The UK Retail Market An overview of how Finnish retailers and technology brands should approach entering the UK market - Business Finland
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The UK Retail Market An overview of how Finnish retailers and technology brands should approach entering the UK market
This report covers
How to enter the UK market Technology in Retail
UK Market Summary: Delivery, Returns, Payment Key Findings
Types, Subscriptions
4 Step plan to enter the UK market
UK Fashion Market: Trends, Key Players,
Case Studies
Propositions
UK Homewares Market: Trends, Key Players,
Propositions
UK Marketplaces: Key Players, Deep Dive
Analysis
Summary
How to win on UK Marketplace
How to win on UK D2C
Technology in Retail
Executive Summary: Technology in Retail
Identifying your target Having a proof of concept There are no evident gaps in
audience and potential and easy integration the market, but there are
partners is key; finding a solution will make you a opportunities for tech brands
strong in-market agent more attractive partner who can effectively deliver
will help with this combined solutions
Identifying your target audience and potential partners Know your point of difference. Have a clear view of what you’re good at. And being able to communicate this clearly. Defining your target market and who want to sell to is key to knowing what you need to do. It’s not possible to target everyone. Being the cheapest is not the a defining factor; there is no need to “race to the bottom”. It’s more important to sell what makes you different and why your solution works. COVID has changed things but it is difficult to successfully enter a market without someone on the ground, or who has a deep understanding of the market. Post-COVID this might be virtual feet on the ground.
Develop a proof of concept and easy
integration solution
Partnering is critical to success. Ensure you have:
1. A pre-built integration cartridge to help become an approved / listed partner
e.g. Ometria – have pre built cartridges with Shopify and BigCommerce
2. Proof of concept and case studies to show that your tech works
End Users (retailer) – Platform – SIs – all need confidence in your platform
Payback is key: you need to be able to demonstrate a quick return on
investment
Consider offering a proof of concept to clients: integrate your solution cost-free
and run it for a period of time to prove it effectiveness and thus gain tractionOpportunities in the UK Market
There are no obvious gaps in the market for technology, but there are
opportunities for companies who can prove they offer a better solution
to existing problems:
1. CMS, CRM, Search & Merchandising
Nordic Technology has a Current solutions are able to do 2 out of 3 well, but there is an
good reputation in the UK opportunity for brands who can deliver a solution for all three
market. This is positive, but it areas
alone will not win business.
2. Personalising content and merchandising
Other Nordic companies that There is a potential opportunity for a tool that can both identify
have successfully entered the individuals and serve Content and Merch content well
UK market have been seen as
disruptive. 3. OMS
Increasingly important in the wake of COVID. Customers visiting
NOSTO has good name in the a physical store shop with intent. They want to know a particular
market product will be there and avoid risking disappointment. A good
OMS is critical to this.Technology companies are attracting
significant investment in the UK
Equity investment in the UK’s tech Equity Investment in UK Tech
businesses increased by 27% 2019 £3 000 000 000
to £4.0bn
£2 500 000 000
The tech sector remains highly £2 000 000 000
attractive to investors, accounting
£1 500 000 000
for 47% of total equity investment
in UK SMEs in 2019 £1 000 000 000
£500 000 000
£0
Software as a Service Software FinTech AI
www.smeweb.com/2020/06/26/investment-pours-into-uk-tech-companies/?cli_action=1607449527.319UK businesses are looking for easy-to-implement
cloud solutions that will support trade
Where UK businesses are investing at
the moment is in improving their
overall platform and reach through
different channels.
This includes CMS solutions, and
CRM/CDP software to help them target
customers once they have acquired
them.
Investing in high-functioning OMS
solutions is also a focus, to ensure
stock is better deployed to engage
stores and distribution centres etc
Increased automation is expected to
replace retail roles across more of the
core retail function over the next
decade.
