The secrets of success: what can we learn from the top 5 retailers of 2023?
May 4, 2023
As the world of ecommerce continues to grow, so does the competition. With so many retailers vying for customers’ attention, how can merchants stand out from the crowd?
By learning from the best.
According to the RXUK Top 500 2023 report by Internet Retailing, the top five retailers of the year are Amazon, Tesco, JD Sports and Next, earning themselves the coveted ‘elite’ status. Each has achieved success in its own way, and in this blog post, we’ll be taking a closer look at the secrets of their success and the lessons we can learn from them.
1. The way we shop is changing
It’s been a challenging few years for retailers, with a global pandemic, Brexit and the war in Ukraine causing issues all the way from the supply chain to the workforce. The cost of living has increased and is being felt by the majority of UK households, and so many have had to become more frugal with their spending.
It’s not all doom and gloom, however, with energy prices and inflation expected to ease this year. While we may well see more of an appetite for shopping in the coming months, it may take a little time for consumers to feel comfortable parting with their money. It’s more important than ever that retailers serve shoppers in the way that they want to buy, whether it be online, in-store, via mobile or a combination of all three.
At the height of the pandemic, we naturally saw a huge surge in mobile and online sales, and many retail experts predicted that this way of shopping was here to stay. However, as of December 2022, the number of British sales taking place online had dropped to 25% – the lowest level since March 2020 as shoppers made a return to stores.
So is ecommerce dead? Far from it. It’s more likely that customers will want to use a combination of sales channels to complete a transaction. Retailers who operate both ecommerce and brick-and-mortar stores should ensure that an omnichannel approach is at the heart of the business. JD Sports ranked third in the RetailX Top 500, and the sports apparel giant is showing us how it’s done.
Opening between 250 and 350 brand stores a year worldwide, JD Sports claims that physical locations are key for brand awareness. The current sales split as of February 2023 is 30% online and 70% in-store, but offering a range of digital services like click-and-collect and mobile payments keeping in-store queries down and average order value up. For JD, many customers want to carry out research online, then make the purchase in-store, and this may be the case for many retailers selling products at high price points.
2. Convenient delivery & collection options are key
Convenient delivery options can help retailers reach and engage more shoppers. We’re all familiar with Amazon’s Prime delivery model, which offers same and next-day delivery on many of their products for an annual fee, as it’s become the pinnacle of convenient shopping and fast shipping. But Amazon has also demonstrated that physical collection points can work well for ecommerce stores, too. Operating 5000 branded collection lockers in the UK, customers can choose how they want to receive their items, which will appeal to those who are not at home during the day, or simply don’t want to pay for the Prime delivery service but want to get their hands on their purchases fast. Plus, they increase brand awareness and can double up as out-of-home advertising, too.
If your business does operate physical stores, offering in-store collection for online orders boosts convenience for multi-channel shoppers, as well as the likelihood that they may make an additional purchase while in-store. JD Sports, Next and Tesco all offer seamless click-buy online, collect in-store options.
3. Diversify your product offering
Product diversification gives greater choice to your customers and can fuel business growth. Next is fast becoming a retail platform, selling third-party brands alongside its own while offering white label ecommerce and multichannel services to a growing group of third-party brands.
Amazon is also a great example of this. While Amazon always been a marketplace, it started out just selling other brands but has since gone on to develop and sell its own products, and with great success. The Alexa has become a staple in many households, and the Kindle has changed the way many of us consume books.
4. Sustainability is still important
Sustainability has been a big focus among retailers and consumers alike over recent years, and it will remain a major selling point in 2023. It’s important that brands are in touch with their customers’ values.
While Amazon often comes under fire for contributing to mass consumption, it’s currently leading the way in renewable energy, setting a new corporate record in January 2023 for its purchases of clean energy, and investing billions of dollars in its fleet of branded electric vans worldwide. While many retailers may not have the budget for this kind of delivery method, they should all be considering ways to reduce their business’s carbon footprint and show customers that they are making positive changes. Simply switching to recyclable product packaging is no longer going to cut it.
5. Invest in your website
If there’s something that the top five retailers have in common, it’s a user-friendly website. They use a range of tools to achieve this, from filters that help website visitors find the most relevant products to product reviews and star ratings, making the shopping process quicker, easier, and more likely to end in a sale. Next, JD Sports and Tesco all utilise product filters and a mega menu, meaning website users can find what they’re looking for in seconds, and search by product type, size and brand (especially important if you’re selling third-party brands).
The checkout process also needs to be quick and seamless, and retailers should aim for the least number of steps possible. Amazon’s one-click purchase feature is a perfect example of an almost instant checkout process. Mobile payment gateways like Apple Pay are also key to speeding up the checkout process and ensuring your customers can complete a purchase in the way that suits them.
These things may seem obvious, but they can make or break your ecommerce business.
Looking to invest in digital sales channels? Whether you’re struggling with an ecommerce website that just can’t keep up anymore, or need a hand in developing an omnichannel ecommerce strategy, we can help.