UK Out Of Town Retailing

UK Out-of-town Retailing 2012: While out-of-town retailing continues to provide opportunities for growth, pitfalls exist. Retailers must ensure that new space is offering sufficient sales gains to warrant expansion. For some players downsizing and scaling back expansion plans is necessary. This report examines the sectors with further potential for growth and those in danger of further closures.

• Use our five year forecasts for the out-of-town market and its six major retail sectors to plan your expansion strategies
• Size your market and understand your position within it with Verdict Retail's space and sales data for each of the six major out-of-town retail sectors
• Understand the impact of online growth on out-of-town retail and get new strategies to address the changing market environment

As grocer expansion continues sales growth for food & grocery out-of-town is slowing. Increased competition and shoppers switching to top-up shopping is weakening demand out-of-town, leaving less profitable space opportunities.Understand how grocer expansion will adjust to the changes in consumer demand and competitive pressures

Older shoppers are being neglected by out-of-town retailers as rising fuel prices and decreased mobility make travelling out-of-town more difficult. These older shoppers are home-owners and thus represent an important target market for home related retailers. Delivery options and public transport links need to be improved to avoid missed sales.

The growth in online retail is less of a threat to out-of-town than town centre, due to the nature of out-of-town products, but still cannot be ignored. Convenient click & collect or click & drive faciities will help out-of-town retailers to adapt to and benefit from increasingly multichannel shopping behaviour.

• What are the risks and benefits of out-of-town space expansion for my sector and for my competitors?
• How will out-of-town retailing change in the next five years and how can I stay ahead of the trends?
• How can I improve sales densities and ensure profitable space performance out-of-town?

Table of contents

OVERVIEW
•About the series

EXECUTIVE SUMMARY
•Main findings

ONLINE RETAIL STRATEGIC CONTEXT
•There are a number of key motivations for opening online stores
Global Internet usage is growing rapidly, although Spain and Italy are lagging behind northwestern Europe
Northwestern European countries show the highest broadband subscriber rate, but southern Europe is catching up
Attitudes to shopping online and online payment are changing, which is fueling the growth of online stores
•There are a number of strategic and operational considerations when developing online
Having an existing retail presence demonstrates sufficient demand for an online sales platform
Legislation plays an important role when deciding which markets to target
A non-transactional website provides a suitable platform from which to trade in a new market
Retailers can enter other channels to complement their online stores
Innovative delivery and collection services are increasingly expected
Payment methods and types of cards used vary globally and are key considerations before market entry
Retailers need to consider investment in a site's core functions and display to attract shoppers
Currency is a growing consideration for retailers, but is largely left unaltered by many
The lack of direct customer interaction makes customer service an extremely important function

STRATEGIC IMPLICATIONS OF THE RISE OF THE ONLINE MEDIUM IN THE EUROPEAN AFTERMARKET
•Domination of the online medium by pureplay e-retailers poses a threat to traditional automotive aftermarket players
•Manufacturers and traditional aftermarket players are seeing their supply chains fundamentally altered
•Low barriers to entry create a competitive environment

RETAILER COMPARISONS FOR SELECTED MARKETS
•Most auto and fast fit centers have no transactional website in place
•Hypermarkets' automotive product ranges are limited to accessories
•None of the featured tire specialists has a transactional website in place despite strong competition from online tire e-retailers
•Some wholesalers offer online portals to commercial customers
•Pureplay e-retailers' offerings mainly concentrate on tires
•Most vehicle manufacturers have no online sales channel
•Online sales of tires are dominated by pureplay e-retailers
•Summary of delivery times and charges for online sales channels in the automotive aftermarket

STRATEGY IN FOCUS: E-RETAIL IN THE AFTERMARKET
•Pureplay e-retailers
Delticom
Pneus Online
Oscaro
etyres
Black Circles (and Tesco Tyres)
eBay BMW Direct
Autobulbs Direct
Other online car services

