Keep an I on our Week, Spring Forward, Fourteen, edition

Our top three articles this week were

We also had on Friday our regular feature on the latest internet retail sales figures for February

Our favourite violinist Lindsey Stirling has  released the first track – Beyond the Veil – and associated video from her upcoming new album Shatter Me which is due for release in the US towards the end of April. It can be pre-ordered on Pledge Music here in the UK.

Well leave you with her video.

British Internet sales increase by 2.5% in the month

Yesterday The Office for National Statistics (ONS)  published the monthly retail sales figures for February (pdf) Full details  are available on the ONS site.

Overall figures showed an increase in sales of 1.7% on last month which was 3 times greater  than expectations.

We are as last month adopting for our internet sales figures the new seasonally adjusted statistics issued by the ONS. As this is only the second first month of usage there will likely be certain updates in future months! January 2014 was the one year in six when an extra week occurs statistically and we have annotated our headline graph to show an approximately comparable level of sales.

Our Internet sales headlines:

  • Internet sales remain at over 10% of all retail sales (excluding automotive fuel) for the 12th consecutive month.
  • Compared to January internet sales rose by 2.5%  contributing 17.2% (£16.8 million) to the overall retail sales increase in the amount spent of  £97.7 on a weekly basis.
  • Online food sales continue to exceed £100 million a week for the fifth consecutive month and increased by 3.1% in the month
  • For every £1 spent in the online retail sector 47 pence was spent on non-store retailing 37 pence in non food stores and 16 pence in food stores!
  • We do think the ONS needs to do more analysis of internet sales as already nearly half 47% this month are effectively categorised as sales by online retailers virtually irrespective of the underlying goods or services! 

February and year to date stats for internet sales:

  • Months sales 10.7% (10.6% last month 9.9 % a year ago) of all retail sales
  • Monthly year on year increase of 12.4%.(10.9% last month 14.3 % a year ago)
  • Moving Annual total increases (1) on January 2014 annualised +9.1% (2) on January 2013 +17.2%
  • The UK’s *largest online retailer is included in the group Non-store retailing and this sector shows growth of 12% on 2013 and accounts for nearly 50% of all online retail sales. This is an area which SHOULD just grow & grow unless further analysis is undertaken of this channel!

The ONS words this month (which contain a mix of seasonally (SA*) and non-seasonally adjusted (NSA) figures are:

Key Points

The amount spent online increased by 12.4% in February 2014 compared with February 2013 and by 2.5% compared with January 2014.

Internet Sales in Detail

Seasonally adjusted Internet sales data are provided within this release. These seasonally adjusted estimates are published in the RSI tables (1.65 Mb Excel sheet) and include:

  • A seasonally adjusted value index; and
  • Year-on–year and month-on-month growth rates.

Internet sales are estimates of how much was spent online through retailers across all store types in Great Britain. The reference year is 2010=100.

Key Points

  • Average weekly spending online in February 2014 was £678.8 million. This was an increase of 12.4% compared with February 2013.
  • The amount spent online accounted for 10.7% of all retail spending excluding automotive fuel.
  • The online spend in department stores was estimated at 22.0% of all spending in these stores.

Table 4 shows the year-on-year growth rates for total Internet sales by sector and the proportion of sales made online in each retail sector.

Table 4: Summary of Internet Statistics for February 2014

We have added our annotations to the ONS table – The bold categories/ figures in the table are the primary constituents of the total (ie (a) + (b) + (c) = All retailing). Dept. stores, Textile etc, Household etc and Other stores are simply an analysis of (b) All non-food.

We have also added the weekly Internet sales figures by sector and the proportion they represent of all online sales.

We have used seasonally adjusted figures throughout in our table

Sector summary

The non-store retailing sector comprises of stalls and markets, mail order and those retailers that sell mainly online.

+ Whilst the ONS will not confirm the names of specific retailers within categories they did say that retailers selling wholly online with no physical outlets would be included in the Non store retailing category along with eg online  mail order retailers.

The moving annual total, which we report, moved up again (it has increased EVERY MONTH since January 2009  to an all time high of £34.6.billion an increase in the month  of 0.9% annualised 9.1%. The average this year is 18.9%. The long term compound average growth rate is 23.0%.

