Shop Direct – hero of UK e-commerce?
Is Shop Direct the real hero of UK e-commerce?
Lots of retailers selling online have been held up as the next big thing in the sector – particularly in Shop Direct’s fashion category – I’m thinking of Asos, Boohoo, and even Burberry off the top of my head. But not really Shop Direct.
These others certainly garner their fair share of column inches for their digital activities. Maybe it’s because they operate at the fast-paced or more glitzy end of the market. Or maybe it is because they are quoted and so the spotlight inevitably focuses more attentively upon them.
Whatever the reason I was struck by the Top 50 global e-tailers list produced by Deloitte. Included at the top-end of this illustrious list is Amazon, Wal-Mart, Tesco, Macy’s, Best Buy and in the top 20 (in 19th spot) we have Shop Direct.
Its £2.3 billion of sales is just edged by German-based rival Zalando but it comes a little way above John Lewis and Next in terms of online sales. There is then clear light between it and Marks & Spencer and Asos, which is placed in 46th spot.
Sales are not everything of course but it is a good benchmark of the progress these operators are making online. Agreed 84% of Shop Direct sales are online while only 36% of Next and 7.8% of M&S’ sales are over the internet. But we all know where the growth is and all the groups in this table would eagerly like to generate more revenues through their online channel.
Shop Direct is based in Speke (outside Liverpool), it comes from a big book catalogue heritage, the majority of its business comes from an older customer base, and it is a privately-owned business. This all combines to make it not the most obvious candidate to receive an over-indexed level of media exposure.
Somewhere in Speke – I think
But behind the scenes, in a business sense, it is very much setting the pace. It has grown its e-commerce team from 10 people in 2006 to 70 today, with 14 of these dedicated to digital marketing. It doesn’t waste its time and money on wasteful agencies. Since paid search went in-house there has been a 60% increase in revenues. To support its overall e-commerce activities it has made a significant investment in Oracle Commerce – using its Endeca and ATG applications.
In addition, it has been among the first to take a mobile-first approach operating a responsive website. It works very closely with many smaller specialist companies such as QuBit, Taggstar, and Userzoom that help it drive innovation.
It also made the unusual step of investing in a User Experience lab that is fundamental to its objective of making constant iterative improvements to its business – in the same way Amazon approaches its operations.
This forward-thinking mindset has not only benefited consumers but has helped the business attract top quality talent and it now has a strong well-respected team constantly driving the business forward who are also, to their credit, willing to share their knowledge with others in the industry.
Some of this effort has clearly been noticed within the retail industry and only recently Shop Direct was awarded ‘Online Retailer of the Year’ for its Very.co.uk site, and the ‘Overall Winner’ accolade at the Retail Systems Awards. These will no doubt sit alongside their many other awards in Speke.
In these challenging times for the retail sector Shop Direct continues to adopt forward thinking practices that are helping it set the pace in a variety of ways – even if it doesn’t necessarily command the mainstream column-inch premium attached to the Asos’ and Burberry’s of this world.
Glynn Davis, editor, Retail Insider