Table of Contents
Overview
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- What you need to know
- Products covered in this Report
Executive Summary
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- The market
- Spending grows strongly driven by household appliances
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- Figure 1: Consumer spending on all electrical products: market size and forecast (including VAT), 2013-23
- Real incomes grow but uncertainty remains
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- Figure 2: Real wage growth: wages growth vs inflation, January 2014-December 2018
- Specialists have continued to see their share of spending fall
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- Figure 3: Electrical goods specialists sector sales (including VAT), 2013-18
- Online-only retailers the main benefactors to specialists’ troubles
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- Figure 4: Estimated distribution of spending on electrical goods, 2017 and 2018
- Leading retailers
- Dixons Carphone the market leader, but Amazon is gaining share
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- Figure 5: Estimated market shares of the leading specialist and non-specialist retailers of electrical goods, 2018
- Over half of spending comes online, and the share continues to grow
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- Figure 6: Estimated online share of all consumer spending on electrical goods, 2014-18
- Amazon brand scores high on trust
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- Figure 7: Attitudes towards and usage of selected brands, December 2018
- The consumer
- Three quarters purchased electricals in the past year
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- Figure 8: Types of electrical products purchased in the past 12 months, November 2018
- More purchased electricals online in the last year than in-store
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- Figure 9: How consumers purchased electrical goods, November 2016-18
- Most online purchases still come through desktops
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- Figure 10: How consumers purchased electrical goods online, November 2018
- Specialists just edge out online-only retailers overall, but Amazon is most popular
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- Figure 11: Retailers used to purchase electrical goods in the last 12 months, November 2018
- Satisfaction levels are high, but there are concerns for store-based players
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- Figure 12: Satisfaction with the retailer last used to purchase electrical goods, November 2018
- In-store service still key despite the shift to online
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- Figure 13: Attitudes towards in-store service at electrical retailers, November 2018
- Electricals most purchased category during Black Friday 2018
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- Figure 14: Products purchased during Black Friday 2018, December 2018
- What we think
Issues and Insights
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- Does Alex Baldock’s future for Dixons stack up?
- The facts
- The implications
- Is there a ceiling for online penetration in the market?
- The facts
- The implications
The Market – What You Need to Know
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- Real incomes grow but uncertainty remains
- Spending grows strongly driven by household appliances
- Specialists have continued to see their share of spending fall
- Online-only retailers the main benefactors to specialists’ troubles
Market Drivers
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- Collapsing specialist computer and telecoms retail sales value growth
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- Figure 15: Annual % change in all retail sales, electrical household appliance specialists and computers & telecoms equipment specialists, non-seasonally adjusted value series, January 2017-December 2018
- Electrical household appliances retail sales volume holding steady
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- Figure 16: Annual % change in all retail sales, electrical household appliance specialists and computers & telecoms equipment specialists, non-seasonally adjusted volume series, January 2017-December 2018
- Headline inflation at its lowest level in two years, but electrical prices remain volatile
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- Figure 17: Price inflation: annual rate of change in core electrical categories, by month, 2018
- Household appliances prices up 5.5% in 2018
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- Figure 18: Price inflation: annual rate of change in core electrical categories, 2012-18
- Pay growth outstripping inflation
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- Figure 19: Real wage growth: wages growth vs inflation, January 2016-January 2019
- Willingness from consumers to take on retail credit
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- Figure 20: Value of retail store and online credit, 2012-17
- Economic uncertainty impacting the property market
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- Figure 21: Number of property residential transactions with a value of over £40,000 completed in the UK, July 2017-December 2018
- Property transactions at their lowest level for five years
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- Figure 22: Number of property residential transactions with a value of over £40,000 completed in the UK, 2006-18
- Own outright and private renting both rising
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- Figure 23: UK households, by tenure, 2012-17
Market Size and Forecast
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- Consumer spending on electricals continues to grow in double digits
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- Figure 24: Consumer spending on all electrical products: market size and forecast (including VAT), 2013-23
- Figure 25: Consumer spending on all electrical products: market size and forecast (including VAT), in current and constant prices, 2013-23
- Segment forecasts
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- Figure 26: Core electrical goods segments as a percentage of the total market, 2013-18
- Household appliances
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- Figure 27: Household appliances: segment size and forecast (including VAT), 2013-23