Source: https://www.mckinsey.com/industries/retail/our-insights/rebooting-retail-how-technology-will-shape-the-future-of-retailSeveral tech trends that were on the rise may
be accelerated by the impact of COVID
Many of these technologies feel nascent and not yet proven to be effective, but could see faster uptake
and development in response to the new way of shopping that is coming about as a result of COVID-19:
Aisle sat-nav - Tech to guide customers around Mobile checkout- Allowing customers to scan
stores to products they have saved on their personal products on shelves and make in-app payment,
shopping list, making their visit more efficient avoiding the need to queue at a till
Experiential Technology – Allowing consumers AR and ER – Bring the in-store experience to the
to bring experiences in-home home, like the IKEA app
Facial recognition – App-based facial recognition
for age-restricted items that require ID (e.g. Smart Equipment – Smart shelving that can
Ubamarket App) detect stock levels
Order fulfilment automation – To increase Automated Warehouses – Using robots to
speed to fulfilment as online takes a larger share manage stock, rather than manual stock checks
AR = Augmented Reality
ER = Extended RealityQuick-start guide to entering the UK
3
Identify
Potential
1 2 Partnerships 4 5
Identify Core Find in- Start Roll Out to
Engagement
Sectors market expert
3 Activity
Market and
Market POC
Have Proof of
Concept
ReadyQuick-start guide to entering the UK
Identify core sectors – decide on the size and scale of your target technology partners, based on what suits
1 your business. e.g. Decide if you want your product to be on fast fashion sites / or to target Millennial shoppers
etc.
Find in-market expert - Find your “person on the ground” - someone how has lived experience in the UK and is
2 familiar with its nuances.
Identify potential partnerships and develop proof of concept – research key players in the market to see
3 which other platforms/SIs etc are doing well and would work with your product. Develop your proof of concept to
demonstrate the potential returns and how easy your technology would be to implement.
4 Start engagement activity – Talk to Tech Officers, nurturing tech partners, training people, and building
awareness.
5 Roll out to market and market Proof of Concept – Use your initial successes as case studies to market your
product and target other brands within your target customer groupCase Study: Clear Pay
Who are they? What they did do? Why this worked
An Australian Identified the right person to head up their market Boosted conversion rate
based deferred entry. A well-known, individual in the market with a good and customer
payment solution set of contacts. engagement for BooHoo
(similar to Klarna).
He helped them select the right SI partner, connected Provided ClearPay a
Large customer with the right target customers, and who could build a payment services
base in AUS; had “cartridge”. provider (and Astound,
built a large war the agency). Enabled
chest to tackle They approached BooHoo, their preferred target and them to build awareness
new markets. offered to pay for the integration of their payment within their target
solution onto the BooHoo platform, with no fees for 6 customer group
months. (it would be removed free of charge if it didn't
add value). ClearPay had a
clear point of difference
They advertised alongside BooHoo “pay with ClearPay” to go to market with
The PoC was successful and ClearPay now have a large One ‘push’ into the
portfolio of clients with a retailer page on their website market created a ‘pull’.
that is a major source of trafficCase Study: One Stock
Who are they? What they did do? Why this worked
French base cloud OMS, Through a contact, approached the Foschini Used as a case study
enabling a multichannel group (Whistles, Phase 8 and now, Hobbs demonstrating improved
business to have on view and Damsel in a Dress); they customer satisfaction and
of the stock throughout identified there was a problem with stock reduced season end mark down.
their business, stores as control. Also recognised the opportunity to
well as DC. improve customer experience by allowing Focused on extending into
customers to have visibility of stock instore similar brands - Ted Baker, Mint
Enabling better utilisation and make this available for reservation. Velvet etc.
of stock and pick from
store to be operated. The solution developed was turnkey and Used it to target other mid-
easy to implement. premium retail brands within
similar challenges.
