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Shops are still essential in a nation of online consumers

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.

Readers' comments (2)

  • Dear Mr Musgrave.
    This idea has caught on.We have quite a few people who love to experience our great store.They try on the outfits for size and use my experienced staff to advise them on building an outfit.They then proceed to scan the bar tag or photo the style code blatantly in front of you with their smart phone and go home to buy online.
    Until some of our suppliers police discounting online properly the whole Premium sector which we are in is being eroded and eventually there will be no stores left to provide this experience !
    Large Supermarkets are the prime example.They have destroyed local independent shops and now cannot wait to open one near you.
    I have not noticed Bentley or Ferrari holding mid season sales.Until a stop is put to this practice the brands will be at the mercy of the mighty few .I think it is about time they looked hard at the long term picture.
    Kind regards,
    John Harrison.

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  • Thierry BAYLE

    Eric, John,
    I focus on the business side of retail - stock management and people management - and let's remember that to improve operations we need to work hard on the retailer's 2 greatest assets : stock and people.
    Yes we should work on continuous improvement with staff. I often hear that they have been here X years so they know it all. Some boutiques do not have weekly sales techniques, product knowledge meetings. Some boutiques do not track traffic, conversion, sales per staff per hour ... How can you improve the business without the numbers. If you can't measure it, you can't fix it.
    I will not say that digital, mobile technology, ecommerce.. are not important, they are.

    I was speaking with a retailer this week: The problem was the internet and the lost sales they generate. Yet , when you ask this retailer what percentage of sales is affected by this, he answered 20%. We convince ourselves that the issue is the internet ( it is but there are other issues ), we don't have a plan and we forget to improve the buying, the training, the shopping experience, the review of expenses, the processes, the numbers... the things we control
    This same retailer had no numbers to drive a better business.

    Every time we talk about discounts, we forget to put on the table whether there has been an issue with buying. Did we buy too much?
    We operate an open to buy perfectly suited for independent shops ( ie even for a 1 shop operation ) and you can frequently see classes that are over bought before we start. Retailers can be very optimistic ( it is a good thing ). However, when the planned sales is not reached then we need to take action in season otherwise all the profits disappear.

    John must be doing the right things about the case study he shared with us. I could imagine other retailers seeing those consumers taking the bar code and doing nothing.
    Once again, it will not be easy however I would tell my staff to have a rehearsed sales pitch to approach this person, collect his contact details so that on the day or over time we understand what we did right, what we did wrong, what could we have done to get the sale, whether the ecommerce got the sale, which operator got the sale, what they do that we do not do, ...

    Once again, it is about continuous improvement. Never easy however more challenging and fun.

    Internet is here to stay and I believe we need, over time, to be able to create a multi channel shopping experience (the internet channel could be on a collective web site and not on the retailer's own web site - those collective platforms exist already - Do we have data to back up if it is a success for independent retailers to be part of this collective platform?)

    Thierry
    @retailfashion

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