- Figure 28: Household appliances: segment size and forecast (including VAT), in current and constant prices, 2013-23
- Computing and telecoms
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- Figure 29: Computing and telecoms goods: segment size and forecast (including VAT), 2013-23
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- Figure 30: Computing and telecoms goods: segment size and forecast (including VAT), in current and constant prices, 2013-23
- Audio-visual and photographic goods
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- Figure 31: Audio-visual and photographic goods: segment size and forecast (including VAT), 2013-23
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- Figure 32: Audio-visual and photographic goods: segment size and forecast (including VAT), in current and constant prices, 2013-23
- Personal care appliances
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- Figure 33: Personal care appliances: segment size and forecast (including VAT), 2013-23
- Figure 34: Personal care appliances: segment size and forecast (including VAT), in current and constant prices, 2013-23
- Forecast methodology
Specialist Sector Size
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- Specialist share of spending continues to slide
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- Figure 35: Electrical goods specialists sector sales (including VAT), 2013-18
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- Figure 36: Electrical goods specialist sector sales (including and excluding VAT), 2014-19
- Sales peak around Black Friday
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- Figure 37: Average weekly retail sales in the electrical household appliance specialists and computers and telecommunications specialists categories, October 2017-December 2018
- Specialist sector much reduced over the past decade, but still alive
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- Figure 38: Electrical specialists enterprise numbers, 2008-17
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- Figure 39: Number of retail outlets, 2013-18
Channels of Distribution
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- Online-only retailers continue to grow their share of the market
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- Figure 40: Estimated distribution of spending on electrical goods, 2017 and 2018
The Consumer – What You Need to Know
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- Three quarters purchased electricals in the past year
- More purchased electricals online in the last year than in-store
- Most online purchases still come through desktops
- Specialist edge out online-only retailers overall, but Amazon is most popular
- Satisfaction levels are high, but there are concerns for store-based players
- In-store service still key despite the shift to online
- Electricals most purchased category during Black Friday 2018
Electricals Purchased
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- Figure 41: Types of electrical products purchased in the past 12 months, November 2018
- Changes in purchasing
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- Figure 42: Types of electrical products purchased in the past 12 months, November 2016-18
- Repertoire of products purchased in the last year
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- Figure 43: Repertoire of products purchased in the past 12 months, November 2018
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Online vs In-store Purchasing
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- Online the dominant channel in the purchase of electricals...
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- Figure 44: How consumers purchased electrical goods, November 2018
- ….and this is a trend that is only increasing
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- Figure 45: How consumers purchased electrical goods, November 2016-18
- Opportunity for physical retailers to better engage with younger consumers
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- Figure 46: How consumers purchased electrical goods, by age, November 2018
How They Purchase Electricals Online
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- Most online purchases still come through laptops/desktops…
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- Figure 47: How consumers purchased electrical goods online, November 2018
- Younger consumers far more comfortable purchasing electricals via mobile
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- Figure 48: How consumers purchased electrical goods online, November 2018
- Most mobile purchases come through websites
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- Figure 49: How electrical buyers shopped via mobile devices in the last 12 months, November 2018
Retailers Used
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- Specialists remain the most popular destination overall to buy electricals
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- Figure 50: Types of retailers used to purchase electrical goods in-store/online in the last 12 months, November 2018
- However it is Amazon that comes out on top
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- Figure 51: Retailers used to purchase electrical goods in the last 12 months, November 2018
- As a group, Dixons Carphone speaks to a wide audience
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- Figure 52: Average age and socio-economic group of leading electrical retailer’s customer bases, November 2018
- Currys dominates physical whilst Amazon leads digital
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- Figure 53: Retailers used to purchase electrical goods in-store in the last 12 months, November 2018
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- Figure 54: Retailers used to purchase electrical goods online in the last 12 months, November 2018
- Most shop with a single retailer, irrespective of channel
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- Figure 55: Repertoire of retailers used to purchase electrical goods in the past year, by in-store and online, November 2018
Satisfaction with the Retail Experience
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- 95% of buyers at least satisfied with their last shopping experience
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- Figure 56: Satisfaction with the retailer last used to purchase electrical goods, November 2018