One Stock funded the implementation with
phase 8 and Whistles. Now positioning themselves as
COVID-proofing solution, have
The trial was commercially successful. developed the proposition to the
wider market – Pets At Home
went live recently.Case Study: Nosto
Who are they? What they did do? Why this worked
Finnish based Founder was not well connected in UK, but had built Product was clearly
solution to enable businesses previously; had a very clear idea of the target focussed on a need
targeted content business and a product that they would need within smaller businesses
and specifically
merchandised Attended events aligned with target group, technology Original pricing model
product to be and business based. Signed first client at fashion had no fixed fee and no
displayed to the conference after showing demo on an iPad minimums
site visitor Developed 2 prong approach, engaging with potential Developed to product to
customers and SI partnerships to create a push/pull in the offer features of more
market expensive platforms
Original focus was
on SME’s but have Integration is light touch so no need for a cartridge to be Worked in tandem with
now moved up in developed partners to build
scale with several confidence in the product
Sales team still small – only 2 in UK; more focus on capabilities
hundred clients in customer service and marketing
UK aloneWhat these tech brands have in common
A clear focus on knowing what need they’re solving
1
Clear strategy for targeting their first customer and entering the
2 market
3 Offering a “proof of concept” period
4 The ability to exploit that proof of concept and create a demand to
develop it into a “pull” from other customersBrands and Retailers in the UK market
Executive Summary: Brands & Retailers
Ecommerce is advanced The most important Marketplaces are a viable
in the UK and cross- considerations for D2C alternative to D2C. Amazon is
border shopping is are clear returns, free the dominant player, but
becoming more regular shipping thresholds there are a number of niche
and Payment types smaller operators to explore.UK Market
Ecommerce now accounts for over a
quarter of UK Retail Revenue
E-commerce share of retail sales revenue in the Fashion and Homewares are two of the
United Kingdom (UK) from 2019 to 2024 largest sectors online in the UK
*These figures have been adjusted for expected impact of COVID
35% *These figures have been adjusted for expected impact of COVID
32,1%
29,8% £27 500 000 000
30% 28,1%
27,5% 26,9% £25 000 000 000
Share of total retail sales
25% £22 500 000 000
21,8%
£20 000 000 000
20%
£17 500 000 000
73%
15% £15 000 000 000
£12 500 000 000
10%
£10 000 000 000
5% £7 500 000 000
£5 000 000 000 88%
0% 27%
2019 2020 2021 2022 2023 2024 £2 500 000 000
£0 12%
Fashion Furniture & Homeware
The UK is the world’s third-largest e-commerce
Online Offline
market, with nearly £200 billion in sales in 2019.
https://www.sendcloud.co.uk/ecommerce-statistics/Summary of UK proposition
Delivery Payment Options
• Free delivery should be offered over a • Payment by credit/debit card must be
reasonable threshold (£50 for clothing available
or homewares, £100 for furniture) • PayPal is the most popular virtual wallet
• Average cost of paid for delivery for UK • Klarna is gaining traction for fashion purchases
retailers is £3.99 • Must use GBP not Euros
• Brits are impatient with only 32% are willing
to wait 2-3 working days for their deliveries Loyalty Schemes
• However, 55% would rather buy • Consider offering a loyalty scheme to
internationally and wait longer for delivery promote repeat purchase
than pay a delivery fee
• Delivery options (Click & Collect) are popular Returns
• Returns should be cheap and easy
Language • Maximum cost of returns: £3.50
• Sites must be translated into English • Include returns labels or instructions
for the UK market in the package
www.imrg.org/blog/what-do-customers-actually-want-when-it-comes-to-delivery/ , Royal mail – Delivery Matter 2020 Report ,
www.imrg.org/blog/delivery-revealed-results-of-the-first-uk-ecommerce-shipping-survey/, www.whistl.co.uk/news/british-consumers-want-their-deliveries-
faster-than-ever, www.alixpartners.com/media-center/press-releases/consumers-internationally-at-different-stages-along-home-delivery-maturity-modelEnsure you have a free delivery option and
realistic spend threshold for this
43% always expect a free delivery option of UK consumers say Free Delivery
almost ¾ of UK shoppers will add more to
their basket to reach a free delivery
45% increases their likelihood to shop with a
certain retailer
threshold.
