Bricks or clicks? Which is likely to give a better return to retailers for the investment of money, time and effort?
The discussion is continuing on all fronts and the name of the game, ultimately, is about winning market share. If we accept that the UK and Republic of Ireland is overshopped (as we’ve known for years), and that consumers are not spending as freely as they did before the financial crash, growth can only come at the expense of someone else.
New businesses, of course, have a chance to make their mark and add sales relatively quickly, but for more established retailers - of any size - the struggle to add to turnover is a marathon, not a sprint. Until recently, ‘going online’ was seen by some people (and maybe still is) as a get-rich-quick scheme that would make everyone in the world with access to the internet a potential customer. The pot of gold, however, is beginning to look a lot less shiny.
Whenever I see figures about the percentage of internet sales in the UK - around 10% of total fashion sales seems to be the latest estimate - my immediate reaction is “Well that means 90% is still sold in a conventional way”.
It is interesting to speculate about the figure at which online sales will level out. Maybe 15%? Or perhaps 20%? Can it really go much higher than that? I am intrigued about why the Brits appear to be the most voracious internet shoppers in Europe, if not the world. We are supposed to have the best high street multiples on the planet and there are still plenty of fine independents around, as our Drapers Independents Awards lunch on November 7 will confirm.
Geographically the UK is relatively compact and most people live pretty close to large retailing centres, so the stupendous pace of growth of ecommerce is all the more intriguing. It cannot all be explained by convenience, can it? I would love to hear readers’ own theories.
Meanwhile, retailers large and small have to wrestle with the problem of how much attention to give to multichannel activity.
At this week’s World Retail Congress (WRC) in Paris, there was a surprising (or encouraging, depending on your appetite for online selling) focus on product rather than websites. This may be because the WRC attracts the industry’s hotshots from all over the globe, not just these islands, but it may also indicate that etailing is just one form of distribution, not the only one.
At the other end of the retailing spectrum from the WRC’s delegates, independents are still divided about the overall merits of running a transactional website. Having a good site as a marketing platform, a digital shop window for the business, is a must, of course. There’s no discussion needed about that. Going around the country judging our awards, however, I met a number of bright retailers who were disenchanted with the financial results their transactional site produced when weighed against the time, manpower and marketing costs it required. Several specifically mentioned the galloping costs of pay-per-clicks, Google Ads and the like.
Many independents are asking themselves whether that time, money and effort would not pay better dividends if spent, say, on refurbishing the store, or doing more local marketing activity, or investing in more sophisticated staff training.
Precious few independent businesses are cash-rich and any money, of course, can only be spent once.
It was interesting to read the comments this week of Henry Taylor, who is returning to Reiss to extend its personal shopper service to more stores. He makes the point that many retailers have become so obsessed or preoccupied with online that they have neglected to make the in-store shopper feel special, something indies ought to excel at.
To pick up a thought that came up during our judges’ meeting last week, imagine if all we’d ever known was buying fashion remotely off a computer. Wouldn’t the idea of going to a local place where you could touch and try on garments and instantly build outfits while talking to knowledgeable staff and enjoying a multi-sensory “experience” seem attractive? That’s just an idea that might catch on.