| KN95033 |
| KEY NOTE HOME SHOPPING : October 2003 |
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This report covers: home shopping, general mail order, electronic home shopping, television, internet/online, direct marketing, off-the-page selling, direct mail shots, inserts, direct selling, party plan, person-to-person, multi-level, network selling, online sales, catalogue shopping, interactive television home shopping, E-shopping, fulfilment companies, delivery services, design and printing , call centres, postal services, television services,
Companies covered include: Arcadia, Argos, Boden.co.uk, N Brown Group, Burberry, Debenhams, Freemans, Grattan, GUS, John Lewis, Littlewoods, Marks and Spencer, Next Directory, Redcats, Wal-Mart Stores (UK) Ltd/ASDA, Big Food Group, J Sainsbury/Sainsbury's Supermarkets, Tesco, Waitrose, Amway, Avon Cosmetics, Betterware, Parepak Mail Order, Oriflame, Handbag.com, Ideal Shopping Direct, QVC, TV Travel Shop, Amazon.com/.co.uk, Book Club Associates, BOL.com, The Boots Company, Russ Andrew Accessories, Lakelaand, Netbanx,
EXECUTIVE SUMMARY
| The home shopping market in the UK was worth £22.34bn in 2002. In the past year it grew by 16.2 percent and this growth looks set to continue in the next few years. Growth has been particularly strong in the electronic home shopping market, which includes the Internet. |
| The home shopping market covers traditional catalogue retailers, which remains the strongest sector of the market, although its dominance is weakening due to the increase in electronic shopping. The market also comprises direct selling (door-to-door and party plan) and direct marketing (selling off-the-page through newspapers and inserts, as well as direct mail shots), which is rising as more companies begin to sell in this way and direct marketing techniques become even more sophisticated. |
| The total market has grown steadily due to consumer confidence across the board and an increase in the variety of shopping opportunities from home. The industry has opened itself up to a new generation of home shoppers, through the Internet, interactive digital television and directly marketed niche catalogues. The emergence of high-street retailers and supermarkets into the home shopping arena has bolstered the market and broadened its appeal. |
| Multi-channel selling is now a common phenomenon across the retail world, with high-street retailers running transactional websites and mail-order companies offering their catalogues and products over the Internet. Niche catalogues have attracted new customers and are now becoming more popular than the traditional `big book' agency catalogues. Growth has slowed in the direct selling market, with door-to-door sales, in particular, losing favour with consumers. Direct marketing companies are having to work even harder to see returns on their direct mail shots, as this sector becomes increasingly saturated. However, marketing techniques and database usage continue to be improved and this bodes well for the future of the sector. |
| Over the next 4 years it is estimated that the e-commerce market will overtake the mail-order sector as the dominant home shopping channel within the UK. The future of the overall market depends increasingly on the success of major high-street retailers and supermarkets, as their presence in the market continues to grow. Overall, the home shopping market looks set to grow steadily over the next few years, with e-commerce and niche catalogues in particular fuelling this growth. However, the market is likely to be an early casualty within the UK retail scene if an economic downturn occurs. |
TABLE OF CONTENTS
| Executive Summary 1 |
| 1. Market Definition 11 |