26% will spend the required threshold
amount for free delivery
61% of UK consumers will abandon
their basket if delivery is too expensive
Standard delivery is the most used delivery
option for UK consumers, as this usually
comes free above a spend threshold of 18-34 year olds consider it important
59% of retailers offer next day delivery 62% for a retailer to offer environmentally
46% offer same day friendly delivery options
32% offer click and collect in store
Royal Mail – Delivery Matters UK 2020
/www.sendcloud.co.uk/ecommerce-statistics/Ensure your returns process is simple and
make it free if possible
Simple, easy and free returns are key for UK 59% of shoppers are unlikely to shop
consumers: with a particular retailer again after a
84% want to be able to choose whether to return an bad returns experience
item in-store or via post or pickup.
Include a returns label in the package, or include a
link to download this with the order and shipping Clothing has a high returns rate with
confirmation emails
61% of UK consumers having returned
61% of UK Consumers are generally satisfied with clothing purchases in the past year
returns, but the main causes for dissatisfaction are:
Delay in receiving Refund (25%)
Paid Returns (24%) Easy returns are key 50% of UK
78% of shoppers would buy more if there are free consumers expect the returns label in the
returns box and 72% want to track returns
Royal Mail – Delivery Matters UK 2020, www.businesswire.com/news/home/20190215005129/en/Online-Returns-in-the-UK-2018-2023---Insight-into-the-Consumer-and-
Market-Dynamics-of-the-Online-Returns-Channel---ResearchAndMarkets.com, www.retailgazette.co.uk/blog/2019/03/78-brits-will-shop-retailers-offer-free-returns/Variety of returns methods are important to
customers 90%
Returns methods offered by UK Retailers
79%
• 60% of shoppers prefer to drop 80%
off returns at a local store and 70%
this is offered by 79% of UK
retailers 60%
55%
49%
• Consider partnering with a 50%
“drop-off” service, like Collect+
40%
or Doddle in the UK 35%
30%
• 45% will still use postal returns 22%
despite growing alternative 20%
16%
options 11%
10%
0%
Return in Store Return to Returns Label Arrange Collection No label available Downloadable Request from
Parcelshop or Enclosed returns label retailer
lockerOffer customers choice of payment options
with PayPal core to the online UK consumer
experience Which online payment services have you used in the past
12 months?
Credit and Debit card are most widely used
payment type for UK consumers PayPal 95%
Visa Checkout 39%
PayPal is also a significant part of the UK online Apple Pay 18%
consumer payment journey used by 95% of Amazon Pay 15%
consumers Google Pay 15%
Masterpass 3%
Apple, Amazon and Google pay are all increasing
share of spend in the market with over 15% of Other 2%
consumers using these methods Skrill 2%
Stripe 2%
Klarna has increased its share of online payments 2Checkout 1%
doubling its usage to over 7 million UK customers Neteller
and is live on over 5000 UK merchants. 10% of 1%
millennials think ‘pay later’ models are the best Trustly 1%
way to make shopping more convenient 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
www.statista.com/forecasts/997867/online-payments-by-brand-in-the-uk
inviqa.com/blog/ecommerce-returns-problem-and-how-tackle-it
www.fintechmagazine.com/venture-capital/klarna-uk-hits-major-milestone-seven-million-customersGive customers subscription and loyalty
options for your brand
Loyalty programmes have a very positive impact on
UK customer behaviour. 76% of Brits are members of at least
47% are more loyal as a result of membership one loyalty programme
39% will recommend a brand more
43% will spend more
33% feel more emotionally connected 73% think loyalty programmes are a
83% of UK consumers want rewards to save them
great way for brands and businesses to
money followed by 53% who want rewards to be a reward customers
treat
Loyalty programmes can open up opportunities with
partners as 58% of UK Loyalty Programme members Over half of UK consumers think that all
want rewards from partner brands 52% brands should offer a reward or loyalty
Build returns benefits into loyalty schemes with 86% programme
saying the option of free returns increase loyalty
between consumer and retailer
