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Executive Summary

Table of Contents

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EXECUTIVE SUMMARY

Home shopping has become one of the most talked about sectors of the UK economy in recent months. The continuing rush of retailers onto the Internet; the 1998 launch of digital television (TV) in the UK; the performance of overseas electronic retailers, such as Amazon; and the resurgence of the catalogue companies, following years of reorganisation, have combined to earn the home shopping industry thousands of column inches in the UK press. It has also encouraged foreign operations to target the UK and previously reticent British retailers to explore the world of home shopping.
Between 1994 and 1998, the UK home shopping market grew by 56.9 percent to £10.2bn. However, data relating to the electronic commerce (e-commerce) sector have only been included since 1996. Consequently, this increase is slightly exaggerated. Comparing like with like, home shopping sales grew by 46.2 percent between 1994 and 1998. In 1998, total market value rose by 18.6 percent.
Initial fears regarding purchasing over the Internet have started to recede as more and more people have found it a safe method of transaction. Additionally, with the growth of web retailers such as Amazon.com, what was once a location for niche services has become a marketplace for mainstream goods, such as best-selling compact discs (CDs) and books, alongside clothing and appliances.
The large catalogue companies, such as Great Universal Stores (GUS), Empire Stores and Grattan, remain major forces in UK retailing, while long-established players, such as Avon Cosmetics and Amway, are still significant in the direct marketing sector. However, it is the rash of new players allowed into the market through new technologies that is changing the landscape of home shopping in the UK. These include Dixons, the supermarket chains, Arcadia Group and QVC. Additionally, new technology has encouraged non-traditional retailers, such as Microsoft, Virgin, Granada and BSkyB, to enter the market.
The electronic market is expected to be boosted by the continued arrival of the big names, such as WH Smith, Dixons, Boots and Woolworths, which inspire confidence in secure transactions. Moreover, the low prices on many items found on the web, for example, hardback books, is encouraging sales. Digital TV is expected to lead to an explosion in direct response television (DRTV) sales over the next few years.
Key Note forecasts that by 2003, the market for home shopping will be worth £20.3bn and account for over 6 percent of total retail sales. This represents growth of 73.5 percent over 1999, with all sectors expected to show growth. More traditional retail brands will continue to enter the home shopping market and there will be a greater cross-fertilisation between sectors, as catalogue shoppers explore TV, the Internet, direct selling, etc. options.

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TABLE OF CONTENTS

Executive Summary

Market Definition

INTRODUCTION

MARKET POSITION

MARKET SECTORS

MARKET TRENDS

Table 1: Retail Value of Home Shopping as a percentage of Total Retail Sales (£bn and percent), 1994-1998

Table 2: The UK Home Shopping Market by Sector (£bn and percent), 1998

Market Size

THE TOTAL MARKET

MARKET SECTORS

GLOBAL PERSPECTIVE

Table 3: The UK Home Shopping Market at Current Prices (£bn and index 1994=100), 1994-1998

Table 4: Sales Through General Mail Order Houses (£bn) 1994-1998

Table 5: Sales Through Direct Marketing (£m), 1994-1998

Table 6: Sales Through Direct Selling (£m), 1994-1998

Table 7: Sales Through Electronic MeansÅ (£m), 1996-1998

Industry Background

HISTORICAL BACKGROUND

INDUSTRY CONCENTRATION

TRADE ASSOCIATIONS

Competitor Analysis

THE MARKETPLACE

GENERAL MAIL ORDER COMPANIES

DIRECT SELLING/DIRECT MARKETING COMPANIES

MARKET SECTORS

ELECTRONIC RETAILERS

SUPERMARKETS

ADVERTISING AND PROMOTION

Table 8: Market Shares of the General Mail Order Catalogue Companies by Value ( percent), 1998

Table 9: Selected Leading Home Shopping Companies by Turnover (£m), 1997/1998

Table 10: Main Media Advertising Expenditure on Mail Order by Sector (£000), Year Ending December 1997 and 1998

Table 11: Main Media Advertising Expenditure by Mail Order Agencies (£000), Year Ending December 1997 and 1998

Table 12: Main Media Advertising Expenditure on Mail Order Catalogues (£000), Year Ending December 1997 and 1998

Strengths, Weaknesses, Opportunities and Threats (SWOT)

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

Buying Behaviour

CONSUMER PENETRATION

Table 13: Profile of Mail Order Users by Sex, Age, Social Grade and Region ( percent of adults), 1998

Table 14: Usage of Mail Order Catalogues in the Last 12 Months ( percent of adults), 1997 and 1998

Table 15: Penetration of Magazine Mail Order Purchasers ( percent of adults), 1997 and 1998

Table 16: Consumer Response to Offers and Appeals Made on Television or in Newspapers ( percent of adults), 1997 and 1998

Table 17: Consumer Response to Offers or Appeals Made on Television or in Newspapers ( percent of adults), 1998

Table 18: Method of Response to Offers or Appeals Made on Television or in Newspapers ( percent of adults), 1998

Table 19: Penetration of CDs, Records, Prerecorded Tapes and Videos Purchased by Post ( percent of adults), 1998

Outside Suppliers to the Industry

FULFILMENT HOUSES

DELIVERY COMPANIES

PRINTERS

CALL CENTRES

MAILING SERVICES

MEDIA CONGLOMERATES

Current Issues

GROWTH OF ON-LINE SHOPPING

HOME SHOPPING AND SEARCH ENGINES

TARGETING THE SOUTH EAST

NEW ENTRANTS

THE ROLE OF NATIONAL NEWSPAPERS

REDWOOD PUBLISHING

MOBILE TELEPHONES

ON-LINE MUSIC PURCHASING

Forecasts

FUTURE TRENDS

FORECASTS 1999 TO 2003

SECTOR FORECASTS

Table 20: Forecasts for the UK Home Shopping Market (£bn), 1999-2003

Table 21: Forecast Sales Through General Mail Order Houses (£bn), 1999-2003

Table 22: Forecast Sales Through Direct Marketing (£m), 1999-2003

Table 23: Forecast Sales Through Direct Selling (£m), 1999-2003

Table 24: Forecast Sales Through Electronic MeansÅ (£m), 1999-2003

Company Profiles

INTRODUCTION

DEFINITIONS

FURTHER INFORMATION

Further Sources

ASSOCIATIONS

PERIODICALS

DIRECTORIES

GENERAL SOURCES

HBI UK INFORMATION SOURCES

GOVERNMENT PUBLICATIONS

OTHER SOURCES

Text © 1999 Key Note

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