The published weekly figures was £678.8 million which exceeded our estimate. The moving annual total and £34.6 billion was in line with our expectations!

The average monthly increase has been around 1.6% but we’re goin for another above average March increase so are looking for £695 million and a moving annual total of close to £35 billion

We have again included our experimental graph (e & o e!) showing the relative internet and non-internet, moving annual total, sales from late 2007 by month. As before it highlights that high street sales have been and continue to go nowhere! As, we have mentioned before, the Boston Consulting Group forecast  in their report (The $4.2 Trillion opportunity) http://i.co.uk/?p=4721 that this trend is likely to continue with the high streets market share contracting at around 2.75% a year from 2010 through 2016. Due to the exceptional 5 week month in Jan 2014 there is a 6 yearly jump to allow for the 53rd week!

Further details and explanations are either in the ONS release on the statistics or on their website. As previously mentioned a retail convention of a 4, 4, 5 week quarter is used by the ONS (March June September and December are 5 week months). To cater for the inconvenience of years not having 364 days every 6 years or so an extra week is included in the statistics. The ONS adds this in January which happened this year the last one being in 2008.

Brits online 2014

IPATouchPoints5  have just published data from their latest survey concerning the UK consumer technology environment.

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They discover that nearly half of us own smartphones and a quarter tablets which moves up to nearly 40% availability on a household basis.

On average we now spend 2 ½  hours a week online a week v’s 2 hours in 2012. In terms of devices, desktops/laptops still take up the majority of this time (54%) followed by smartphones (32%) and tablets (11%).

The activities we undertake online are led by emailing (80% of all adults do this weekly), browsing and looking for services and products (70%) with social networking on the increase (54%).

97% of us still watch television on a television set each week with 13% watching on our desktop/laptop, 8% on a connected TV (presumably both  smart and via set top boxes and other streaming devices), 5% on a tablet and 4% on a smartphone.

On the reading front 54% of us still read print versions of newspapers and magazines with 8% reading on our desktop/laptop, 6% on a smartphone and  4% on our tablets.

As regards to listening to the radio 75%  listen to the radio on a radio or TV set each week with 9% listening on desktops/laptops 9% listen on a smartphone and 4% listen on a tablet.

On the shopping front 90% of us still visit and shop in the high street every week with 5% via a PC and 2% each using smartphones and tablets.

“The survey, conducted by Ipsos MediaCT, questioned 5,100 adults aged 15+ through a substantial self-completion questionnaire and an e.diary that collected data every half hour for a week on how they were spending their time, their opinions, and the role of media in their lives.”

Britain is mature but nearly all of Europe is not

RetailMeNot and the Centre for Retail Research recently got together some comparative statistics for online retail sales in GB, the USA and Europe (Great Britain, Germany, France Italy, Spain, Sweden, Poland and the Netherlands).

At an overview level they foresee in 2014 online retail sales of:

  • USA €306.0 bn
  • Europe €155.3

So as near as makes little difference the US is double Europe. Britain at £45 bn or €62.8bn represents the largest European market at just over 40% of the total. Germany is forecast to be the next largest at €49.4 or just over 30%.

In their accompanying infographic they show, inter alia EVERY bricks and mortar or high street market in all 9 countries contracting in 2014.

Their view is that these 9 countries are at three  different “… stages in online market development and business strategy:

  • Maturity – market share of 9.5% or above, 55%+ of the population are internet shoppers, rapidly developing mobile use (15%+ of all online in 2014), multiple online providers throughout each sector and 12+ purchases pa by each shopper.
  • Mid range – market shares of 6.5% to 9.5%, a wide range of suppliers, more than ten purchases pa per shopper, 45% are online shoppers and a smaller mobile use.
  • Immature – online market share below 6.5%, patchy takeup (regionally or demographically) of online retailing, fewer than ten purchases pa, and some trade sectors are comparatively less developed.”

