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The greatest choice wins online
Archived article dated Friday May 22nd 2009
Although online sales continue to grow at a fair clip for most retailers, many of the well established internet merchants are likely to be getting close to reaching a plateau online, with the main opportunity for growth being the addition of new categories.
By Glynn Davis
Fresh from adding products from Gap.com and Mango to the ASOS website, its chief executive Nick Robertson, reckons the problem for the likes of John Lewis is the level of choice they are able to place online.
Once they have put their full store inventory online then unless they do something different and expand into other areas there is a high likelihood that a plateau in sales growth will be reached very soon. This is not good news, especially with online still representing the one great hope for many retailers.
This is why Robertson is a great fan of Amazon, which continually adds to the categories it sells online. It has long since gone from being just a seller of books to a purveyor of pretty much everything.
He might not be such a fan of the business if it was a threat to ASOS. But for non-commodity products - e.g. fashion - he suggests it is not that good a competitor as brands want their goods to be presented in a superior environment to that provided by Amazon.
However, for standard clothing and food as well as myriad other categories he believes it will prove to be a very powerful rival. And what makes it even more dangerous is its apparent disregard for margins.
It is more interested in making a fixed amount of profit per product, which means its expansion into ever more retail categories will have widespread implications for many merchants who will find it increasingly tough to compete with its aggressive model.
glynnd@theretailbulletin.com
Tagged as: online | etailing | internet
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