per cent annual growth recorded in the first quarter of 2011 is in line with our prediction for the year.”

Further research from the British Retail Consortium and KPMG found that overall UK trading fell by 3.5% in March, the worst year-on-year performance in retail sales since 1995.

Online sales for this period increased by 14%, equating to an average online spend of £82 per person.

Please note the views expressed in this blog are the views of the author, Andre Brown and do not represent the view of Locayta, its employees or its shareholders. For more information about Locayta, visit www.locayta.com

Sales of online retail in UK reached £4.3bn in 2010, an increase of 152% in the last five years, a recent study has found.

Research from Mintel estimates that the online retail market will continue to grow by as much as a further 45% by 2015, reaching  £6.9bn, with online trading in fashion items expected to reach in excess of  £4.8bn in 2011.

Capgemini and IMRG’s results for March 2011 showed fashion to be the stronget e-tail sector, while Mintel’s research suggests that online fashion out-performed every other sector throughout the whole of 2010.

Fashion retailers including H&M, Gap and Zara all opened transactional websites in 2010, a sure sign that the market is becoming more and more important to the wider retail sector.

Mintel found that more than half of those surveyed (58%) were nervous of buying from websites they were unfamiliar with. Social Media was also considered to be of growing importance to the sector, with three in 10 likely to leave reviews on websites and more than half (57%) admitting to using customer feedback via reviews before make any purchasing decisions.

Tamara Sender, Senior Fashion Analyst, Mintel, said “While the recession and stabilisation of the rise in internet penetration has impacted the online fashion market, sales of online fashion continue to grow.

“The market received a boost as several high street fashion retailers enveloped their online channels at the end of 2010, with leading high street retailers launching websites and other online retailers entering the fashion market.”

Please note the views expressed in this blog are the views of the author, Andre Brown and do not represent the view of Locayta, its employees or its shareholders. For more information about Locayta, visit www.locayta.com