Table of Contents
Executive Summary
-
- The market
- Retail sales holding up despite uncertainty in the market
-
- Figure 1: Mintel Financial Confidence Tracker, January 2017-May 2019
- The online market grows by 14.4% in 2018…
-
- Figure 2: All online sales and forecast, 2014-24
- ...meaning online claimed 18.0% of all retail sales
-
- Figure 3: Online sales as a % of all retail sales (including VAT), 2014-24
- Store-based retailers account for just under half of all online sales
-
- Figure 4: Online pure players and store-based retailers share of all online sales, 2008-19
- Companies and brands
- Amazon the dominant market leader…
-
- Figure 5: Leading retailers share of all online sales, 2018
- …and its brand is strong
-
- Figure 6: Key metrics for selected brands, September 2018-June 2019
- Larger players look to support the high-street
-
- Figure 7: Amazon Clicks and Mortar Manchester, June 2019
- The consumer
- Vast majority of consumers shop online
-
- Figure 8: Frequency of online shopping, May 2019
- Fashion and hard-copy media popular categories
-
- Figure 9: Products purchased online in the past year, May 2019
- Smartphone purchasing now more popular among 16-34s
-
- Figure 10: Devices used to shop online, 2017-19
- Comparing prices and delivery options key in the pre-purchase journey
-
- Figure 11: What consumers do before shopping online, May 2019
- Amazon most popular retailer online
-
- Figure 12: Retailers shopped with online in the last 12 months, May 2019
- 29% have a delivery pass that isn’t Amazon Prime
-
- Figure 13: Retail delivery service membership, May 2019
- 29% have used PayPal Credit while 37% have used a cashback site in the past year
-
- Figure 14: Use of credit when shopping with retailers in the past year, May 2019
- 69% think limiting the ability to return items would make online shopping less appealing
-
- Figure 15: Attitudes towards shopping online, may 2019
- What we think
Issues and Insights
-
- Does the UK need an online sales tax?
- The facts
- The implications
- The impact of the mobile-first generation
- The facts
- The implications
- The opportunities for online within an aging population
- The facts
- The implications
The Market – What You Need to Know
-
- Retail sales holding up despite uncertainty in the market
- Online market grows by 14.4% in 2018
- Store-based retailers account for just under half of all online sales
- Digital download market worth some £3.6 billion in 2018
Market Drivers
-
- 95% of UK households now online
-
- Figure 16: UK household internet access, 2011-18
- Smartphone ownership hits its highest level to date in 2018
-
- Figure 17: Ownership of mobile phones, January 2012-January 2019
- Wage growth outstripping inflation
-
- Figure 18: Real wage growth: average weekly earnings vs inflation, January 2016-May 2019
- A new high for Mintel’s financial confidence index
-
- Figure 19: Mintel Financial Confidence Tracker, January 2015-May 2019
- Discounting boosts retail sales volume growth year-on-year in 2018, but hits value growth
-
- Figure 20: Annual % change in all UK retail sales (excluding fuel), by value and volume, June 2016-Jun 2019
Market Size and Forecast
-
- Online market grows by 14.4% in 2018
-
- Figure 21: All online sales and forecast, 2014-24
- Figure 22: All online sales and forecast, at current and constant prices, 2014-24
- Online to account for almost a fifth of all retail in 2019
-
- Figure 23: Online sales as a % of all retail sales (including VAT), 2014-24
- Online’s share peaks in November in line with Black Friday
-
- Figure 24: Online retail sales as a % of all retail sales, non-seasonally adjusted, January 2016-April 2019
-
- Figure 25: Average weekly value of all online retail sales, non-seasonally adjusted, January 2016-April 2019
- Forecast methodology
Market Segmentation
-
- Breakdown of retail sales by type of retailer
-
- Figure 26: Online sales by type of retailer, 2018
-
- Figure 27: Online sales by type of retailer, 2014-18
- Store-based vs online-only retailers
-
- Figure 28: Online pure players and store-based retailers share of all online sales, 2010-19
- The longer term view
-
- Figure 29: Total online-only retailer sales, 2014-24
-
- Figure 30: Total online-only retailer sales, at current and constant prices, 2014-24
- Figure 31: Total store-based retailers sales, 2014-24
- Figure 32: Total store-based retailers sales, at current and constant prices, 2014-24
- Sales by product
-
- Figure 33: Online estimated sales by product, 2018
-
- Figure 34: Online retailing: estimated sales by product by store-based and online-only retailers, 2018
Digital Spending
-
- Books – Hard copy fighting back
-
- Figure 35: Value of consumer print book and publisher UK sales of consumer digital books (net invoiced value), 2014-19
- Music – Streaming taking over
-
- Figure 36: Spending on recorded music 2014-18
- Video – Streaming now over half of the market
-
- Figure 37: The video market, 2016-18
- Games
- The total download market
-
- Figure 38: Estimated digital download market, 2018
