Fashion Online - UK - August 2008

ISSUES IN THE MARKET
Main issues
Definition
INSIGHTS AND OPPORTUNITIES
The demanding under-25s
Catering for time-poor parents
Keeping it simple for ABs
Coaxing the male shopper
MARKET IN BRIEF
Online fashion market expected to reach £3 billion in 2008
What is driving the online fashion market?
How consumers shop online
Multi-channel retailers step up investment
Catalogue operators have the biggest slice of the action
Pureplayers: Small but growing
The online fashion prospects
What are the opportunities?
FAST FORWARD TRENDS
 TREND 1: COOL CONSUMER
Definition
What’s next?
 TREND 2: NO MIDDLEMAN
Definition
What’s next?
 TREND 3: DESEASONALISATION
Definition
What’s next?
INDUSTRY INSIGHTS
Key points
Impact from the economic downturn
Expectations for 2009
The best online fashion retailers
Customer expectations and delivery
What is happening within website navigation?
Is offline presence essential?
Marketing strategies trends
Which e-tailers are best at marketing?
Will any retailers be able to hold out against going online?
How can returns rates be reduced?
What are the obstacles and the opportunities for future growth?
INTERNAL MARKET ENVIRONMENT
Key points
The growth of the 35-44 shoppers
Figure 1: Percentage of internet users buying clothing and footwear in the past three months, by gender, age, socio-economic group and presence of children, July 2006 and April 2008
Fashion close to overtaking books
Figure 2: Top ten, physical goods retailers’ websites, actually purchased from in the last three months, 2003-08
Broadband: More and faster
The growth in mobile access
Figure 3: Broadband internet, at home penetration, 2003-08
Increasing availability of ranges online
Internet fraud worries still important
Figure 4: Extent to which security concerns affect purchasing on the web, April 2008
Improving customer experience
BROADER MARKET ENVIRONMENT
Key points
Increased price sensitivity?
Figure 5: PDI, at current and constant 2003 prices, 2003-13
Spending slowdown
Figure 6: Consumer expenditure, 2003-13
The over-45s to grow
Figure 7: UK population, by age, 2003-13
Clothing and footwear price deflation
Figure 8: Clothing and footwear spending, 2003-08
Professional and managerial jobs will boost online sales
Figure 9: UK adult population aged 15+, by socio-economic group, 2003-13
MARKET SIZE AND FORECAST
Key points
Online fashion market booms
Figure 10: Market size and forecast of online retail sales of clothing and footwear, 2003-08
Forecast
Figure 11: Market size and forecast of online retail sales of clothing and footwear, 2003-13
Figure 12: Market size and forecast of online retail sales of clothing and footwear, 2003-13
Figure 13: Online spending as a percentage of total spending on clothing and footwear, at current and constant 2008 prices, 2003-13
Online spend to take up a tenth of market
Factors used in the forecast
WHO’S INNOVATING?
Creating a buzz on social networks
Organising your store around the customer
Testing new markets with the internet
Twinning up lifestyle and fashion
Making the most of TV ad spend
Borrowing from the music world
Time for online pop-ups?
Crowd funding in fashion
New Look adds community dimension
MARKET IN CONTEXT
Key points
Online retail sales
Figure 14: Online and total retail sales, at current prices (Inc. VAT), 2003-08
Fashion’s share of online
Figure 15: Online retail sales of clothing & footwear compared with total online Retail sales (Inc. VAT), 2003-08
Online becomes major fashion distribution channel
Figure 16: Consumer online and total spending on clothing and footwear, at current prices, 2003-08
STRENGTHS AND WEAKNESSES IN THE MARKET
Strengths
Weaknesses
CHANNELS OF DISTRIBUTION
Catalogue retailers dominate
Multi-channel to expand further
Figure 17: Shares of online fashion market, by channel, 2008 (est)
THE CONSUMER – WHERE DO THEY BUY CLOTHING ONLINE?
Key points
 ONLINE CLOTHING SHOPPING – TREND DATA
Marks & Spencer opens up lead on high street rivals
Figure 18: Where they buy fashion online, for themselves and for others, May 2008
Marks & Spencer a success with AB women
Debenhams attracts young audience
John Lewis attracts upmarket gifters
Next weak on attracting male shoppers
Figure 19: Where they have bought clothing online, by age, gender and socio-economic group, May 2008
Oasis and River Island weak in buying for others
Burton and Topman competing head on
Few Dorothy Perkins female shoppers buy for others
Monsoon fails to attract its core 35-54 audience
Figure 20: Where they have bought clothing online, by age, gender and socio-economic group, May 2008
Sports shops could attract more upmarket customers
Austin Reed and Wallis miss out on self buyers
Figure 21: Where they have bought clothing online, by age, gender and socio-economic group, May 2008
New Look misses out on older groups
Tesco a popular choice
Catalogue operators retain their audience
ASOS level with Topshop
Figure 22: Where they have bought clothing online, by age, gender and socio-economic group, May 2008
La Redoute could attract more men
Figleaves attracts male gifters
Auction sites hugely popular across the spectrum
Almost half of men haven’t bought clothing online
Figure 23: Where they have bought clothing online, by age, gender and socio-economic group, May 2008
THE CONSUMER – WHAT THEY BOUGHT ONLINE
Figure 24: What they buy online, May 2008
Key points
T-shirts are favourite category
Figure 25: what they bought online, by age, gender and socio-economic group, May 2008
Figure 26: What they bought online, by age, gender and socio-economic group, May 2008
THE CONSUMER - WHAT THEY THINK OF BUYING CLOTHING ONLINE
Key points
Delivery – the crucial appeal
More choice
Figure 27: What they think of buying clothing online, May 2008
Men more price-driven
Figure 28: What they think of buying clothing online, by gender, age and socio-economic group, May 2008
20-24s believe there is more choice
Figure 29: What they think of buying clothing online, by gender, age and socio-economic group, May 2008
20-44s lack shopping time
Figure 30: What they think of buying clothing online, by gender, age and socio-economic group, May 2008
Under-25s still like the high street
Figure 31: What they think of buying clothing online, by gender, age and socio-economic group, May 2008
 FASHION ONLINE REPERTOIRE
Auction sites, LX Direct and M&S customers are most loyal
Figure 32: Number of online retailers used, by retailer, May 2008
The 20-24s shop around the most
Figure 33: Number of online retailers used, by gender, age, May 2008
CONSUMER TYPOLOGIES
Key points
Figure 34: Consumer typologies, May 2008
 GROUP 1: PRICE POWERED (21%)
Who are the Price Powered?
