IMRG Capgemini e-Retail Breakfast Roundtable

17th January 2013

Agenda

8:30am: Introduction and overview

Christmas online

2012 review

Predictions for 2013

9:00am: Discussion

9:45am: Informal networking

10:30am : Close

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Overview Capgemini helps leading retailers worldwide to develop and deliver their multi-channel ambitions IMRG is the UK’s industry association for e-retail. It sets and maintains pragmatic and robust e-retail standards to enable fast-track industry growth

Over 12 years of online monitoring • Tracking e-retail and m-retail sales

from over 100 retailers • High street/multichannel versus

catalogue/online • A range of KPIs, including conversion

rates and basket size and industry sectors

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Christmas 2012 Online

December Summary

17.5% YoY

£9.4 bn

Christmas brought strong performances for many: • John Lewis and Debenhams both enjoyed strong

Christmas sales • Impact of online is now really being felt on the High

Street in certain categories – just ask Comet and HMV

Overall, a positive result for online retail: • 12% up on November • m-Retail grew by 207% • Click and collect has continued to grow in popularity • e-Retail conversation rate fell by 0.3% to 4.6%

demonstrating increased browsing online • m-Retail conversion rate reached its highest ever

value of 2.3% in December

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Sector Splits – December 2012

% Change Nov 12 – Dec 12

% Change Dec 11 – Dec 12

Beers, Wines and Spirits 50% 19%

Clothing, Footwear and Accessories 9% 18%

- Accessories 28% 37%

- Footwear 11% 9%

- Lingerie 31% 39%

Electricals 18% 31%

Gifts 38% 40%

Health and Beauty 32% 13%

Travel -9% 8%

Strong year-on-year growth across majority of sectors: • Solid performance from BWS, with 19% growth • Electricals saw a resurgence with consumers showing that they are happy

to buy electrical goods online • Clothing showed steady growth, despite a disappointing 2012 overall • Lingerie and Gifts had the best performance, growing 39% and 40%

respectively

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2012 Review

2012 Summary • Strong double digit annual growth of 14% - this is in-line with our forecast

• e-Retail now accounts for 15-20% of total retail market (excluding travel)

• First half of the year grew by 13%, with second half growing by 16%

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2012 m-Retail • In 2012, m-retail sales grew by an average of 304% over 2011 (270%

excluding travel)

• The average percentage of online sales via mobile devices grew from 0.4% in Q1 2010 to an average of 13.2% in Q3 2012

• The percentage of online visits via mobile devices has also risen, from 1.4% in Q1 2010 to 23.6% in Q3 2012

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2012 Conversion Rates

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• e-Retail conversion rate usually increases by around 1% between Nov and Dec, but in 2012 it fell by 0.3%. However, during this period visitor numbers increased on average by 13%

• The m-retail conversion rate hit 2.3% in Dec, the highest since we have been tracking it

2012 Click & Collect Click & collect has continued to grow in popularity as a delivery choice for consumers, following a notable leap between in 2011.

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Average percentage of click and collect sales (completed online)

N.B. These figures include only those multichannel retailers with a physical

stores and, therefore is not representative of the overall online retail market.

2012 Multichannel vs Pure-play Sales growth for pure-play retailers exceeded that of multichannel retailers:

• Pure-plays up 17% in 2012, compared to 13% for multichannel retailers

• In 2010 and much of 2011, multichannel retailers recorded stronger growth

• We usually see convergence around Christmas

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Discussion: Predictions for 2013

Predictions for 2013

• Trends that will continue:

– Retailing to the fore; the best propositions win

– m-Retail growth will continue supported by sales of tablets and smartphones

– Digitisation of the consumer – always-on smartphones identify and connect the consumer to the online world. Is this an opportunity or threat?

– Delivery revolution – customer choice will proliferate but will satisfaction improve?

DISCUSSION

12% YoY

£87bn

Thank you