| REPORT COVERAGE 11 |
| MARKET SECTORS 11 |
| General Mail Order 11 |
| Electronic Home Shopping 12 |
| Television 12 |
| Internet/Online 12 |
| Direct Marketing 13 |
| Off-the-Page Selling 13 |
| Direct Mail Shots 13 |
| Inserts 13 |
| Direct Selling 14 |
| Party Plan 14 |
| Person-to-Person 14 |
| Multi-level or Network Selling 14 |
| MARKET TRENDS 15 |
| Online Sales Continue to Grow 15 |
| Catalogue Shopping Still the Most Popular Way to Shop from Home 15 |
| Interactive Television Changes the Face of Television Home Shopping 15 |
| High Street Market Leaders Exert Dominance in E-Shopping Market 16 |
| ECONOMIC TRENDS 16 |
| Population 16 |
| Table 1: UK Resident Population by Sex (000 and percent), Mid-Years 1998-2002 17 |
| Gross Domestic Product 17 |
| Table 2: Index of Growth in UK Gross Domestic Product at Current Prices (index 1995=100), 1997-2001 17 |
| Inflation 18 |
| Table 3: UK Rate of Inflation ( percent), 1998-2002 18 |
| Unemployment 18 |
| Table 4: Unemployment Rate and Actual Number of Unemployed Persons ( percent and 000), 1998-2002 18 |
| Household Disposable Income 19 |
| Table 5: Index of Household Disposable Income (index 1971=100), 1997-2000 19 |
| MARKET POSITION 19 |
| The UK 19 |
| Table 6: The UK Home Shopping Market as a percentage of Total Retail Sales (£m and percent), 1998-2002 20 |
| OVERSEAS 20 |
| 2. Market Size 21 |
| THE TOTAL MARKET 21 |
| Table 7: The Total UK Home Shopping Market by Sector by Value at Current Prices (£m at rsp), 1998-2002 21 |
| bY MARKET SECTOR 22 |
| General Mail Order 22 |
| Table 8: The General Mail-Order Market by Value at Current Prices (£m at rsp), 1998-2002 22 |
| E-Commerce 23 |
| Table 9: The E-Commerce Home Shopping Market by Value at Current Prices (£m at rsp), 1998-2002 23 |
| Direct Marketing 24 |
| Table 10: The Direct Marketing Market by Value at Current prices (£m at rsp), 1998-2002 24 |
| Direct Selling 24 |
| Table 11: The Direct Selling Market by Value at Current Prices (£m at rsp), 1998-2002 25 |
| OVERSEAS TRADE 25 |
| 3. Industry Background 26 |
| RECENT HISTORY 26 |
| INDUSTRY SYNOPSIS 27 |
| Table 12: Financial Results of Leading Companies in the Home Shopping Market (£000, percent and £), 2002 27 |
| NUMBER OF COMPANIES 27 |
| EMPLOYMENT 28 |
| REGIONAL VARIATIONS IN THE MARKETPLACE 29 |
| DISTRIBUTION 29 |
| HOW ROBUST IS THE MARKET? 30 |
| LEGISLATION 30 |
| KEY TRADE ASSOCIATIONS 30 |
| The Direct Marketing Association 30 |
| The Direct Selling Association 30 |
| The Interactive Media in Retail Group 31 |
| The Mail Order Traders Association 31 |
| 4. Competitor Analysis 32 |
| THE MARKETPLACE 32 |
| MARKET LEADERS 33 |
| Arcadia Group Ltd 33 |
| Company Structure 33 |
| Current and Future Developments 34 |
| Financial Results 34 |
| Argos Ltd 34 |
| Company Structure 34 |
| Current and Future Developments 34 |
| Financial Results 35 |
| Boden.co.uk 35 |
| Company Structure 35 |
| Current and Future Developments 35 |
| Financial Results 35 |
| N Brown Group PLC 36 |
| Company Structure 36 |
| Current and Future Developments 36 |
| Financial Results 36 |
| Burberry Ltd 36 |
| Company Structure 36 |
| Current and Future Developments 37 |
| Financial Results 37 |
| Debenhams PLC 37 |
| Company Structure 37 |
| Current and Future Developments 37 |
| Financial Results 37 |
| Grattan PLC 38 |
| Company Structure 38 |
| Current and Future Developments 38 |
| Financial Results 38 |
| GUS PLC (formerly The Great Universal Stores PLC) 38 |
| Company Structure 38 |
| Current and Future Developments 39 |
| Financial Results 39 |
| Freemans PLC 40 |
| Company Structure 40 |
| Current and Future Developments 40 |
| Financial Results 40 |
| John Lewis PLC 40 |
| Company Structure 40 |
| Current and Future Developments 40 |
