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UK Electricals Retailers 2010 |
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Introduction
Verdict Research: The onset of recession and a weak technology pipeline has seen electricals sales plummet over the last two years. At the same time, competition for market share is intensifying, as the likes of the grocers, online players, John Lewis and Best Buy expand. Consequently, retailers are having to formulate strategies to protect margins which are under unprecedented pressure.
Scope
*Market size, sales and growth rates to 2010 for the electricals market overall and for seven subcategories.
*Comprehensive profiles of all significant UK electricals retailers including Argos, Asda, Comet, DSGi, Game Group, Jessops, John Lewis and Tesco.
*2004-2009 market share data for all major sector participants.
*Space allocation data for all key retailers for 28 product categories.
Highlights
Electricals is set to be the second worst performing retail category in both 2009 (declining by 7.0%) and 2010 (declining by 3.5%), only outperforming furniture & floorcoverings. Moreover, with non-specialists and online players continuing to grow, the outlook for specialists is even tougher.
The video games market has now entered a massive decline, due to this life-cycle of consoles reaching maturity. Consequently brown goods have fallen to 51.8% of electricals spending in 2009, down from 52.7% in 2008, with white goods making a small recovery, due to a stabilisation of the housing market.
Retailers are developing their own brand lines, in an attempt to give them a point of difference. Another noticeable shift has seen specialists fostering closer links between their electricals and entertainment offers. PC World, Apple and HMV have been conspicuous proponents of this and it is likely to be a key component of Best Buy's strategy.
Reasons to Purchase
*Benchmark your performance against your competitors and compare future development plans.
*Establish how the market will perform over the next year, identifying the opportunities offered by individual product categories.
*Gain competitive advantage by understanding the strengths and weaknesses of all significant players in the UK electricals market.
2004-2009 264 |
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Table of Contents : |
CHAPTER 1 EXECUTIVE SUMMARY 6
Key findings 6
The electricals sector has been though a difficult two years 7
The category has felt the full impact of the recession 7
A small recovery in white goods has seen the category declining less heavily than brown and grey goods 7
New technology has become a dampener, rather than a driver, of growth 8
The market is becoming increasingly competitive 8
Specialists continue to decline 8
It is increasingly difficult to differentiate 9
Online growth is slowing, but it continues to outperform other channels 9
The sector continues to move away from the high street 10
Margins continue to fall 10
CHAPTER 2 KEY ISSUES 11
Margins are falling 11
Costs have risen ... 12
... but falling demand has made it difficult to pass on higher costs 12
Consequently, margins have taken the hit 12
Retailers need to take decisive action 13
The impact of new technology is changing 14
Technology pipeline slowing 14
Advances that have been made have been much less dramatic 14
Technological convergence reduces demand 15
Retailers must now adapt 15
Online is growing in importance 16
Biggest online market 16
Electricals is one of the most robust online sectors 16
Online growth used to offset declining space 16
Looking forward, online share of white goods in particular should increase. 17
M-commerce will also take off ... 17
... but overall online electricals growth is now beginning to slow 17
Price becomes more important driver of online electricals spend 17
Electrical retailers need to improve delivery options 18
There is a move away from high street retailing 19
Out-of-town is better suited to electricals retailing 19
Indeed, out-of-town has proven more resilient in the downturn 19
Non-specialists and niche players are picking up what is left of high street spend 20
Comet is also trialling a high street format 20
However, the high street opportunities are temporary 20
Best Buy's arrival will shake-up the market 22
Providing that the market returns to growth, Best Buy seems set for success 22
Quality of service will be crucial 22
A conspicuos arrival to the UK would be highly beneficial 22
The model will depend on developing scale and presence to succeed 22
The retailer can learn much about the need for flexibility from Asda's experiences 22
Best Buy's first steps in the UK 23
Approximately eight store openings planned for 2010 23
Importing customer service approach 23
Initial trading for joint venture has been strong 23
Best Buy will try to bring a new approach to electricals retailing 24
Strong customer service 24
Using entertainment products to capture consumer imagination 25