The Consumer – What You Need to Know
-
- Vast majority of consumers shop online
- Fashion and hard-copy media popular categories
- Smartphone purchasing now more popular among 16-34s
- Comparing prices and delivery options key in the pre-purchase journey
- Amazon most popular retailer online
- 29% have a delivery pass that isn’t Amazon Prime
- 29% have used PayPal Credit while 37% have used a cashback site in the past year
- 69% think limiting the ability to return items would make online shopping less appealing
Who Shops Online and How Frequently They Shop
-
- Online shopping ubiquitous across all demographics
-
- Figure 39: Usage of online retailing, by age and gender, May 2019
- Over a third (36%) shop online weekly
-
- Figure 40: Frequency of online shopping, May 2019
- 25-34s most frequent online shoppers
-
- Figure 41: Frequency of online shopping, by age, May 2019
Products Purchased Online
-
- Fashion most popular online purchase
-
- Figure 42: Products purchased online in the past year, May 2019
- Products purchased by age
-
- Figure 43: Products purchased online in the past year, by age, May 2019
- 35-44s have the broadest repertoire online
-
- Figure 44: Repertoire of product categories purchased from online in the past year, by age, May 2019
- There is still some hesitancy around buying certain categories online
Devices Used to Purchase Online
-
- Desktop/laptop purchasing still most common but smartphone shopping growing rapidly
-
- Figure 45: Devices used to shop online, 2017-19
- Younger consumers now more likely to shop via smartphone
-
- Figure 46: Devices used to shop online, by age, May 2019
- More purchase via mobile site than app
-
- Figure 47: How smartphone/tablet shoppers shop online, May 2019
- Younger consumers want more features from apps
-
- Figure 48: Attitudes to retail mobile apps, May 2019
The Pre-Purchase Journey
-
- Price and convenience are key in the decision process
-
- Figure 49: What consumers do before shopping online, May 2019
- Younger consumers more driven by promotional activity
-
- Figure 50: What consumers do before shopping online, by age, May 2019
- Straight to search
-
- Figure 51: Attitudes towards search, May 2019
Retailers Used
-
- More shop with online-only retailers
-
- Figure 52: Types of online retailer shopped with in the past 12 months, May 2019
- Amazon and eBay dominant
-
- Figure 53: Store-based and online-only retailers shopped with in the past year, May 2019
- Argos most popular store-based player online
-
- Figure 54: Retailers shopped with online in the last 12 months, May 2019
- Online customer profiles
-
- Figure 55: Retailers shopped with online in the last 12 months, by age and socio-economic group, May 2019
- Consumers have a wider repertoire of store-based retailers they shop with
-
- Figure 56: Repertoire of online-only and store-based retailers shopped with in the past year, May 2019
Subscription Delivery Services and Returns
-
- Away from Prime, grocery delivery passes most popular retail memberships
-
- Figure 57: Retail delivery service membership, May 2019
- Fast fashion retailers show highest penetration among their shopping base
-
- Figure 58: Retail delivery service membership, by retailer shopper base, May 2019
- The issue of returns
-
- Figure 59: Attitudes to returns, May 2019
Credit and Cashback
-
- 65% purchased on credit in the past year
-
- Figure 60: Use of credit when shopping with retailers in the past year, May 2019
- Younger consumers more likely to use newer options
-
- Figure 61: Use of credit when shopping with retailers in the past year, May 2019
- 43% say credit options encourage impulse purchasing
-
- Figure 62: Attitudes to credit options, by age, May 2019
- Over a third use cashback sites
-
- Figure 63: Use of cashback sites in the past year, May 2019
- Over half of 25-34s have used a cashback site in the past year
-
- Figure 64: Use of cashback sites in the past year, by age, May 2019
Key Players – What You Need to Know
-
- Amazon the dominant player
- Four retailers account for 45% of the market
- Boots the most trusted brand online
- Visual search and AR use on the rise
Leading Online Retailers
-
- Amazon the leading player
-
- Figure 65: UK: top 30 leading online retailers, 2016/17-2018/19
Market Share
-
- Amazon the dominant market leader
-
- Figure 66: Leading retailers share of all online sales, 2018
-
- Figure 67: Leading retailers: share of all online sales, 2016-18
Brand Research
-
- What you need to know
- Brand map
-
- Figure 68: Attitudes towards and usage of selected brands, September 2018-June 2019
- Key brand metrics
-
- Figure 69: Key metrics for selected brands, September 2018-June 2019
- Brand attitudes: Innovative ASOS, trustworthy Boots
-
- Figure 70: Attitudes, by brand, September 2018-June 2019
- Brand personality: ASOS and eBay fun brands
-
- Figure 71: Brand personality – macro image, September 2018-June 2019
- Headline: Amazon responsive and reliable, John Lewis and Ocado perceived as more expensive
-
