Are multiples falling out of fashion?TrafficInsight: Revenue comes from traffic that converts. Having more traffic than your competitors is a real advantage

Analysis: Among the four companies in this set, there are c.49.2 million visits on Google in a month from desktop/laptop alone. In our experience adding in tablet/smartphone visits adds even more (more than another 50%) but these will be distributed in broadly the same pattern above. That’s more than 3 visits per month for every adult in the UK. Next capture c.33% of this traffic, but Debenhams, for all the noise, isn’t that far behind.

Paid CampaignInsight: If you are confident about your sales execution (i.e. customers stick on your pages and convert well) then you don’t have to outbid your competitors to gain a top 3 ad slot, which is where you will attract exponentially more traffic than position 4 or below.

Analysis: This tells you two things: first Next’s traffic advantage does not come from paying for traffic – its brand does the work. The other three are reducing their margins online by buying traffic in roughly the same numbers. This will really be hurting the House of Fraser who attract significantly less traffic than the other two; however, that said they are getting more of their ads in the ‘top three’ spot than the others and significantly more in position 1 and 2 combined. This suggests that they may be benefitting from a quality score advantage and their landing pages are working harder to convert interest. John Lewis and Debenhams look less effective.

Landing PagesInsight: Landing pages are a mark of how well you understand the different customer needs that you are fulfilling. More pages and more thought is being put into the marketing proposition and the following sales execution

Analysis: Although all these players have a landing page ratio of over 50%, only John Lewis can outperform Amazon whose current ratio is 69%. If, as the John Lewis boss suggests, they are being beaten by online shopping then they will all need to up their game to ensure they at least meet the standards of the most effective performers.

ToolboxInsight: Listening to your customers is vital, without understanding the needs and wants of a potential buyer it is near impossible to improve conversion.

Analysis: Category leader Next seems far less interested in their customers than any of the others in that they neither track how they engage with their pages nor do they engage with them online for their feedback on the customer experience. Of the others, only Debenhams has anything in active use that could be used to elicit customer feedback. Disappointingly at the time of writing, they aren’t using it.

What can you tell from this?The obvious conclusion: There is no obvious winner or loser in terms of e-commerce effectiveness but by dint of attracting far more traffic and having to pay for very little of it, Next continue to outperform the competition.

The inevitable conclusion: House of Fraser attract far fewer visits and pay for a far greater proportion of their visits than do their competitors. This will be doing their margins no favours.

The surprising conclusion: John Lewis have gone off the boil: when we ran a similar comparison earlier this year, our benchmark tool gave them a much better score of 7.2 and one of the biggest differences from then to now is the amount of traffic they attract to their site, which has decreased we believe by over 20%. Unlike their competitors in this set, John Lewis is the only one in this data set to suffer from a decrease in traffic. Some of this might be as a result of the continuing shift to mobile, but this isn’t specific to one player and traffic changes for the others suggests that John Lewis is suffering particularly badly in this respect as traffic to Next, Debenhams and House of Fraser all increased - by 24%, 17% and 6% respectively.

The insight: Given the financial reporting from each of these players, this outcome is not that surprising – what might be more so is the sheer scale of online visits that the UK’s home and fashion multiples continue to attract every month. Yes, Amazon do attract c.167m visits in the UK every month and Argos attract c.46m, but in terms of the largest online brands, all four of these brands are in the top 10 in the UK and all, bar House of Fraser, attract more search visits than ASOS (c.10m). For those really struggling, whilst the cost of channel shift will be damaging profitability, the real issue isn’t getting the online customer into the store, it’s persuading them to buy.

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Total search traffic (paid & organic)

Paid Campaign

1 2 3Ads in position

Ad Position

Landing Pages

Toolbox

Are multiples falling out of fashion?

0

20

40

60

80

100

Search Traffic

62 59

7368

Ad position in Google (based on top 100 AdWords)

(bas

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n to

p 10

0 A

dWor

ds)

AdW

ords

in p

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on

How they score against the Good Growth Benchmark

5.2/105.2/10

5.0/10

4+

On-

page

A

naly

tics

Ana

lytic

sVo

ice

ofC

usto

mer

Split

Test

ing

Oth

er

Adobe AnalyticsAdobe Marketing CloudGoogle Analytics

Adobe Marketing Cloud

Adobe Marketing CloudMaxymiser

UserZoom

Adobe AnalyticsAdobe Marketing CloudGoogle AnalyticsKrux Digital

Adobe Marketing CloudMaxymiserMonetate

BloomReachConfirmitSub2 TechnologiesYahoo Dot

Adobe AnalyticsAdobe Marketing CloudGoogle Analytics

Adobe Marketing CloudSessionCam

Adobe Marketing CloudMonetate

Google Analytics

Monetate

12,000,000 16,000,000 20,000,0008,000,0004,000,000

14,626,054

7,481,627

10,592,928

16,726,166

0

520,676 267,314AD TRAFFIC

KEYWORDS

AD POSITION

526,547 528,714

23,319

1.5 1.27

47,680 62,121

1.47

11,256

1.43

0

10

20

30

40

50

60

70

80

Customer ForeSee Results

Adobe Marketing CloudSessionCam

BloomReachYahoo Dot

5.0/10

www.next.co.ukwww.johnlewis.comwww.houseoffraser.co.ukwww.debenhams.com