Online penetration

Online penetration is the headline mix number in consumer and retail, and the first question about it is not the level but the definition. Like for like is an operating metric a company chooses to publish rather than a statutory measure, so IFRS does not govern it. Some retailers include online orders inside like for like, some report the two separately, and treatment of click and collect varies further still.

The consequence is that two retailers can print the same headline growth figure and mean different things by it. Ranking a peer set on that number without reading each definition looks rigorous and is not, and it is one of the easier ways to be confidently wrong in front of a client.

There is a second definitional question worth asking of the same disclosure: whether the company has kept its own definition stable while the channel mix moved underneath it. A definition changed mid transition makes the historical series useless in exactly the period a reader most wants to look at.

Once the definition is settled, the level itself is only the start of the analysis. A high penetration figure says nothing about whether the channel earns its keep, which is a question about cost to serve rather than about revenue mix.