- Concerns exist around key store USPs
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- Figure 57: Key drivers of overall satisfaction with the retailer used to make the last purchase of electrical/electronic products, November 2018
- Figure 58: Overall satisfaction with the retailer used to make the last purchase of electrical/electronic products – Key driver output, November 2018
- Satisfaction levels in general high among the leading players…
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- Figure 59: Overall satisfaction with the retailer last used to purchase electrical goods, by leading retailer, November 2018
- Currys performs well in terms of service interaction, but lags on delivery
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- Figure 60: Satisfaction levels with aspects of the electrical buying process, by leading retailer, November 2018
- Methodology
The Impact of Online, Promotions and Service on the Sector
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- In-store service still crucial despite the shift towards online
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- Figure 61: Attitudes towards in-store service at electrical retailers, November 2018
- Younger consumers far more likely to learn about new products via social
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- Figure 62: ‘Yes’ responses to attitudes towards in-store service at electrical retailers, by age, November 2018
- Credit could encourage some to upgrade
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- Figure 63: Attitudes towards promotions, guarantees and credit, November 2018
- Higher earning households more swayed by guarantees and BNPL
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- Figure 64: Attitudes towards promotions, guarantees and credit, by household income, November 2018
Black Friday 2018
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- Two in five purchased items during Black Friday 2018
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- Figure 65: Methods of purchasing items during Black Friday 2018, December 2018
- Purchasing on Black Friday skews younger
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- Figure 66: Methods of purchasing items during Black Friday 2018, by age, December 2018
- Electricals most popular overall for purchases
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- Figure 67: Products purchased during Black Friday 2018, December 2018
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- Figure 68: Electrical products purchased during Black Friday 2018, by age, December 2018
- Amazon the dominant player during the event
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- Figure 69: Retailers shopped with in-store/online during Black Friday 2018, December 2018
- Christmas purchasing key during Black Friday
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- Figure 70: Behaviours of Black Friday shoppers, December 2018
Leading Retailers – What You Need to Know
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- Dixons Carphone sales slow…
- …whilst Maplin fails
- Amazon continues to grow its electricals sales
- Amazon the only leading player adding share
- Over half of spending comes online, and the share continues to grow
- Amazon brand scores high on trust
Leading Specialists
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- Dixons Carphone continues to put on growth despite a tough mobiles market
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- Figure 71: Leading specialist retailers of electrical goods: total net revenues; 2014/15-2018/19
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- Figure 72: Leading specialists, CAGR of net revenues, 2014/15-2017/18
- Dixons Carphone continues to consolidate its stores following merger
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- Figure 73: Leading retailers of electrical goods, outlet numbers, 2014/15-2018/19
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- Figure 74: Leading specialist retailers of electrical goods, annual sales per outlet, 2014/15-2018/19
- Pressure on the specialist sector has squeezed margins across the board
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- Figure 75: Leading specialist retailers of electrical goods, operating profits, 2014/15-2017/18
- Figure 76: Leading specialist retailers of electrical goods, operating margins, 2014/15-2017/18
- Sales areas and sales densities
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- Figure 77: Leading specialist retailers of electrical goods, estimated sales area, 2014/15-2017/18
- Figure 78: Leading specialist retailers of electrical goods, sales per square metre, 2014/15-2017/18
Leading Non-specialists
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- Amazon the leading non-specialist
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- Figure 79: Leading non-specialists retailers’ estimated sales of electronic goods (excluding VAT), 2014-18
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- Figure 80: Leading non-specialist retailers, CAGR in estimated electrical goods sales, 2014-18
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- Figure 81: Estimated Amazon and eBay total GTV/GMV electrical sales, 2015-18
- Consolidation of Argos stores impacting sales
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- Figure 82: Leading non-specialist retailers of electrical goods, outlet numbers, 2014-18
Market Share
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- Dixons Carphone the market leader, but Amazon is gaining share
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- Figure 83: Estimated market shares of the leading specialist and non-specialist retailers of electrical goods, 2018
- Figure 84: Estimated market shares of the leading specialist and non-specialist retailers of electrical goods, 2016-18
Mobile Phone Specialists
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- The market
- Mobile network connections
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- Figure 85: Value of mobile network connections, 2013-18
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- Figure 86: Phone payment types, October 2018
- EE the single largest network
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- Figure 87: Mobile network service providers, October 2018
- Network providers – Key retail metrics
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- Figure 88: Estimated store numbers of the big four network providers, 2017
