Can brands survive without an online presence?
It’s hard to think of many retail brands that don’t have an ecommerce platform these days. With almost 20p in every £1 spent online, websites have more than proven their place as an essential part of a winning channel mix.
Looking across the retail sector, the lack of adaptability and flexibility to embrace a more omnichannel customer experience has been attributed to the demise of a number of high-street giants. It is of course far more complicated than this but it’s hard to ignore the connection between those brands who are investing online, and as a result in sales, versus those who aren’t.
The reality, however, is that retail is experiencing a difficult time regardless of the primary retail channel. ASOS, the online-only fashion retailer, issued a profit warning in December as a result of weaker than expected trading. At the same time, Aldi, who have a predominantly store-only approach, saw record in-store sales during the Christmas period and is set to open an additional 70 stores in 2019 alone.
But what about those who buck the trend completely? For some, like Primark, online shopping has simply never featured as part of their mix and they make no apologies for it. They are clear that their USP lies in low-cost prices, high volume merchandise and the equivalent of instore upselling – relying on store browsers picking up more than they intended as they peruse the goods on offer. For them, online would create costs to the business that would be unsustainable and unpalatable. For example, up to 40% of online purchases are returned which incurs additional expenses associated with shipping costs and many returned goods are unsellable due to either damage or simply the length of time it has taken to be returned.
What Primark has done very successfully though is leverage social media. Acknowledging its target demographic is more teen/young adult than silver surfer, they are active across all of the main social channels and have tapped into these as a way of connecting with the very people it knows will make the trip into town to visit one of its stores.
Interestingly, while a brand like Primark has always prided itself on treading its own path and bucking the trend of things like black Friday discounts or adding an experiential element to its instore experience, we’re now seeing it soften this stance. In its flagship London and Birmingham stores, it has recently launched a partnership with Duck and Dry Express to offer a beauty studio experience for its customers at budget prices, creating yet another reason to draw its bargain-hungry but fashion-conscious shoppers into its stores. You’d never get that from a website!
It’s not just retail that is turning its back on online through. In the supermarket sector, Tesco took the decision last year to close its non-food website Tesco Direct. The site, which operated as a separate trading arm to its grocery site, sold predominantly household goods and clothing and had positioned itself as a competitor to the likes of Amazon and Argos. However, after a sustained period of loss-making, the retail giant concluded that it cannot see a way of making the site profitable and shut it down.
At the other end of the retail spectrum, research from eBay last year showed that over 25% of SMEs have no online sales presence at all. This has sparked a year-long pilot in Wolverhampton designed to partner these small retailers with more established high street brands who can help them make the most of technology and show what can be achieved through a global marketplace platform such as eBay. The pilot is still underway, but it has been based on a similar initiative in the US that saw sales significantly increase as a result of expanding the channel mix online.
So, what does this all mean?
Clearly, retail brands up and down the UK are showing that yes, you can make it work without investing in an online ecommerce platform. But the more pertinent question is, why would you want to?It’s indisputable that customer habits have changed and evolved and they now expect a far more sophisticated shopping experience. From reserving online and collecting instore, ordering for home delivery, browsing local stores and even wandering around local markets and pop-up stores, savvy shoppers expect to find an experience that will meet their specific requirements at that time. It’s hard to see why the majority of retailers wouldn’t want to incorporate the many benefits of online into their channel mix as surely the optimum customer experience lies somewhere between the two. The answer, however, most likely lies in improving a brands understanding of the entire customer journey and the role that technology has to play in this to deliver a flexible and creative multi-channel experience that truly meets the customer needs.
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