Best Buy will place major emphasis on a multichannel approach 25
Some new ideas will be required 26
Space expansion strategy is flexible 27
Wireless World seems to be a preferred format 27
The growth of online will also affect store targets 28
Level of competition will also be an important determinant 28
Best Buy Europe has recruited some experienced UK retailers 29
An experienced marketing director will help generate interest in the brand 29
An ambitious chief executive will be determined to drive significant growth 29
Consequently some existing board members have been sidelined 29
Entertainment led product mix 29
Strong focus on own brand predicted 30
Best Buy will further increase competition in an already fierce market 30
The rise of the grocers is pressurising specialists 32
Boosted by the weak specialist channel and keen value positioning 32
Value players receive short-term boost 33
Retailers are differentiating through own brands 34
Developing own label is an intense process 34
However, if retailers can get it right, it is an attractive prospect 34
Own brands are also very relevant in environmentally friendly retailing 35
The 2010 World Cup will impact the market 36
New technology will receive a boost ... 36
... but not to the same extent as in 2006 36
Opportunities for cross-merchandising 37
CHAPTER 3 MARKET ANALYSIS 38
Market definition 38
Key drivers 40
Overview 42
Expenditure analysis by sub-sector 45
Brown goods: audio-visual equipment 47
Brown goods: games consoles & software 49
Brown goods: photographic & optical equipment 52
White goods: major household appliances 54
White goods: minor household appliances 56
Grey goods: information processing equipment 58
Grey goods: telephone & fax equipment 61
Electricals specialists 63
Channels of distribution 66
CHAPTER 4 COMPANY DATA ANALYSIS 68
Market Shares 68
Operating statistics 72
Space allocation 74
Advertising spend 77
CHAPTER 5 AMAZON 79
Innovation online sees gains continue 79
Recent key events 81
Dynamic player continuing to innovate 81
Group rolls out small range of own brand electronics 81
Prime service offers fast free delivery to loyal customers 81
Amazon innovates with Kindle 81
More third-party sellers on website, new brands search function 81
Takes advantage of weak pound 82
Digital downloads available for mp3s 82
Mobile offer 82
Fulfilment by Amazon 82
Proposition 83
Continues to grow offer, becoming online department store 83
Financials 84
Growth maturing but largely unaffected by recession 84
Sales growth impressive but gradually slowing 85
Sector performance - electricals 86
Growth moving from spectacular to solid 86
Market share gains continue as spend transfers online 87
Outlook 88
Bright future for a forward-looking company 88
Benefits from general migration of sales from high street 88
Moving away from entertainment roots 88
Kindle should boost electricals sales 88
White goods push remains a possibility 88
Amazon should be one of the biggest beneficiaries from M-commerce growth 89
Potential for electricals manufacturers to sell through Amazon third party 89
Fulfilment solutions will help the retailer gain more small businesses 89
Own-brand expansion to be expected 90
CHAPTER 6 APPLE 91
Gains in market share through brand strength 91
Recent key events 93
Specialist capitalises on brand success in entertainment 93
Launches plans to add to its retail stores across Europe 93
Continued innovation and strong branding drives footfall and sales in tough market 93
Thoroughly integrated with the online sphere 93
End to exclusivity deal will provide a huge fillip to growth 94
'Black Friday sale' comes to the UK 94
Proposition 95
An unclutterred display 95
Financials 97
Consistently high growth rates 97
Space 99
Few stores, in prime locations 99
Sector performance - electricals 100
Steady climb upwards 100
Market share steadily increasing 101
Outlook 102
Cause for optimism in a challenging market 102
Adeptly coping with the a harsh economic environment for electricals 102
Maintaining a high standard of customer service is key for Apple 102
Personalised service above and beyond normal retail environment 102
iTunes is in a great position for music downloads 102
CHAPTER 7 ARGOS 104
Argos must differentiate to stand out 104
Recent key events 105
Capitalises on multichannel credentials 105
Electricals is the top performing category 105
Growing product offer 105
Rising costs force up price points 105
Bush and Alba acquisition 105
Multichannel offer developed 106
Continual development of fulfilment 106
Looks to improve customer service and feedback channels 106
Major rebranding set for Spring/Summer 2010 107
Proposition 108
Multichannel model 108
Financials 109
Growth stutters in 2009 but Argos should remain focused 109
Space 114
Argos estate gradually expanding 114
Space allocation 116
Sector performance |
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Published By : Verdict Research Ltd |
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