We wouldn’t disagree but we think one of the key drivers of market change in online retail sales is likely to be in the food sector where eg in Britain currently only something like 3.5% of this huge market is sold online. Excluding automotive fuel in January in Britain over 47% of the TOTAL retail spend was on food!

This research foresees a huge expansion in online mobile (smartphones & tablets) device retail sales  this year with Europe increasing from 8% to 13.1% of the total and in the US a comparable increase from  13.8% to 19.9%. It could be said here that Europe is a year behind the US!

Britain again leads Europe with, they forecast, 17.6% of online retail sales being made using mobile devices in 2014.

A most impressive piece of work

We repeat below the details they provide on their methodology.

Methods

The statistics are problematic as state statistical research organisations often tend to underestimate the size of the sector, because conventionally they are best at collecting information from companies that own retail shops. There can be problems in determining online sales from abroad, because UK statistical authorities may not be fully aware of their scale, foreign firms may not wish to comply fully with UK statistical needs, and sampling may be problematic as a result of rapid sector change. There are important issues about whether to include mail order when it is mainly online and how to account for partial online ordering such as click and collect. Other issues include the definition of ‘retail’ where US authorities seem to combine food services (cafes and restaurants) within retail, which is not the case in Europe. However in Europe and the US fuel for cars is normally included as ‘retail’ but as this is not the retailing of goods and would be difficult to sell over the web we have attempted to adjust our estimates to take account of this.

The relative safety of Top Level Domains

As ICANN is in the midst of authorising the addition of over 1,000 new gTLD’s to the namespace Architelos publishes its latest Namespace Quality Index. The “NQI measures the relative concentration of abusive domain names in any given namespace, thus providing a comparative measure of safety”

“Specifi­cally, the NQI measures the number of abusive domain names per million (APM) Domains Under Management (DUM) in a TLD. The types of abuse include domains used for phishing, malware, botnet command-and-control, and domains advertised via spam sent from botnets and by other abusive means. The domains are reported by trusted security sources including Internet Identity, SURBL, Spamhaus, MalwareURL, ZeusTracker, SpyeyeTracker, and Malware Domain List.”

In their chart they then calibrate the TLD’s between:

  • Excellent – < 100 abusive domain names per million (APMs)
  • Good – 101 -1,000 APMs
  • Caution – 1,001 – 10,000 APMs
  • At Risk > 10,000 APMs

In terms of the overall ranking, the currently most utilised domains, both gTLD’s and country domains, aren’t over impressive apart from New Zealand (.nz) who are at #6 and Germany (.de) at #16 who have moved up 38 places since the previous publication of the index. .uk at # 55 ranks above .com and .org.

  • .nz – # 6
  • .de – # 16
  • .ie – # 19
  • .uk – # 55
  • .org – # 59
  • .co – # 57
  • .com – # 58
  • .cn – # 61
  • .net – # 62
  • .ru – # 68

Ireland (.ie) at number 19 deserves an honourable mention wheras Russia (.ru) in the red zone at # 68 does not!

Here’s the whole list:

Keep an I on our Week, World Water Day edition

Our top three articles this week were:

  1. Phlok to Save the High Street 
  2. Mind the Omni-channel Gap 
  3. Global Music Streaming Subscription average $40

It’s the World Water day. First introduced in 1993 by the UN declaring March 22 as “World Day for Water.”

We’ll leave you with their, slightly dated (2012) but excellent animated video.

Digital degrees from Harvard

Well, sort of!

The Harvard Business School  today have announced their “ … first online offering.”

Known as HBX “The .. launch marks an important milestone in our ongoing efforts to educate leaders who make a difference in the world,” said HBS Dean Nitin Nohria. “HBX embodies the highly engaged, interactive learning that has been a hallmark of the School’s MBA, Doctoral, and Executive Education programs for more than a century.  Moreover, HBX will provide a powerful channel for communicating ideas to and engaging with new and wider audiences, complementing the work we do through Harvard Business Publishing.”

“The initial HBX offering is  CORe (Credential of Readiness), comprises three interlinked courses:  Business Analytics, Economics for Managers, and Financial Accounting. They describe it as their primer on the fundamentals of business and is designed for college juniors and seniors, non-business graduate students, and those in their early careers.”

