Tesco continues to dominate UK online grocery

Tesco announced their preliminary results for 2013/14 today with “… Strong UK growth in online grocery +11%”

We think this could be a little below the overall market increase on food sales per the ONS statistics which show an increase of around 12.5% as between 2012 and 2013.

Some say they have nearly 50% of the UK online grocery market which we find difficult to accept but they are undoubtedly the number 1.

In TOTAL grocery market share Kantar World Panels latest stats for the 12 weeks to 2 March have the top 5 as Tesco (28.6%) Asda (17.4%) Sainsburys (16.5%) Morrison (11.1%) and the Co-op (6.1%).

We guess the top 5 online would include Waitrose and Ocado with neither the Co-op nor Morrison, at present.

Tesco click and collect are following Asda in setting up collection from 6 London tube station car parks from temperature controlled vans at Osterley, Newbury Park, Rayners Lane, Finchley Central, Arnos Grove and Cockfosters.

This follows Asda’s similar ventures at East Finchley, High Barnet, Harrow & Wealdstone, Highgate Stanmore and Epping.

Waitrose are aiming, a little longer term, for the temperature controlled locker facilitiea which we think could be the future! With a total of 270 London tube stations there’s a way to go yet!

Here are Tesco’s words, extracted from their results announcement, on their online sector

Clicks & Bricks

Our grocery home shopping business continues to grow strongly. We now have over 200,000 delivery saver subscribers and over 260 Click & Collect locations – including our first trials at six London tube stations. We are planning to launch around 50 non-store collection points in 2014/15, as well as adding the service to another 100 stores. We continue to build capability through the automation of ‘goods to person’ at our new Erith facility. This enables us to pick products almost three times faster than in our stores – an improvement on our Crawley and Enfield dotcom-only stores. Our new home shopping vans will be multi-category enabling us to fulfil general merchandise orders and will feature collapsible racking to carry larger items from our new general merchandise range. We will also focus on providing helpful, friendly and personalised customer service at the doorstep, with the roll-out of new training to all customer delivery assistants in 2014/15.

We have also committed to sharper prices this year for our grocery home shopping service, including market-leading delivery pricing and free Grocery Click & Collect. We will continue to focus on our most loyal customers, with a no-risk guarantee and added-value services on our Delivery Saver subscriptions.

The strong top-line growth of online general merchandise and the actions we have taken, such as tightening our stocked range, have reduced the level of financial losses in this business. We now have over 1,750 Click & Collect locations and plan to increase this number significantly. Our product offer on Tesco Direct has grown to over half a million lines, supported by 50 market place ‘Sellers at Tesco’. Clothing online continues to perform strongly, with sales growth of nearly 60% in 2013/14.

This year we launched the Hudl, our very own tablet. It was recently named winner of the ‘ReThink Retail Technology Initiative of the Year’ and we plan to launch a second device later this year. Blinkbox services continue to grow and we launched Blinkbox books last month with hundreds of thousands of books now available to download.”

GO ON increase our UK digital skills

Following yesterday’s Governmental programme aimed at seeking to reduce digital exclusion by 25% by 2016. GO ON UK today announce what they are doing to help Northern Ireland get connected where they reckon that nearly 25% of the adult population nearly 350,000 “…lack the Basic Online Skills needed to send and receive email, use a search engine, browse the internet and complete online forms. Almost a third of businesses and charities are also missing out.”  It’s what we might call a digital coldspot in the UK!

This digital skills programme which has already succeeded in Liverpool and is well under way in the North East aims to deliver a 25% reduction in the number of people below the Basic Online Skills threshold in 12 months.

GO ON UK have already launched digitalskills.com   which is “…aimed at people and organisations who want to inspire and support others to open opportunities online, it’s home to online tools and resources and a map which features over 3,000 UK Wi-Fi hotspots, computer access points and real people wanting to share their digital skills.”

You can GET INVOLVED here

The Basic Online Skills definitions are:

Who are digitalskills.com?

