Lessons From The Top 1000 European Retailers
RetailX is a research and analytics organisation, specialising in the analysis and ranking of top multichannel retailers and brands. RetailX produces regular reports, often geographically based, containing detailed analysis of market performance, consumer trends, and top leading retailer performance - notably including the trends and approaches that these retailers employ.
In this post, as part of the C3 eCommerce TL;DR newsletter, I summarise the state of the European markets and retail spending, and highlight what I feel are the key takeaways from this year’s Top1000 Europe report. This is intended to be short-form, for those who don’t have the time to read the entire 55 page report. For reference, or indeed if you wish to learn more, you can head on over to the RetailX website to access the entire, comprehensive Top1000 Europe report, including all stats.
The State of Retail
Inflation rates have been incredibly high this year across most European markets, due in large part to the tail-end of the Covid pandemic, the war in Ukraine, and more recently the Israel-Gaza war. This has caused a rising cost of living in many areas, and has put considerable pressure on consumers’ purchasing power.
The RetailX report’s data covers a period up until June this year, and since then inflation has generally fallen across the board. According to this eurostat euroindicators report published a few weeks ago, the euro area annual inflation rate was 4.3% in September 2023, down from 5.2% in August. A year earlier, the rate was 9.9%. However, in regards to retail spending, this has seen also seen a decrease, with the volume of retail trade down in August 2023 by 2.1% in the euro area and by 2.0% in the EU compared with August 2022.
In the UK, according to the ONS we’ve seen the Consumer Prices Index (CPI) rise by 6.7% in the 12 months to September 2023, the same rate as in August, and down from a recent peak of 11.1% in October 2022. Retail spending has fallen by 1% in September 2023 compared to a year earlier.
So in summary, times are still tough for most retailers. Read on for an overview of consumer trends during this challenging period, and following that, what the top performing retailers are doing.
Current Consumer Trends
TrendAction(s)Shoppers are avoiding premiums wherever possible. Retailers can increase the likelihood of customers purchasing, by offering cheaper, or free, shipping options.Review your shipping options. Do you offer a cheaper option, compared to fast, premium delivery? Are you able to offer free shipping options? To protect your margins, you might consider offering free delivery only on baskets over a certain value.Consumers are purchasing more directly from brands - either via their own websites or via marketplaces.If you don’t currently sell via marketplaces, now would be a good time to consider this. Marketplaces are incredibly popular with consumers, and there are more options now than ever before. This can be a great way to increase customer reach.Mobile app usage is in declineNow may not be the best time to invest heavily in a mobile app. Instead consider investing further in your eCommerce website. As a general rule, the best starting point is reviewing your data, and making informed decisions on where to optimise, improve and evolve.TikTok share in retail sales is growing rapidlyTikTok has a suite of eCommerce focused tools for retailers, including TikTokShop, with existing integrations for most of the major eComm platforms. Consider selling on this hugely popular platform to increase customer reach.Use of loyalty schemes risingInvest in your customer loyalty scheme to increase repeat sales and Customer Lifetime Value, as well as to gain valuable insight into your customers. Consumers are generally willing to trade their data in exchange for rewards. You can then use this data to further improve the shopping experience for your customers.
Don’t have a loyalty scheme? Now’s a great time to consider introducing one. Data is playing an ever more important roleReview your eCommerce business intelligence. Use the data you’re collecting to determine how your customers want to shop, rather than how you want them to shop. Optimise the experience based on custom behaviour and feedback, and watch sales rise.
European Top 1000 retailer trends - consider doing these!
I hope you find the above useful - even if this validates what you are currently doing. There is much more detail in the report, and if you have the time, I recommend checking it out. And of course, if you would like to chat with us at C3 about optimising your eCommerce experience further, and really making it sing, we would be delighted to hear from you.
