Next Generation Home Shopping

• The rise of the multi-channel retail conglomerate
• Key findings of this report
  • Trends in home shopping
  • The specialist home shopping sector
  • The challenge from the high street
  • The Internet revolution
  • Bookselling sector survey
  • Forecasts for the future of home shopping in the UK

Chapter 2 Introduction: trends in home shopping

• Summary
• The growing importance of the home shopping sector
• Social and economic trends affecting home shopping
  • The UK economy is currently overshadowed by the threat of recession
  • Demographic trends suggest strong growth of home shopping in the UK
  • Home shopping will benefit from other changes in society
  • The single European currency
  
  
• Specialist mail order companies
  • Broad-range retailers
  • More narrowly focused companies
  
  
• The challenge from the high street
  • The home shopping alternative as a customer service
  • New moves in the multiple grocery sector
  • The potential in home shopping for manufacturers
  
  
• Internet retailing
  • Key success factors in Internet retailing
  
  
• Major themes in current home shopping strategy
• Structure of this report

Chapter 3 Cost base analysis of home shopping

• Summary
• The importance of the cost base
• Cost factors driving diversification into home shopping
  • The cost of traditional store-based retailing is higher than ever
  • The profitability differential
  
  
• Adverse cost factors
  • Fulfilment is where store-based retailers face the steepest learning curve
  • Returns can be a major problem for home shopping companies
  
  
• The cost schedule
  • Planning costs
  • Set-up costs
  • Case study: The Internet Bookshop
  • Maintenance and management costs
  • Expansion and diversification costs
  
  
• Conclusions
  • The costs of Internet retailing in particular can be deceptive

Chapter 4 Specialist home shopping

• Summary
• Introduction: a profile of the established home shopping sector
  • Traditional segmentation by selling method
  • Segmentation by merchandising strategy
  • Parallel trends in home shopping and store-based retailing
  • Internationalisation as a defence against competition from the high street
  • Internationalisation as a defence against European competitors
  
  
• Broad range home shopping companies
  • Case study: Great Universal Stores
  • Many broad range home shopping specialists are diversifying
  • Case study: Littlewoods
  • Case study: The Food Ferry
  
  
• Product specialist home shopping companies
  • Product specialists in the food sector
  • Product specialists in the media sector
  
  
• Diversification into new home shopping channels
  • Littlewoods is exploring new avenues for its established offering
  • The GUS purchase of Argos brings mail order and high street together
  
  
• Conclusions

Chapter 5 The challenge from the high street

• Summary
• Introduction: the rationale for diversification
  • Home shopping as part of a general customer service strategy
  • Winning new customers
  • Maximising the profitability of existing core customers
  • Maximising returns on investment in retail technology
  • Maintaining market share: the competitive imperative
  
  
• Existing businesses with a presence in both sectors
  • Diversified groups with store-based and home shopping businesses
  • Case study: Next
  • High street retailers with a home shopping division
  • Case study: Marks & Spencer
  • Home shopping could reinforce wide-ranging retail brand portfolios
  • Home shopping companies with a presence on the high street
  
  
• The surge of store-based retailers into home shopping
  • The grocery sector has been the focus of much of this interest recently
  • Case study: Asda
  • Other multiple grocers are also looking at home delivery options
  • Case study: Sainsbury's
  • Case study: Tesco
  
  
• The clothing sector
  • Home shopping will target the mid-market in the clothing sector
  • Case study: Arcadia
  
  
• Conclusions

Chapter 6 Internet retailing

• Summary
• Introduction: the growth of Internet usage
  • The gap between vision and reality in Internet retailing
  
  
• The Internet retail revolution
  • Retailers' options in planning an Internet shopping site
  • Site design is a key to the success of Internet retailing
  • Advances in payment mechanisms
  
  
• The published media retail sector
  • The development of the Internet media retail brand
  • Bookselling
  • The recorded music business
  • Videos
  • Internet retailing developments by leading UK media retailers
  
  
• The adoption of the Internet by multiple grocers
  • Case study: Waitrose
  • Case study: Tesco
  • Other multiple grocers embarking on online grocery retailing
  
  
• The gift sector
  • Housewares
  • Chocolates
  • Flowers
  
  
• The Internet in other retail sectors
  • Wines and spirits
  • Clothing
  
  
• Conclusions

Chapter 7 Survey: Home shopping in the UK bookselling sector

• Summary
• Introduction: survey methodology
• Profile of the UK bookselling sector
• Home shopping in UK bookselling
  • Mail order bookselling
  • Case study: HMV Media
  • The status of Internet bookselling
  • Case Study: Amazon.com
  • Case study: WH Smith
  
  
• Opportunities for publishers
  • Case study: Dorling Kindersley
  
  
• Opportunities for non-traditional booksellers
  • Case study: Asda
  
  
• Future home shopping trends in bookselling
• Conclusions

Chapter 8 Forecasts and conclusions

• Summary
• The evolution of the UK home shopping sector
• Cost base factors in home shopping
• Specialist home shopping companies
  • Traditional home shopping groups moving into new channels
  • Home shopping in competition with store-based retailing
  
  
• New entrants from store-based retailing
  • Home shopping and store-based retailing are merging into one area
  • The continuing importance of grocery
  
  
• The Internet revolution
  • The impact of Internet retailing on the store-based sector
  
  
• Forecasts
  • The grocery sector will be a key driver of overall expansion
  • The Internet retail sector will demonstrate continued high growth

Appendices

• Glossary
• Sources
• Research methodology
• Retailers' Internet sites
• Index

List of Figures

• Figure 1.1: The ageing UK population
• Figure 1.2: The evolution of new merchandising strategies in the home shopping sector
• Figure 2.3: Pre-tax profit margins in UK retailing: home shopping vs the overall sector, 1993-97
• Figure 2.4: Cost structures of establishing Internet retail sites
• Figure 2.5: Cost structures of running Internet retail sites
• Figure 4.6: There is intense competition among larger retailers to be seen as a 'service star'
• Figure 4.7: Comparison of sales and profitability of Next Retail and Directory divisions, 1995-97
• Figure 4.8: Home shopping in clothing will focus on the mid-market
• Figure 5.9: The UK is among leading potential markets for on-line retailing in Europe
• Figure 5.10: Internet penetration per head in Europe, 1997
• Figure 5.11: Internet retail sector opportunities in western Europe
• Figure 5.12: Internet retail sites need constant investment
• Figure 6.13: Home shopping penetration of UK bookselling, 1996-2002

List of Tables

• Table 1.1: UK retail sales data, 1991-96
• Table 1.2: Major UK macroeconomic indicators, 1994-2000
• Table 1.3: Key retail issues in the transition to a single European currency
• Table 2.4: Investment costs in Internet retail sites, 1997 & 2002
• Table 2.5: The Internet Bookshop: sales and customer profiles
• Table 6.6: Competitive structure of the UK book market
• Table 6.7: Discounting bestsellers: Amazon's approach