  • They were conceived and created by Go ON UK, the UK’s digital skills alliance.
  • Their chair is Baroness Lane-Fox and the founder partners are Age UK, BBC, Big Lottery Fund, EE, e-on, Lloyds Bank, Post Office and Talk Talk. The site is also supported by the Department of Business, Innovation & Skills.
  • digitalskills.com was built by Carswell Gould and continues to be developed based on your feedback. Tell them what you’d like to see.

Smart Inclusive Government

 Gartner have come up with the 10 strategic technology trends for smart government which include:

  • Personal Mobile Workplace  - Government IT organizations may have an illusion of control, … However, the reality is that employees, depending on demographics, personal preferences and pressure to improve performance, can decide how much they want to use corporate information and applications versus personal information and applications.
  • Mobile Citizen Engagement - Several inquiries with Gartner government clients reveal an interest in providing citizen-facing services using mobile devices, as well as leveraging social software functionalities.
  • Big Data and Actionable Analytics – Governments are searching for ways to use big data to gain business process efficiencies and reduce costs, but are having limited success.
  • Cost Effective Open Data – Governments become both providers of open data to each other and to the public at large (the latter just for public data) and consumers of open data coming from other parts of government as well as from businesses, NGOs and citizen communities.
  • Citizen Managed Data -  Citizen data vaults are services that provide data subjects with the ability to access their data outside the context of a particular government transaction, allowing them much-finer-grained control over when and how data can be accessed, and by whom, within the relevant legal framework that they are subject to.
  • Hybrid IT and Cloud – The main objectives pushing cloud adoption have been cost reduction, speed of procurement and deployment, and responsiveness to regulations and needs for cost cutting. The public cloud is also gaining momentum as governments seek savings via consolidated procurement.
  • Internet of Things – Governments, as well as most enterprises and technology vendors, have yet to explore the possibilities of an expanded Internet and are not operationally or organizationally ready.
  • Cross Domain Interoperability – Smart government initiatives depend on interoperable information, data obtained from external as well as internal sources, and processing and delivery networks that effectively integrate planning, performance analysis and business operations.
  • Business Process management (BPM)  for Case Management - There isn’t one market for case management because all cases are not the same.
  •  Gamification for Engagement – Gamification can be used by government to motivate interactions with citizens or to achieve more meaningful levels of engagement with employees.

Elsewhere our Government is seeking to smarten more of us up via their Digital Inclusion Strategy  aiming to reduce the number of people who are offline by 25% by 2016.

We hope they achieve, or in fact exceed, their target.

The Internet of Everything Reinvents the Wheel

Cisco in the form of their UK & Ireland CEO Phil Smith at the launch of their “The Internet of Everything: Bringing the future to life” report yesterday said ” With just 1% of the physical world connected at this time, this is just the beginning of an amazing future.”

They reckon that by 2020  50 billion “things” will be connected globally. So that’s 7 for every one of us!

The report itself looks at the UK situation in 5 main areas:

  1. Healthcare: The innovations anticipated are almost endless and range from wearable video cameras for emergency response units through connected asthma inhalers to smart pill boxes.
  1. Retail: Not only will the high street be smarter they think it will be intelligent as well. “For example, as a consumer moves through the high street and into different shops, an integrated Internet of Everything strategy can see them receive different location-specific content. Marketing tools will enable retailers to provide offers through push notifications, while time-related promotions will encourage consumer spend. Done right, cross-promotion based on immediate location will drive visitors from one retailer to visit others locally. All the while, consumer analytics based on demographic information and activity, such as dwell time conversion rates, and retailers also visited, will provide an intelligence service to improve the customer offer.”
  1. Transport: We can look forward to “Stations-as-a-Service” smart cities smart parking an numerous other evolutions as we reinvent the wheel!
  1. Energy: We will be connecting to conserve.
  1. Manufacturing: “Today, just 4% of devices in that space (the manufacturing floor) are connected to a network of any kind; connecting more could help to dramatically reduce wastage and error.” Consumers’ relationships with purchases are being transformed as sensors and monitoring devices are built into not only the production process but also products themselves. “Cradle-to-grave” strategies tracking product lifecycles from the raw materials in the field through to refurbishment and renewal present manufacturers with major opportunities in the face of spiralling costs and dwindling resources.