- Figure 72: Brand personality – micro image, September 2018-June 2019
- Brand analysis
- Amazon near-universal brand awareness and highest lifetime usage
- ao.com offers a reasonably good online service, but not particularly good value for money
- Argos high brand awareness and accessible, but lacks cutting edge and style
- John Lewis pricey, but worth paying more for
- ASOS innovative and fun
- Boots trustworthy, accessible and reliable
- Ocado low usage and untrustworthy
- eBay innovative, good online service, value for money and highly recommended
- JD Williams functional and basic, rather than innovative or cutting edge
- Boohoo/Boohoo Man low brand awareness and low lifetime usage
- Littlewoods high brand awareness but least recommended
- Very accessible and somewhat aspirational
Launch Activity and Innovation
-
- eBay opens high-street concept store
- Expanded online delivery options
- Augmented reality technology to give shoppers more certainty when purchasing items online
- Image-based shopping
- Voice-activated beauty shopping
- Amazon launches private label skincare brand
- ‘Try before you buy’ fashion service
- New parcel postboxes scheme rolled out to make online retail easier
- Geo-targeted delivery-on-demand
Advertising and Marketing Activity
-
- Online retail advertising spend up 20.9% year-on-year in 2018
-
- Figure 73: UK online retail: recorded above-the-line, online display and direct mail total advertising expenditure, 2015-18
- Amazon’s first real brand advertising campaign for Prime Video
- eBay highlights hot deals and trending items
- Moonpig’s #MerrierTogether Christmas campaign
- JD Williams first advertising since recruiting TBWA\Manchester
- Shop Direct Very’s location-based digital out of home campaign
-
- Figure 74: Leading UK online retailers: recorded above-the-line, online display and direct mail total advertising expenditure, 2015-18
- Digital share grows, TV falls
-
- Figure 75: UK online retail: recorded above-the-line, online display and direct mail total advertising expenditure, by media type, 2015-18
- Nielsen Ad Intel coverage
AliExpress
-
- What we think
- As a retailer
- Where next?
- Company background
- Company performance
-
- Figure 76: Alibaba: sales by division, 2017-18
- Figure 77: Alibaba: group financial performance, 2015/16-2018/19
- Gross merchandise volume (GMV, or total sales at retail prices)
-
- Figure 78: Alibaba: GMV of China marketplaces, 2015/16-2017/18
- AliExpress
- Retail offering
Amazon
-
- What we think
- Amazon: A Shopper’s Perspective – UK, January 2019
- Amazon in Europe
- How has it done it?
- Marketplace development
- Amazon Prime
- Dynamism
- Stores and online
- Food retailing
- Where next?
- Company background
- Company performance
-
- Figure 79: Amazon: consolidated sales by activity, 2018
- Mintel estimates
- GTV vs consolidated sales
- Recent performance
-
- Figure 80: Amazon Group: group financial performance, 2014-18
- Figure 81: Amazon International: estimated retail sales performance, 2015-18
- Retail offering
- Consumer profile
- Product mix
-
- Figure 82: Amazon UK: estimated sales by product, 2017
- Marketing
AO World
-
- What we think
- AR presents products in the home
- Rentals service aimed at cash-strapped consumers
- Mulling subscription fee initiative
- Scaling up existing proposition with complementary services
- New dedicated business website
- Leveraging logistics expertise to offer third-party deliveries
- Last-mile solution to support planned product expansion
- Collaborating with digital start-ups to make online shopping faster and easier
- Company background
- Company performance
-
- Figure 83: AO World Plc: group financial performance, 2014/15-2018/19
- Retail offering
Argos
-
- What we think
- Using voice recognition technology as part of the online ordering process
- ‘See before you buy’ augmented reality tool
- Beefed up fulfilment capabilities
- Accelerated technology-led ‘digital store’ concept
- Company background
- Company performance
-
- Figure 84: Argos: group financial performance, 2014/15-2018/19
-
- Figure 85: Argos: outlet data, 2014/15-2018/19
- Retail offering
ASOS
-
- What we think
- Getting tough on ‘serial returners’
- Bolstering CSR credentials with charity shop initiative
- Making shopping online for clothing easier
- Tailored experience for specific markets
- Becomes the latest fashion retailer to introduce its own homewares collection
- Company background
- Company performance
-
- Figure 86: ASOS: group financial performance, 2013/14-2017/18
- Retail offering
Boohoo Group
-
- What we think
- Acquisitions transform Boohoo into a multi-brand online fashion destination
- Refreshed website design to aid customers through the decision-making process
- Fulfilment refinements to enhance convenience
- Celebrity collaborations and influencer network
- Tackling fast fashion waste
- Company background
- Company performance
-
- Figure 87: Boohoo Group plc: group financial performance, 2014/15-2018/19
- Retail offering
eBay
-
- What we think
- Marketplace
- What eBay adds
- Is eBay mature?