Marketing message
 GROUP 2: ONLINE HESITANTS (21%)
Who are the Online Hesitants?
Marketing message
 GROUP 3: ONLINE FANATICS (16%)
Who are the Online Fanatics?
Marketing message
 GROUP 4: HIGH STREET LOYALISTS (42%)
Who are the High Street Loyalists?
Marketing message
RETAIL COMPETITOR ANALYSIS
Key points
Leading pure-players
Figure 35: Leading pureplay online fashion retailers, 2008
Catalogue operators
Figure 36: Leading catalogue fashion retailers, 2008
Multi-channel retailers
Figure 37: Leading multi-channel online fashion retailers, 2008
Evaluation
Figure 38: Online retailers, evaluation, 2008
Retailer recommendations
RETAILER PROFILES
Arcadia
Market positioning
Strategic evaluation
Financial performance
Figure 39: Arcadia, turnover, operating profits and margin, 2002-07
Brands/product offering
Advertising and marketing
ASOS
Market positioning
Strategic evaluation
Financial performance
Current trading
Figure 40: ASOS, Group financial performance, 2002-08
Brands/product offering
Operational issues
Advertising and marketing
Boden
Market positioning
Strategic evaluation
Financial performance
Figure 41: JP Boden & Co, financial performance, 2001-06
Brands/product offering
Operational issues
Advertising and marketing
Debenhams
Market positioning
Strategic evaluation
Financial performance
Figure 42: Debenhams, gross transaction value, turnover, operating profits, pre-tax profits and margin, 2002-07
Brands/product offering
Operational issues
Advertising and marketing
Figleaves.com
Market positioning
Financial performance
Figure 43: Figleaves Global Trading Ltd, turnover, operating profits and margin, 2002-07
Brands/product offer
Advertising and marketing
Littlewoods Shop Direct Group
Market positioning
Strategic evaluation
Financial performance
Figure 44: Littlewoods Shop Direct Group, turnover, operating profits and margin, 2002-07
Brands/retail offering
Operational issues
Advertising and marketing
Marks & Spencer
Market positioning
Strategic evaluation
Financial performance
Figure 45: M&S UK, retail sales, by merchandise category, operating profits and margin, 2005-08
Brands/retail offering
N Brown
Market positioning
Figure 46: N Brown group, turnover, operating profits and margin, 2003-08
Brands/retail offering
Next
Market positioning
Figure 47: Next, turnover, operating profits and margin, 2003-08
Brands/retail offering
Otto UK
Market positioning
Figure 48: Freemans, turnover, operating and pre-tax profits and margin, 2002-07
Figure 49: Grattan, turnover, operating and pre-tax profits and margin, 2002-07
Brands/retail offering
APPENDIX
Abbreviations & Definitions
APPENDIX: WHERE DO THEY BUY CLOTHING ONLINE
Figure 50: Where they bought clothing online, by region, daily newspapers, internet usage and supermarket used, May 2008
Figure 51: Where they bought clothing online, by region, daily newspapers, internet usage and supermarket used, May 2008
Figure 52: Where they bought clothing online, by region, daily newspapers, internet usage and supermarket used, May 2008
Figure 53: Where they bought clothing online, by region, daily newspapers, internet usage and supermarket used, May 2008
Figure 54: Where they bought clothingonline, by region, daily newspapers, internet usage and supermarket used, May 2008
Figure 55: Where they bought clothing online, by region, daily newspapers, internet usage and supermarket used, May 2008
APPENDIX: WHAT THEY BOUGHT ONLINE
Figure 56: Items bought online, by region, daily newspapers, internet usage and supermarket used, May 2008
Figure 57: Items bought online, by region, daily newspapers, internet usage and supermarket used, May 2008
APPENDIX: WHAT THEY THINK OF BUYING CLOTHING ONLINE
Figure 58: What they think of buying online, by region, daily newspapers, internet usage and supermarket used, May 2008
Figure 59: What they think of buying online, by region, daily newspapers, internet usage and supermarket used, May 2008
Figure 60: What they think of buying online, by region, daily newspapers, internet usage and supermarket used, May 2008
Figure 61: What they think of buying online, by region, daily newspapers, internet usage and supermarket used, May 2008
APPENDIX: CONSUMER TYPOLOGIES
Figure 62: Consumer typologies, by attitudes towards online clothes shopping, May 2008
Figure 63: Typologies, by gender, age, socio-economic group, region, internet usage, mobile phone network, daily newspaper and supermarket used, May 2008
Figure 64: Number of online retailers used, by region, daily internet usage, mobile phone network provider, daily newspaper and supermarket used, May 2008
Figure 65: Number of items bought online, by type of item, May 2008
Figure 66: Number of items bought online, by type of item, May 2008