The future’s bright the future’s connected.

Dashing amazon

Click to enlarge

The “Dash” has appeared!

Amazonfresh  their, somewhat embryonic, US based (Seattle, San Francisco & Los Angeles areas only at present) food store delivery service announced the (limited) availability of this new device last week. It’s by invitation only following application.

The trial we think is only available to Amazon Prime Fresh members (who subscribe to an annual membership fee costing  $299 – the standard prime membership is now $99). Prime Fresh membership is currently available only in the Southern California and San Francisco, CA Metro areas. It sort of gives you the usual prime membership benefits plus free (next day) grocery delivery on orders over $35 ish.

Following the introduction of the TV set top streaming box last week the Fire TV with “voice search” this is the next device including this ability. In addition to the voice search for items it also has a scanning function for barcodes.

As ever via your WI-fi setup the device transfers your spoken and scanned items in this case to your amazonfresh account which can then be edited and submitted for order from your desktop/laptop or mobile app.

Seems to make a lot of sense to us although it does, sort of, introduce yet another remote to the household.

Here’s their promo video.

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Disclosure: We have marketing affiliate arrangements with Amazon

Around the world in 22 days

Google’s Project Loon has just had one of their balloons circumnavigate the world (sort of) in 22 days.

The balloon I-167 is part of the project to set up a “ network in the sky” to bring internet access to, in particular, the billions in the southern hemisphere who are not connected.

The 500 square metre balloon set off from New Zealand and circled Antarctica crossing South America before going some way south of Australia.  

Click to enlarge

As it started the second lap balloon I-167 clocked up the half millionth kilometre mark in terms of the projects total balloon travel.

Since mid last year a couple of major  improvements have helped the navigation of the balloons:

  • “we’ve been using the wind data we’ve collected during flights to refine our prediction models and are now able to forecast balloon trajectories twice as far in advance.
  • In addition, the pump that moves air in or out of the balloon has become three times more efficient, making it possible to change altitudes more rapidly to quickly catch winds going in different directions.”

We prefer balloons to drones and are fascinated by this project which can be followed on Google+

Here’s Googles video of the making of their balloons and why they last so long.

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.

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.

Desert Island Clicks – The Brits

Nominet (via Opinium) in connection with the 25th anniversary celebrations carried out some online polling of 2,001 (an appropriate number we thought) UK adults earlier this month

They were asked to choose their “Desert Island Clicks” and the results are as per our table.

The top 8 or so British Websites March 2014
Nominet  Alexa 
1 Facebook 24% 1 Google.co.uk
2 BBC 20% 2 Google.com
3 Amazon 9% 3 Facebook.com
4 Gmail 5% 4 YouTube.com
5 Yahoo 5% 5 BBC.co.uk
6 ? 6 ebay.co.uk
7 ? 7 Yahoo.com
8 ? 8 Wikipedia.org

For comparative purposes we’ve added Alexa’s current listing of their top 8 (from their top 500 UK sites) which represents actual clicks!

Nominet have a celebratory site re the anniversary at Story of the web where they are “…inviting web users to add their own milestones and predictions”.

Continuing with the Desert Island Discs theme the apparent Luxury Item / greatest benefit from the web chosen by us Brits was “Finding old friends”. Not sure what the book would have been – possibly one of the eight Harry Potter ones – kindle edition of course!

We were disappointed to see that Tim Berners-Lee had never been on the programme – surely a significant omission!

At 25 + one day – Get Involved

Recalling the theme of his famous tweet during the 2012 Olympics opening ceremony, “This is for Everyone”, Berners-Lee said:

 “The Web’s billions of users are what have made it great. I hope that many of them will join me today in celebrating this important milestone.  I also hope this anniversary will spark a global conversation about our need to defend principles that have made the Web successful,  and to unlock the Web’s untapped potential. I believe we can build a Web that truly is for everyone: one that is accessible to all, from any device, and one that empowers all of us to achieve our dignity, rights and potential as humans. Tell us about your dream for the Web with #web25.”


“ Get involved in shaping the web”

W3C -  World wide web Consortium

WORLD WIDE WEB FOUNDATION