Methodology 2018

Learn how Retail Week measured retailers’ digital capability

Retail Week has reviewed digital competence among the leading UK retailers through a strategic audit for retailers to benchmark themselves and gain actionable insight.

What did the rank incorporate?

Retail Week Indicator measures the digital capability of 180 leading retailers in the UK across nine sectors. While the methodology is focused on customer-facing digital capabilities, financial performance was also assessed.

The list of retailers was derived from Retail Week Prospect’s coverage, including pureplay retailers, multichannel retailers, and those without a transactional website.

Retail Week defines a retailer as an organisation that actively sells a product directly to a customer through an intended destination – whether this is a store or a website.

Retailers were ranked on over 150 data points determining their digital strengths and weaknesses.

In total, over 30,000 data points were analysed.

The data was collected through a combination of desk-based research and store visits in April 2018.

To ensure the data was collected comparatively, Google Chrome was used for all desk-based research and an iPhone was used for all device-based and application-based research. Android was used for application-based research only where retailers have launched Android applications.

Methodology

Retail Week determined a set of customer-facing criteria required for digital competence. This was established in collaboration with an advisory board of retailers across different sectors.

The criteria were divided into four performance categories - Marketing, Logistics and Customer Service, Cross-channel and Ecommerce. A score was assigned to each of the criteria.

We believe the four categories represent the total customer digital experience across all areas of a customer’s shopping journey. Including financial performance as well as this provides insight into whether a retailer’s investment has shown through in trading.

All retailers were scored against each performance category, as well as their financial performance. These were aggregated to create an overall score per retailer. Categories were weighted in line with discussions with our advisory board of retailers.

In total, each retailer was scored against a set of 158 criteria points, including four key financial measures.

The total scores from each retailer were ranked to allow retailers to benchmark themselves totally and across each category.

Each retailer was assessed individually against the criteria, with no subjective views.

When a retailer sells multiple categories, such as a department store, an average was taken across all relevant categories.

Pureplay retailers, and those without a transactional website, were assessed in the same way as multichannel retailers. However, pureplay retailers were also ranked separately without including 21 of the criteria in the Cross-channel category – as seen in the pureplay rank (launching 19/7/18).

Financial score rating

Retailers’ financial performances were looked at over a three-year period, including growth and productivity metrics. Symbols are used to represent a retailer’s performance.

When this arrow is used, both a retailer’s sales and profits have shown growth with a healthy productivity measure.

When this symbol is used, either a retailer’s sales or profits have shown growth but not both. Their productivity measure does not present a risk.

When this arrow is used, both a retailer’s sales and profits have shown decline. In many cases, retailers with this arrow are making a loss and have an unhealthy productivity measure.

The following retailer’s scores were not based on a profit or productivity measure as these are yet to be reported: Finery; PetsPyjamas; Houseology; Allbeauty; SilkFred; and Lidl.

All calculations are based on the latest available accounts for each retailer as of April 2018.

Additional

From when the analysis was conducted to launch, Poundworld fell into administration and has been removed from the rank. This has brought the rank to 179 retailers. However, Poundworld was placed in 180^th position.