- Where next?
- Company background
- Company performance
-
- Figure 88: eBay: group financial performance, 2014-18
-
- Figure 89: eBay: Group revenue by stream, 2018
- Figure 90: eBay: group Gross Merchandise Volume, 2014-18
- Retail offering
Missguided
-
- What we think
- Enhanced payment option with new ‘buy now, pay later’ service
- Online to offline with mixed success
- Meeting the demand for ‘see now, buy now’
- Reimagining the fashion mcommerce experience with Tinder-inspired app
- Influencer marketing and celebrity tie-ups amplify the brand’s reach and engagement
- Needs to do more to promote sustainable fashion
- Targeting the Middle East’s youthful demographic
- Company background
- Company performance
-
- Figure 91: Missguided: group financial performance, 2013/14-2017/18
- Retail offering
N Brown Group
-
- What we think
- Management
- Where next?
- Company background
- Company performance
-
- Figure 92: N Brown Group Plc: group financial performance, 2013/14-2018/19
- Retail offering
-
- Figure 93: N Brown: sales by product, 2017/18 and 2018/19
Next Group
-
- What we think
- Repurposing loss-making stores into collection shops
- Speedy click-and-collect order fulfilment
- Positioning itself as a one-stop shop for online fashion and homewares
- Website developments aimed at enhancing online user experience
- Company background
- Company performance
-
- Figure 94: Next Group: group financial performance, 2014/15-2018/19
-
- Figure 95: Next Group: outlet data, 2014/15-2018/19
- Figure 96: Next Group: average active customers, 2017/18 and 2018/19
- Retail offering
Ocado Group
-
- What we think
- February 2019 – bad news, good news
- Where next?
- Company background
- Company performance
-
- Figure 97: Ocado Group plc: Group financial performance, 2012/13-2017/18
- Retail offering
Otto Group (Multichannel Retail)
-
- What we think
- Time-saving and convenient automated shopping experiences
- Faster delivery with new instant payment system
- Experimental store concept combining the advantages of bricks-and-mortar retailing with those of online shopping
- Raising awareness of sustainability and eco-friendly credentials
- Company background
- Company performance
-
- Figure 98: Otto Group (Multichannel Retail): group sales performance, 2014/15-2018/19
-
- Figure 99: Otto Group: major brands within the Multichannel Retail segment, 2018/19
- Retail offering
Shop Direct Group
-
- What we think
- Cost cutting
- Mail order into online
- Where next?
- Company background
- Company performance
-
- Figure 100: Shop Direct Group: group financial performance, 2013/14-2018/19
- Retail offering
-
- Figure 101: Shop Direct: group product mix, 2017/18
YNAP group
-
- What we think
- YNAP gives a much-needed boost to Richemont’s online presence
- Increased co-operation with other brands in the Richemont family
- Alibaba deal provides China boost
- Customer service enhancements focus on personalisation
- Where now?
- Company background
- Company performance
-
- Figure 102: YNAP group: group financial performance, 2013/14-2018/19
- Retail offering
Zalando
-
- What we think
- Direct delivery of goods through partnered stores
- Expansion of loyalty scheme to strengthen relationship with customers
- Virtual stylist to aid customers through the decision making process
- Charging delivery fees to offset falling average order size and higher fulfilment costs
- Combatting ‘wardrobing’
- Eyeing growth through beauty
- In-home delivery service
- Tackling the problem of packaging waste
- Company background
- Company performance
-
- Figure 103: Zalando: group financial performance, 2014-18
-
- Figure 104: Zalando: key metrics, 2015-Q1 2018
- Retail offering
Appendix – Data Sources, Abbreviations and Supporting Information
-
- Data sources
- VAT
- Financial definitions
- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
-
- Forecast methodology
Back to top