| Financial Results 41 |
| Littlewoods Retail Ltd 41 |
| Company Structure 41 |
| Current and Future Developments 41 |
| Financial Results 42 |
| Marks and Spencer PLC 42 |
| Company Structure 42 |
| Current and Future Developments 42 |
| Financial Results 42 |
| Next Directory Ltd 42 |
| Company Structure 42 |
| Current and Future Developments 43 |
| Financial Results 43 |
| Redcats (Brands) Ltd 43 |
| Company Structure 43 |
| Current and Future Developments 43 |
| Financial Results 44 |
| Wal-Mart Stores (UK) Ltd/ASDA Group PLC 44 |
| Company Structure 44 |
| Current and Future Developments 44 |
| Financial Results 45 |
| SUPERMARKET HOME DELIVERY SERVICES 45 |
| Big Food Group PLC (formerly Iceland Group PLC) 45 |
| Company Structure 45 |
| Current and Future Developments 45 |
| Financial Results 45 |
| J Sainsbury PLC/Sainsbury's Supermarkets Ltd 45 |
| Company Structure 45 |
| Current and Future Developments 46 |
| Financial Results 46 |
| Tesco PLC 46 |
| Company Structure 46 |
| Current and Future Developments 47 |
| Financial Results 47 |
| Waitrose Ltd 47 |
| Company Structure 47 |
| Current and Future Developments 47 |
| Financial Results 48 |
| LEADING DIRECT MARKETING/DIRECT SELLING COMPANIES 48 |
| Amway (Europe) Ltd 48 |
| Company Structure 48 |
| Current and Future Developments 48 |
| Financial Results 48 |
| Avon Cosmetics Ltd 48 |
| Company Structure 48 |
| Current and Future Developments 48 |
| Financial Results 49 |
| Betterware PLC 49 |
| Company Structure 49 |
| Current and Future Developments 49 |
| Financial Results 49 |
| Farepak Mail Order Ltd 49 |
| Company Structure 49 |
| Current and Future Developments 50 |
| Financial Results 50 |
| Oriflame UK Ltd 50 |
| Company Structure 50 |
| Current and Future Developments 50 |
| Financial Results 50 |
| Television and Internet Home Shopping Companies 50 |
| Handbag.com 50 |
| Company Structure 50 |
| Current and Future Developments 51 |
| Financial Results 51 |
| Ideal Shopping Direct PLC 51 |
| Company Structure 51 |
| Current and Future Developments 51 |
| Financial Results 51 |
| QVC 51 |
| Company Structure 51 |
| Current and Future Developments 52 |
| Financial Results 52 |
| TV Travel Shop 52 |
| Company Structure 52 |
| Current and Future Developments 53 |
| Financial Results 53 |
| BOOKSELLERS 53 |
| Amazon.com/.co.uk 54 |
| Company Structure 54 |
| Current and Future Developments 54 |
| Financial Results 54 |
| Book Club Associates 55 |
| Company Structure 55 |
| Current and Future Developments 55 |
| Financial Results 55 |
| BOL.com 55 |
| Company Structure 55 |
| Current and Future Developments 56 |
| Financial Results 56 |
| Swotbooks.com 56 |
| Company Structure 56 |
| Current and Future Developments 56 |
| Financial Results 56 |
| BEAUTY PRODUCT RETAILERS 56 |
| The Boots Company PLC 57 |
| Company Structure 57 |
| Current and Future Developments 57 |
| Financial Results 57 |
| MUSIC SPECIALISTS 57 |
| Russ Andrew Accessories Ltd 57 |
| Company Structure 57 |
| Current and Future Developments 58 |
| Financial Results 58 |
| HOUSEHOLD specialists 58 |
| Lakeland Ltd 58 |
| Company Structure 58 |
| Financial Results 58 |
| SPECIALIST RETAILERS 59 |
| Netbanx Ltd 59 |
| Company Structure 59 |
| Current and Future Developments 59 |
| Financial Results 59 |
| OUTSIDE SUPPLIERS 59 |
| Fulfilment Companies 59 |
| Delivery Services 60 |
| Design and Printing 60 |
| Call Centres 61 |
| Postal Services 61 |
| Television Services 61 |
| marketing activity 62 |
| Direct Mail 62 |
| Television/Electronic Media 63 |
| Telemarketing 63 |
| 5. Strengths, Weaknesses, Opportunities and Threats 64 |
| GENERAL MAIL ORDER 64 |
| Strengths 64 |
| Weaknesses 64 |
| Opportunities 64 |
| Threats 64 |
| E-Commerce 65 |
