One of every five beauty purchases online is made via the Amazon marketplace, according to a new report.
After a slow start, one of the U.K.’s oldest catalogers embraces e-commerce.
Shop Direct Group wasn’t the biggest or fastest-growing web merchant from the United Kingdom ranked in the 2013 Europe 500. But it’s a prime example of a retailer that was late to e-commerce and is now investing heavily in catching up.
Many of its rivals have already bet heavily on the web. The United Kingdom remains Europe’s single biggest, most mature and most competitive e-commerce market. In 2012, the 161 U.K. web merchants ranked in the 2013 Europe 500 generated combined web sales of $35.24 billion, up 16.7% from $30.20 billion in 2011. Overall online retail sales in the United Kingdom grew year over year about 13.5% to $52.59 billion from $46.35 billion, says Forrester Research.
With the market growing rapidly, Shop Direct (No. 9) sees itself in a race against time to build an e-commerce base that will sustain the 90-year-old direct marketer of apparel, accessories and home furnishings for the foreseeable future, says director of e-commerce Jonathan Wall. Shop Direct is one of the U.K.’s oldest catalog companies, with brands such as Littlewoods that began when company founder John Moores and his brother Cecil launched the brand in 1923. But as recently as six years ago, only about 20% of the company’s revenue came from e-commerce. “We initially moved much slower with e-commerce,” Wall says.
That’s changed. The web now accounts for 75% of sales, and will hit 80% soon, Wall says. In 2012, Shop Direct, which sells online at Littlewoods.com, Very.co.uk, Woolworths.co.uk and Isme.com, generated web sales of $1.93 billion, up 5.5% from $1.83 billion in 2011.
To continue to build up its e-commerce base, Shop Direct is counting heavily on a big push into mobile commerce and updated e-commerce technology. Shop Direct launched mobile commerce in 2010 and today sales through mobile devices account for about 20%, or $382 million, of all e-commerce sales.
Shop Direct’s next goal is making mobile account for at least one-third of all e-commerce sales. To achieve that goal Shop Direct has updated its mobile commerce sites with easier navigation that features more prominent department listings and daily deals. Mobile product pages also feature larger product photos, customer reviews and videos. Mobile commerce sites optimized for tablets now display new features such as product zoom. “We’ve been doing a lot of testing and learning,” Wall says.
Shop Direct also is in the final stages of installing a new e-commerce technology platform from Oracle Corp., which should be in place this summer. Shop Direct first installed an Oracle platform in 2006 and spent a considerable amount of time and money integrating a series of older legacy applications onto the new platform to create a comprehensive e-commerce system, Wall says. “Early on we had a lot of spaghetti junction,” Wall says.
With a new and completely updated e-commerce platform, Shop Direct will be able to update its e-commerce sites with more sophisticated features and functions such as a product recommendations tool that will serve up product suggestions based on the visitor’s previous shopping history and personal profile.
More importantly, better technology and a more aggressive approach to e-commerce will help Shop Direct keep pace with bigger U.K. chain retailers and web merchants such as Amazon.com (No. 1), which posted a year-over-year increase in U.K. web sales of 21.2% to $6.47 billion in 2012, and Tesco Stores (No. 5). Tesco’s web sales totaled $3.80 billion in 2012, up about 4.4% from $3.64 billion in 2011. “We were once behind the market and now we want to overtake it,” Wall says.