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- Figure 89: Leading network providers: Financials, 2015-17
- Carphone Warehouse
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- Figure 90: Dixons Carphone interim 18/19 financial results, by trading segment, October 2018
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- Figure 91: Carphone Warehouse: Key Metrics, 2014-19
Online
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- Electricals the only category that over half comes through online
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- Figure 92: Estimated online sales of electrical goods (Including VAT), 2014-18
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- Figure 93: How consumers purchased electrical goods, November 2018
- Amazon the dominant player online
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- Figure 94: Leading online retailers’ estimated share of online spending on electrical goods, 2018
Space Allocation Summary
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- Figure 95: Leading electricals retailers, summary space allocation estimates, January 2019
- Detailed space allocation
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- Figure 96: Leading electricals retailers, detailed space allocation estimates, January 2019
- Electrical departments in non-specialists
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- Figure 97: Non-specialists: estimated electricals space as a percentage of total floor space, January 2019
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Retail Product Mix
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- Space allocation
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- Figure 98: UK electricals retailers, space allocation, 2018
- Figure 99: Leading electricals retailers, electrical space, 2017/18
- Sales density
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- Figure 100: Leading electricals retailers, estimated sales densities by broad product area, 2017/18
- Sales by broad product category
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- Figure 101: Leading electricals retailers, estimated sales by broad product area, 2017/18
- Market shares
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- Figure 102: Leading electrical retailers, estimated market share by broad product area, 2017/18
Launch Activity and Innovation
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- Speeding up the checkout process
- ‘See before you buy’
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- Figure 103: Currys PC World Point and Place at the Mintel Offices, February 2019
- Same-day electricals home delivery service
- Jessops new store format aimed at the selfie generation
Advertising and Marketing Activity
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- Total advertising spend down 3.5% year-on-year in 2018
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- Figure 104: Recorded above-the-line, online display and direct mail total advertising expenditure by UK retail advertisers of electrical products, 2014-18
- DSG Retail by far and away the sector’s biggest advertising spender
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- Figure 105: Leading UK retail advertisers of electrical products: recorded above-the-line, online display and direct mail total advertising expenditure, 2014-18
- TV attracts the biggest chunk of total sector advertising spend
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- Figure 106: Recorded above-the-line, online display and direct mail total advertising expenditure by UK retail advertisers of electrical products, by media type, 2014-18
- Campaign highlights
- Carphone Warehouse Mowbli campaign reboot
- Currys PC World multi-million-pound ‘Get Your TV For Free’ advertising campaign
- Currys PC World ‘The magic of Christmas, upgraded’ advert
- Leading advertisers in 2018 by media type
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- Figure 107: Leading UK retail advertisers of electrical products: recorded above-the-line, online display and direct mail total advertising expenditure, by media type, 2018
- Nielsen Ad Intel coverage
Brand Research
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- What you need to know
- Brand map
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- Figure 108: Attitudes towards and usage of selected brands, December 2018
- Key brand metrics
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- Figure 109: Key metrics for selected brands, December 2018
- Brand attitudes: Amazon and AO.com provide the best online experience
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- Figure 110: Attitudes, by brand, December 2018
- Brand personality: multichannel brand Argos very accessible
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- Figure 111: Brand personality – Macro image, December 2018
- John Lewis style over substance
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- Figure 112: Brand personality – Micro image, December 2018
- Brand analysis
- Amazon: a brand at the top of its game
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- Figure 113: User profile of Amazon, December 2018
- AO.com: lower brand awareness and usage compared to rivals, but highly recommended by those that use it
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- Figure 114: User profile of ao.com, December 2018
- Argos: universal brand awareness, but uninspiring and lacks cutting edge
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- Figure 115: User profile of Argos, December 2018
- Apple Store: innovative, exclusive and expensive
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- Figure 116: User profile of Apple Store, December 2018
- John Lewis: stylish and pricey
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- Figure 117: User profile of John Lewis, December 2018
- Currys PC World: accessible and trustworthy, but lacks innovativeness
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- Figure 118: User profile of Currys PC World, December 2018
- Carphone Warehouse: enjoys strong brand awareness, but ranks lowest in key attitudinal criteria
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- Figure 119: User profile of Carphone Warehouse, December 2018
Amazon International
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- What we think
- Prime
- Marketplace
- And what does that mean for electricals?