www.mando-connect.co.uk/what-brits-want-from-loyalty
https://www.retailgazette.co.uk/blog/2019/03/78-brits-will-shop-retailers-offer-free-returns/UK Fashion Market
Fashion online has grown significantly in the
UK and is forecast to continue this growth
eCommerce Fashion Revenue UK 2017-2025 Fashion % Share of Online
£35 2010 - 2020
This forecast has been adjusted for COVID
Billions
£31,0
£30,3
£29,6
£30 £28,6
£27,1
£25,3
£25
20% 29%
9%
£21,6
£19,7 2010
£20 £18,6
2015
£15
£10
2020
£5
£0
2017 2018 2019 2020 2021 2022 2023 2024 2025
Online Offline
Statista – Digital Market Outlook - Fashion
www.statista.com/statistics/829567/clothing-market-online-and-offline-sales-share-united-kingdom-uk/Fast fashion not high fashion are driving
online demand in the UK
Online Revenue of Selected UK Fashion Retailers Online 2019
$3 500 000 000
• UK consumers are increasingly
$3 000 000 000
drawn towards newer fast fashion
websites such as ASOS, BooHoo
$2 500 000 000 and Missguided that are driving
growth in the online market
$2 000 000 000
• Established brands such as Next,
$1 500 000 000
Debenhams and John Lewis still
$1 000 000 000
capture demand but are competing
to keep up with the new entrants
$500 000 000 into the market
$0
Zara ASOS Next Boohoo Amazon Pretty Little Missguided
Thing
Source: EcommerceDBDelivery subscriptions are a key element for the biggest online fashion brands ASOS, Misguided, Boohoo all offer premier next day delivery for ~£10 for a year’s subscription The number of ASOS premier customers, increased by 53% to 1.3 million in 2018 Next also offer delivery subscription for unlimited home deliveries for the year for £20 Amazon Prime in UK has over 15million subscribers as Amazon increases its fashion range on the platform
Klarna and delayed payments have become
increasingly popular for UK Fashion retailers
UK Small e-Fashion Retailers Tech Priorities
60%
50%
of UK independent fashion retailers
49% were planning to invest in flexible 40%
payment options in 2019
30%
were planning on introducing pay
32% later payment schemes within a 20%
year
10%
0%
Priortise Flexible Payments Plan to invest in Marketing Plan to invest in logistics Plan to invest in customer
and ecommerce Tech experience
Klarna – What’s in store for Britain’s independent e-fashion retailers 2019Adapting your proposition for the UK
Fashion market
Easy, quick Flexible Gift High end Sales
and free Payments packaging fashion Channel
fulfilment
• Free delivery • Card and PayPal • Use packaging as a • Target high end • Choose whether
above a threshold are essential differentiator fashion as a gap in D2C, marketplaces
• Offer next day requirements • Gift packaging can the market or a combination of
delivery options • Additional mobile enhance the both work best for
• Free and Easy payments are customer your brand
Returns more additional experience
important incentiveCase Study: NIKBEN WHO ARE THEY? NIKBEN are a Swedish premium men’s clothing and lifestyle brand, who sell internationally from Sweden. They offer a range of clothing with a focus on swimwear and are known for their lively and fun prints. HOW ARE THEY OPTIMISED FOR A UK PROPOSITION? NIKBEN’s website is fully translated and shoppable in SEK, Euros, GBP and USD. Delivery is free for orders of more than 1 item and whilst returns are not free internationally, exchanges are. Most orders are sent on the same day and they have partnered with UPS to enable delivery to the UK within 2 business days
WHY ARE THEY SUCCESSFUL? When they launched, NIKBEN filled a gap in the market for ‘fun’ swimwear with their product. They realised how competitive getting presence in physical retail is in the UK and so focused on online, growing awareness though active campaigns on social media. NIKBEN’s target demographic is 20-40 affluent males who travel, so they invested in retargeting and geo-targeted major cities like London and Manchester. They partnered with key players and influencers in the UK who helped us build awareness but also add credibility to the brand. NIKBEN use the UK and London to reach the rest of the world. The London market is very international and allows them to spread to other countries. Nordic countries are looked to positively for fashion and design and NIKBEN play on their Swedish heritage. Telling the brand story has helped open doors.