| Strengths 65 |
| Weaknesses 65 |
| Opportunities 65 |
| Threats 65 |
| DIRECT SELLING 66 |
| Strengths 66 |
| Weaknesses 66 |
| Opportunities 66 |
| Threats 66 |
| DIRECT MARKETING 66 |
| Strengths 66 |
| Weaknesses 66 |
| Opportunities 67 |
| Threats 67 |
| 6. Buying Behaviour 68 |
| Consumer Penetration of GENERAL MAIL ORDER 68 |
| Mail-Order Catalogues 68 |
| Table 13: Consumer Penetration of Mail-Order Catalogues, by Sex, Age, Social Grade and Region ( percent), 2003 69 |
| Consumer penetration of DIRECT MARKETING 70 |
| Off-the-Page Advertising 70 |
| Table 14: Consumer Penetration of Off-the-Page Advertising by Sex, Age, Social Grade and Region ( percent), 2003 70 |
| Direct Mail Shots 71 |
| Table 15: Consumer Penetration of Direct Mail Shots by Sex, Age, Social Grade and Region ( percent), 2003 72 |
| Inserts from Magazines 73 |
| Table 16: Consumer Penetration of Buying from Inserts from Magazines by Sex, Age, Social Grade and Region ( percent), 2003 73 |
| CONSUMER PENETRATION OF DIRECT SELLING 74 |
| Door-to-Door Selling 74 |
| Table 17: Consumer Penetration of Buying Through Door-to-Door Selling by Sex, Age, Social Grade and Region ( percent), 2003 75 |
| Home-Based Sales 76 |
| Table 18: Consumer Penetration of Buying Through Home-Based Sales by Sex, Age, Social Grade and Region ( percent), 2003 76 |
| Party Plans 77 |
| Table 19: Consumer Penetration of Buying Through Party Plans by Sex, Age, Social Grade and Region ( percent), 2003 78 |
| consumEr penetration of e-commerce 79 |
| Interactive Television 79 |
| Table 20: Consumer Penetration of Buying Through Interactive Television by Sex, Age, Social Grade and Region ( percent), 2003 79 |
| Internet 80 |
| Table 21: Consumer Penetration of Buying Over the Internet by Sex, Age, Social Grade and Region ( percent), 2003 81 |
| CD-ROM 82 |
| Table 22: Consumer Penetration of Buying Through CD-ROM by Sex, Age, Social Grade and Region ( percent), 2003 82 |
| Radio 83 |
| Table 23: Consumer Penetration of Buying Over the Radio by Sex, Age, Social Grade and Region ( percent), 2003 84 |
| 7. Current Issues 85 |
| PRODUCT DIVERSIFICATION 85 |
| E-Commerce 85 |
| Catalogues 85 |
| Multi-Channel Selling 86 |
| Television Home Shopping Market Set for Shake-Up 86 |
| 8. The Global Market 88 |
| europe 88 |
| KOREA 88 |
| The US 89 |
| 9. Forecasts 91 |
| INTRODUCTION 91 |
| The Economy 91 |
| FORECASTS 2003-2007 91 |
| Table 24: The Forecast UK Home Shopping Market by Value at Current Prices (£m at rsp), 2003-2007 92 |
| by market sector 92 |
| General Mail Order 92 |
| Table 25: The Forecast UK General Mail-Order Market by Value at Current Prices (£m at rsp), 2003-2007 93 |
| E-Commerce 93 |
| Table 26: The Forecast UK E-Commerce Market by Value at Current Prices (£m at rsp), 2003-2007 94 |
| Direct Marketing 94 |
| Table 27: The Forecast UK Direct Marketing Market by Value at Current Prices (£m at rsp), 2003-2007 95 |
| Direct Selling 95 |
| Table 28: The Forecast UK Direct Selling Market by Value at Current Prices (£m at rsp), 2003-2007 95 |
| FUTURE TRENDS 96 |
| Growing Influence of Direct Marketing Techniques 96 |
| Grocery Delivery 96 |
| M-Commerce 96 |
| High Street Retailers' Dominance of the Home Shopping Market 97 |
| 10. Company Profiles 98 |
| Arcadia Group Ltd 99 |
| Avon Cosmetics Ltd 101 |
| N BROWN GROUP PLC 103 |
| Freemans Plc 105 |
| Grattan Plc 107 |
| Gus Plc 109 |
| Littlewoods Retail Ltd 111 |
| Redcats (brands) Ltd 113 |
| 11. Further Sources 115 |
| Associations 115 |
| Publications 115 |
| General Sources 116 |
| Bonnier Information Sources 116 |
| Government Publications 117 |
Text © 2004 Key Note
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Last updated by Amanda Porteous February 2004