- Where next?
- Company background
- Company performance
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- Figure 120: Amazon: Sales by activity, 2018
- Mintel estimates
- GTV vs Consolidated vs Direct sales
- Recent performance
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- Figure 121: Amazon Group: Group financial performance, 2014-18
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- Figure 122: Amazon International: Estimated retail sales performance, 2015-18
- Sales of electrical goods
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- Figure 123: Amazon Europe: estimated sales of electrical products, 2018
- Retail offering
- Consumer profile
- Product mix
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- Figure 124: Amazon UK: Estimated sales by product, 2017
- Marketing
AO World PLC
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- What we think
- New products in audio-visual and computing categories driving sales
- Scaling up existing proposition with complementary services
- New brand campaign delivering encouraging brand awareness metrics
- Developing B2B offering
- Exploring third-party logistics opportunities
- Company background
- Company performance
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- Figure 125: AO World Plc: Group financial performance, 2013/14-2017/18
- Retail offering
Apple Retail (Europe)
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- What we think
- iPhone remains crucial to Apple’s performance
- Growth in new products fast but still too small
- Creating reasons to visit stores through experiences and architecture
- Company background
- Company performance
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- Figure 126: Apple Retail (Europe): group financial performance, 2013/14-2017/18
- Figure 127: Apple Retail (Europe): outlet data, 2013/14-2018/19
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- Figure 128: Apple Retail UK and Apple Retail Germany: outlet data, 2014-18
- Retail offering
Argos
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- What we think
- ‘Voice shopping’ service via the Google Assistant platform
- ‘See before you buy’ tool to make TV buying easier
- Pay@Browse speeding up the checkout process
- Experimenting with pop-up shops
- Company background
- Company performance
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- Figure 129: Argos: Group financial performance, 2013/14-2017/18
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- Figure 130: Argos: outlet data, 2013/14-2017/18
- Retail offering
Dixons Carphone (UK & Ireland)
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- What we think
- Shift in ownership habits hurting mobile phone sales
- Enhanced assisted sale initiative to improve in-store service
- Investment in online offering to further grow e-commerce
- Augmented reality shopping to assist decision making
- Making tech more affordable
- Tackling the problem of e-waste
- Company background
- Company performance
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- Figure 131: Dixons Carphone: group financial performance, 2013/14-2017/18
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- Figure 132: Dixons Carphone: group sales performance, by new reporting segments, 2016/17-2017/18
- Figure 133: Dixons Carphone: outlet data, 2013/14-2017/18
- Retail offering
E-Square
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- Company background
- Key figures
- Members
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- Figure 134: E-Square: membership, 2019
Euronics International
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- What we think
- Company background
- Company performance
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- Figure 135: Euronics International: estimated group financial performance, 2013-17
- Figure 136: Euronics International: estimated outlet data, 2013-17
- Retail offering
Appendix – Data Sources, Abbreviations and Supporting Information
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- Data sources
- Financial definitions
- Sales per store, sales per square metre
- Exchange rates
- Abbreviations
- Consumer research methodology
- Brand research
Appendix – Key Driver Analysis
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- Figure 137: Overall satisfaction with the retailer used to make the last purchase of electrical/electronic products – Key driver output, November 2018
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- Figure 138: Satisfaction with the retailer used to make the last purchase of electrical/electronic products, November 2018
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Appendix – Market Size and Forecast
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- Forecast methodology
- Market size definitions
- Specialist sector size
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