From their FAQ’s “… the introductory June 2014 three-course sequence is $1,500.”

You can then on your CV boast eg ” HBX Credential of Readiness (CORe), Pass with High Honors, September 2014.”

“This will launch in June for local students and later this year HBX will introduce a series of specialised courses for executives on topics such as entrepreneurship and innovation; disruptive innovation, growth, and strategy; and the microeconomics of competitiveness.  Over time, HBX expects to roll out more courses that build on the HBS faculty’s influential research.

Finally, HBX will introduce HBX Live, a virtual classroom that collapses geography and allows participants worldwide to interact directly with one another and a faculty member in the same way they would in a campus-based HBS class. Harvard Business School has partnered with the public broadcasting company WGBH to create a state-of-the-art space that will allow virtual engagement with up to 60 participants at a time. HBX Live will launch in Summer 2014 and be available initially on an invitation-only basis.”

Well worth a look and a “watch this space” bookmark we think!

Global Music streaming subscriptions average $40

IFPI  the voice of the recording industry worldwide who  represent the interests of 1,300 record companies from across the globe have just produced their music sales reports for 2013.

To get an overall perspective the total market has contracted by some 3.9% in value terms compared with 2012 but this is entirely due to the Japanese market which is still being disrupted. Excluding Japan we reckon the rest of this world basically flatlined. Europe is the largest world regional market with just under 36% of the world market.

In format terms Digital still trails physical but continues to grow (4.3% in 2013) but at a slower rate than in the earlier part of this decade when it was running at double digit levels.

Subscription streaming services are in revenue terms expanding at a remarkable rate and at $1.1 billion now  represent just shy of 20% of all digital revenues.

The average (paid) subscription per subscriber rose by 8.1% last year and is now just under the $40 (£24) level:

  • 2013 – $39.68
  • 2012 – $36.70
  • 2011 – $34.62
  • 2010 – $40.25

Much much more from IFPI particularly on the digital front

Streaming Dongles from Google and amazon

Todays news is that Google’s Chromecast is now available in the UK (and 10 other countries Canada, Denmark, Finland, France, Germany, Italy, Netherlands, Norway, Spain and Sweden).

Whilst the price in the UK of £30 is a bit on the high side compared to its US equivalent of $35 it’s still well below the Roku competitor we mentioned a little while back which comes in at  £49.99.

In the UK the ubiquitous BBC iPlayer is available on the Chromecast.

It can be acquired from Google Play and many retailers including of course amazon

Talking of which there is general expectation that they will announce a device in the very near future (possibly April) but if history is anything to go by it will initially only be available in the US. We shall see and report back after its appearance.

We’ll leave you with Google’s little video to whet your casting appetite!

Mind the Omni-channel Gap

Accenture and hybris software (an SAP company) have done one of these, we think rather revealing, studies of customer expectations vs retailers realities in the USA, UK France and Germany.

The gaps in this instance are rather wide!

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“The research indicates that many retailers are operating with a ‘false state of omni-channel comfort,’” said Brian Walker, chief strategy officer at hybris. “The reality is that the customer is way ahead of many retailers in defining what competitive shopping patterns are, not only across channels, but within each channel. If retailers are unaware of, or unwilling to acknowledge, these competitive threats then their business will go to other retailers agile enough to plug these gaps, and so provide the omni-channel sales experience customers are demanding. Retailers that fail to understand the significance of this gap in service and sales delivery are leaving themselves exposed to a significant competitive disadvantage.”

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The four main overall findings from the study (pdf)  found;

  • Technology investment is critical to enabling exemplary omni-channel customer experience.
  • Omni-channel customer experience is now a brand differentiator.
  • Many retailers have reached a false state of omni-channel comfort.
  • New titles alone won’t cut it — retailers must abolish siloed channel strategies altogether.

Accenture and hybris commissioned Forrester Consulting to conduct an online survey of 1,503 omni-channel shoppers and 256 retail and manufacturing organizations in the US, UK, France, and Germany. The study (Customer Desires Vs. Retailer Capabilities: Minding the Omni-Channel Commerce Gap) was completed in December 2013.