UK Homewares Market
Homewares is not growing at the same rate as
fashion, but still drives significant value
Ecommerce revenue for Homeware & Furniture
£12 Online Share of Home wares 2018-2022
Billions
£10,1
£9,9 13%
£10 £9,7
£9,3
£8,8 12%
2022
£8,1 10%
£8 2020
£7,0 2018
£6,5
£6,2
£6
£4
£2
£0
Online Offline
2017 2018 2019 2020 2021 2022 2023 2024 2025Homewares has particularly benefited
from the COVID pandemic
UK consumers seem to have high comfort ordering large,
bulky, perishable, valuable, and “complex” items for home Candle sales at Diptyque grew
delivery, and this has certainly been the case during
COVID. 536% 536% in the weeks after lockdown
started
There has been a mini-boom in property sales since the
market reopened in May. UK homeowners are placing more
emphasis on a comfortable home environment, with now
higher demand for more space and a more thoughtfully-
curated space.
Online-only retailers Wayfair and
Made.com have flourished and DFS’s
Although UK consumers are more comfortable with longer online sales grew 77% in the first half
delivery times for home and furniture products, it’s possible of 2020
that there be less tolerance for this as consumers have
been keen to reinvigorate their homes during COVID and
online shops like Wayfair and Made.com have been
challenging long lead times.
www.mando-connect.co.uk/what-brits-want-from-loyalty
https://www.retailgazette.co.uk/blog/2019/03/78-brits-will-shop-retailers-offer-free-returns/Marketplaces present a particular
opportunity for Homeware brands
Online Revenue of Selected UK Homewares Retailers Online 2019
$3 500 000 000
• Homewares searches have grown 75% Q22019
$3 000 000 000 to Q220202 driven primarily by lockdown an
the COVID pandemic
$2 500 000 000
• Marketplaces are key websites for UK
$2 000 000 000
Homewares with Amazon and Wayfair the most
popular
$1 500 000 000
• There is also demand for information and
guides with YouTube and Wikipedia in the top
$1 000 000 000
20 websites driving Homewares share of voice
$500 000 000
• Houzz has seen strong growth beginning as an
online community about architecture and
$0
Zara ASOS Next Boohoo Amazon Pretty Little Made.com Missguided interior design, developing into an online
Thing marketplace and dropship retailer
Source: EcommerceDBAdapting your proposition for the UK
Homewares market
Flexible Growing Nordic Sales
Fulfilment Payments Trends Fashion Channel
• Card and PayPal • Interest for • The UK market is • Choose whether
• Customers are more
are essential homewares online fashion-led, but D2C, marketplaces,
relaxed about delivery for
requirements has grown through Nordic style has or a combination of
homewares
• Split/delayed COVID been on trend for both work best for
• 20.4% of UK consumers
payments can be • Target key terms several years and your brand
do not mind a longer
delivery timescale for additional and products in the is not waning
homeware and furniture incentive market
https://assets.kpmg/content/dam/kpmg/uk/pdf/2018/01/kpmg-annual-retail-survey-2018.pdfUK Marketplaces
If going D2C is not feasible, marketplaces may
present a viable alternative for entering the UK
355.9m 256.8m
16.5m 20.0m 23.4m
1.6m
28.6m 4.3m
Monthly UK visits. Source: SimilarwebTRAFFIC SHARE
(AUG 19)
EU marketplace
TRAFFIC SHARE
(AUG 19) 71%
56% 18%
dominance 32% 7.9%
6.8%
TRAFFIC SHARE
Marketplaces in Europe (AUG 19)
are dominated by both TRAFFIC SHARE
40%
20%
LARGER AMERICAN (AUG 19)
13%
players, such as 51%
47%
AMAZON and EBAY. 2.2%
There are also a number TRAFFIC SHARE
(AUG 19)
of niche local language 48%
marketplaces and 17%
category specific players 12%
such as BOL, ZALANDO
and ALLEGRO.
TRAFFIC SHARE
(AUG 19)
71%
TRAFFIC SHARE
14%
(AUG 19)
13%
69%
25%
*based on traffic share of SimilarWeb category = shopping *Pre COVID-19
4.3%Leading marketplaces in the UK
Amazon is dominant in the UK and local marketplaces are not breaking through as they
are in the rest of Europe.