STRATEGIC ACTION POINTS
•Traditional aftermarket channels have to develop their online offerings
Aftermarket companies should further develop their online presence to take advantage of general commercial trends
•Online services should support physical infrastructure
Create an online presence in markets with physical outlets
Develop a non-transactional web presence with as much detail as possible if a transactional site is not feasible
Provide information on the non-transactional site as to the range of services
•Operational – localize websites and operations as much as possible
Ensure website navigation is as intuitive as possible
Localization should be a core strategy for all functions on a transactional website
Flexible returns options are equally as important as delivery options
Encourage staff to promote the online store
•Payment and delivery – demonstrate cultural awareness in all payment and delivery options
Be flexible in terms of delivery destinations
Minimize the number of clicks from product choice through to close of sale
Accept alternative payment methods such as cash on delivery
Offer flexible delivery options to maximize customer convenience and reduce missed delivery dates
Choose a logistical service provider that will meet your brand's values and your customers' expectations
Integrate your delivery service with your customer relationship management systems
•Marketing – public relations has become an important step before entering a new market
Make promotional banners visible online
Invest in public relations and marketing in crowded markets

FUTURE DEVELOPMENTS
•How will the aftermarket be shaped by trends in e-retail and online platforms?

APPENDIX
•Abbreviations
•Methodology
Retailer information
Internet access and broadband data
Data on Internet purchasing behavior
•Ask the analyst
•Datamonitor's Global Automotive Proposition
Component Insight reports
Channel Insight reports
Strategic Insight reports
Consumer Insight reports
Databases
•Disclaimer

TABLES
•Table: Online transactional presence – aftermarket channels, autocenters
•Table: Online transactional presence – aftermarket channels, fast fit centers
•Table: Online transactional presence – aftermarket channels, hypermarkets
•Table: Online transactional presence – aftermarket channels, tire specialists
•Table: Online transactional presence – aftermarket channels, wholesalers
•Table: Online transactional presence – aftermarket channels, pureplay retailers
•Table: Online transactional presence – aftermarket channels, vehicle manufacturers

FIGURES
•Figure: Global Internet usage, by country, 2009
•Figure: Global broadband subscriptions, by country,
•Figure: Proportion of consumers that shopped online at least once in
•Figure: Main reasons why customers have never made online purchases
•Figure: Proportion of consumers stating concern about fraud as a reason for not shopping online, by country,
•Figure: Payment methods as a share of online transaction values, by country,
•Figure: Some key legislative considerations for online retailers
•Figure: A Kiala collection point instore
•Figure: Pneus Online offers multiple language options on its main site as well as links to individual country websites
•Figure: Displaying of social media links by aftermarket companies (Norauto example)
•Figure: eBay BMW Direct site
•Figure: Wholesaler online portal for commercial customers (Trost example)
•Figure: Amazon hosts car parts online company carparts-discount (UK example)
•Figure: Porter's Five Forces Model applied to the automotive aftermarket
•Figure: Autocenter range of delivery options (Feu Vert France example)
•Figure: Fast fit mobile fitting option (Kwik Fit example)
•Figure: Tesco Tyres/Black Circles venture
•Figure: Euromaster offers a battery service
•Figure: Example of a vehicle manufacturer offering price information but directing customers to dealer (Mitsubishi Accessories)
•Figure: Physical store and online store presence for tire sales,
•Figure: Indicative comparative costs and fulfillment times for delivery by selected automotive aftermarket companies,
•Figure: Example of Delticom's discounted prices (Germany)
•Figure: Example of Pneus Online search function (UK)
•Figure: Example of Pneus Online tire comparison function (UK)
•Figure: Example of Oscaro promotions (France example)
•Figure: Example of etyres price comparison
•Figure: Black Circles offers car servicing
•Figure: Black Circles offers a fitting service with realtime slots shown on its website
•Figure: eBay BMW Direct site
•Figure: Autobulbs Direct price comparison tool
•Figure: Tuning service (Demon Tweeks UK example)
•Figure: Example of a Tesco product with added customer reviews
•Figure: Example of prominent advertising on Autobulbs Direct website
•Figure: Use of social media by aftermarket industry (Renault example)

Related research categories

By sector: Retail (in Off-trade)

By market: United Kingdom (in Europe)