Amazon remains the one to beat in online retail with three representatives in the top 10 of this year’s Etail Power List.
The growing hold of online giant Amazon on UK consumers is plain to see in the outcome of this year’s Etail Power List.
Not only has chief executive Jeff Bezos retained his crown as the most powerful person in online retail, but two of his UK lieutenants – new country manager Doug Gurr and vice president of Amazon Fresh, Ajay Kavan – join him in etail’s top 10, in positions three and seven respectively.
This is illustrative of how important Amazon is becoming to the UK’s growing legion of online shoppers. The retailer took home a quarter of all UK non-food growth in 2015, according to UBS, and its push into more and more product categories would suggest this growth is likely to continue.
This year, Amazon made its much-anticipated move into grocery with its Amazon Fresh launch in June.
It launched with an impressive 130,000 products and vowed to give its customers everyday low prices and fast delivery, with same-day fulfilment available.
Within a month, Amazon Fresh had more than doubled the amount of postcodes it delivers to and continues expand at a rate of knots.
“Analysts Verdict believe Amazon will have a 0.6% share of the fashion market this year, compared with Asos’s 1.4%. It now stocks thousands of brands, including Hugo Boss, Ted Baker, French Connection and Vivienne Westwood”
However, food is just one area in which Amazon is vying to become a serious player. It has also pushed its fashion offer over the past year.
Analysts Verdict believe Amazon will have a 0.6% share of the fashion market this year, compared with Asos’s 1.4%. It now stocks thousands of brands, including Hugo Boss, Ted Baker, French Connection and Vivienne Westwood.
Amazon clearly means business in fashion, and this year hired former M&S womenswear boss Frances Russell and ploughed investment into promoting its offer with a Europe-wide TV ad campaign.
And it’s not just Amazon’s ever-growing retail offer that keeps Bezos top of the pile. Its industry-leading fulfilment offer, growing array of extra services – from TV and music streaming to restaurant deliveries – and development of innovative new tech, from instant product reordering button Amazon Dash to its voice-controlled speakers Amazon Echo, show Bezos is making sure the etailer always leads and never follows.
That unwavering devotion to innovation is why Bezos remains etail’s – and indeed retail’s – most influential leader.
Working with technology giants
The tech giants that help broaden the reach of retail have made their way into this year’s Etail Power List. Google and Facebook are extending and improving their tools and services to help connect shoppers with the right retailer at the right time with the right product.
Google has long been vital to retailers through its mighty search engine; however, its shopping platform, Google Shopping, is gaining traction too.
Retail revenue coming from the image-based product ads jumped 52% in the first quarter of 2016. Google is also enabling retailers to tailor Shopping campaigns to specific consumer sets, such as high-value customers.
Meanwhile, Facebook seems to have finally cracked social commerce and is becoming an important advertising platform for retailers.
Over the past 12 months, Facebook has launched local availability adverts that show users products that are available at nearby retail outlets in real time; tested a ‘buy’ button on retailers’ brand pages; and launched its ‘chatbot’ direct messenger service, which allows retailers to communicate with shoppers directly.
Working with these tech partners is helping retailers better connect with their existing customers and forge relationships with new shoppers.
It’s all about choice
Amazon isn’t the only multi-brand site that is going from strength to strength. Leaders from platforms such as Asos, Zalando and NotOnTheHighStreet are among the highest risers in this year’s Etail Power List.
This shows the importance of choice for today’s consumer. There are a limited amount of destinations that consumers naturally visit online. If shoppers want to make sure they will find the product they are looking for, multi-brand sites are an obvious port of call.
“New Look, for example, reported that third-party ecommerce sales grew at more than three times the rate as those via its own website”
This is why third-party ecommerce platforms are an increasingly important sales channel for retailers. New Look, for example, reported that third-party ecommerce sales grew at more than three times the rate as those via its own website in its last financial year.
These platforms can also be a gateway for international growth. Zalando in Europe, Alibaba and JD.com in China, and Flipkart and Myntra in India, are now seen as the route for retailers to crack overseas markets.
Multichannel mergers and etail powerhouses
Mergers and acquisitions have been high on the agenda in etail over the past year. Sainsbury’s Mike Coupe comes crashing straight into the top 10 of the Etail Power List due to the supermarket’s £1.4bn acquisition of Argos owner Home Retail last month.
The merger is designed to create a multichannel powerhouse and meet today’s consumer expectation of being able to shop “whenever and wherever they want”.
Coupe believes customers want to shop across all channels – store, online and mobile – and have their goods delivered through a number of fast, flexible methods. Argos’s strength in online and fulfilment, where it offers same-day delivery services, will help Sainsbury’s better meet these customer needs.
Sainsbury’s is one of many retailers that have acquired businesses to gain a stronghold in the fast-growing digital world.
Bicycle etailer Wiggle snapped up rival Chain Reaction Cycles, and Italian luxury etail group Yoox bought Net-a-Porter to create a luxury super-group over the past year. The leaders of both businesses are among the high-risers in this year’s Etail Power List.
Meanwhile, others retailers such as Morrisons have opted to form partnerships with big online players. Chief executive David Potts struck a deal to supply Amazon and expanded its contract with Ocado to enable the roll-out of Morrisons.com across the UK.
The grocer’s chief executive makes his debut on the Etail Power List at number 20, in view of his vision to use the might and expertise of these online leaders to boost his own business.
These mergers, acquisitions and partnerships show how important etail is for growth, and the market is primed for more consolidation and ground-breaking tie-ups in the year ahead.
What etail leaders said this year
“If the deal goes ahead it will create a non-food business at the scale of John Lewis, Amazon or M&S.” Mike Coupe, chief executive, Sainsbury’s
“The genie is out of the bottle – online was the big winner last year. There were pretty ugly scenes in retail last year with people knocking seven bells out of each other to grab a bargain. You can sit on a couch and order with no-one punching you in the face and get a TV for next to nothing.” John Roberts, chief executive, Ao.com, on Black Friday
“I believe we are the best place in the world to fail (we have plenty of practice!), and failure and invention are inseparable twins.” Jeff Bezos, founder, Amazon
“I don’t expect to be able to regain the competitive advantage we had two or three years ago.” Lord Wolfson, chief executive, Next
“Ultimately, personalisation is only as good as what you know about your customers. The future is to develop and unearth richer and richer data.” Jonathan Wall, ecommerce director, Shop Direct