Leading marketplaces in the UK
Traffic Share in
UK for
Transactional
Websites
(Feb 2020)
amazon.co.uk ebay.co.uk amazon.com
ebay.com etsy.com asos.com 0,00% 10,00% 20,00% 30,00% 40,00% 50,00% 60,00%
Traffic Share (August 2019)
Source: SimilarWeb
*Pre COVID-19UK online marketplace share of spend of marketplace
sales
60,00%
• The Amazon and *Pre COVID-19
eBay marketplaces 50,00%
dominate in the
UK due to high 40,00%
awareness and a
30,00%
wide range of
product choice. 20,00%
• There are, 10,00%
however, still
opportunities for 0,00%
brands on smaller,
niche
marketplaces
https://store.globaldata.com/report/vr0140ch--retail-channel-series-uk-online-marketplace-retailing-2019-2024/How to approach marketplaces and decide
on which one suits you
Brand Fit Product Fit Approaching
Most marketplaces operate You may need to curate to Marketplaces
within a specific product mee the demands of the Marketplaces operate
category marketplace, especially if it’s individually. Some may
a smaller or niche player approach you and have
Some marketplaces are
broad and take a variety of Some marketplaces may teams to find suitable
brands, e.g. Wayfair. want to co-locate brands, but brands.
others will want to avoid Others (usually smaller) will
Others are more niche and
competition. wait for you to make inbound
have a specific customer and
appeal (e.g. Joules, Nordic Marketplaces like Not On The enquiry, or if they are
Nest) High Street look for discerning, will seek out
personalised and unique brands at trade fairs.
iterations of productsThe operational elements you’ll need to be
able to deliver
Account Management
Fulfilment & Returns Content
Marketplaces can be labour and time
3PL* fulfilment to customer or Amazon Localised content relevant to UK intensive to get products uploaded.
warehouse customers
Smaller marketplaces may not have APIs,
For Amazon – would need base in UK Multiple optimised images of the meaning manual uploads, but even larger
products and lifestyle imagery, marketplaces like Amazon have incredibly
For smaller marketplaces – can probably especially for curated marketplaces
ship from Finland and set delivery demanding criteria to meet.
likes Not On the High Street
timeframe; most marketplaces operate on You’ll will need to assign someone to
a dropship basis In depth descriptions and bullet manage your marketplace presence, liaise
points, especially for homewares with the marketplace team over promotions,
UK returns base required so customers do
not need to ship internationally May need to re-shoot content to meet and pricing and ensure that this all aligns
marketplace brand guidelines or with your own internal marketing and brand
Use Amazon fulfilment and returns provide product for in-house guidelines.
methods to ensure free returns for photography (e.g. ASOS)
customers Customer Services
Content should not be recycled to
Might need to re-pack product or be avoid it competing with your own You will need to field customer service
prepared to ship in specific quantities. If website, or where it features on queries directly and integrate with the
dropship, Marketplaces may have multiple marketplaces marketplace’s own. This often requires
guidelines around the packaging. shorter SLAs* to ensure they can get back
to customers quickly.
3PL = Third Party Logistics
SLA = Service Level Agreement (i.e. the maximum time allowed to resolve a problem)Pros and cons of marketplaces vs D2C
Pros Cons
Direct relationship with customers enabling better All logistics and fulfilment costs need to be handled
understanding of customer needs by the brand
Control of end to end customer experience
Need localised UK customer service
Need UK base for quick and free delivery
Investment in marketing to raise awareness and
drive traffic
High consumer traffic, with purchase intent For many marketplaces you will still need to
manage shipping and logistics
Some marketplaces have fulfilment options
Still need some marketing investment to drive sales
Remove customer service as you have to do this for
3P Lack of control over listings (on some marketplaces)
Less insight into customer as data from the
No need to pay for high setup costs of a D2C site marketplace is limited
Need to pay commissionHow to win in the UK Market
Entering the UK Market 1 Understand the demand 2 Identify your route to market: i.e. D2C or marketplace 3 Find relevant partners to help you deliver this: e.g. find a 3PL to partner with 4 Make necessary operational changes: e.g. translate your site, update FAQs, add payment methods 5 Go live and start selling!
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