THE RETAIL BULLETIN - The home of retail news
Lest we forget
HOME
RETAIL NEWS
RETAIL EVENTS
Fashion
Department Stores
Shopping Centres & Retail Parks
Home & DIY
Electricals
Health & Beauty
General Merchandise
Entertainment
Sports & Leisure
Retail Solutions
Food & Drink
Interviews
RETAIL INSIGHTS
RETAIL SOLUTIONS
ABOUT US
CONTACT US
SUBSCRIBE FOR FREE
Comment: What makes Adidas more inclined to invest in e-commerce than Primark?

The news that Primark has chosen the high street over the internet, deciding not to open an online store, is an interesting issue. By Heikki Haldre

OMNICHANNEL

Comment: What makes Adidas more inclined to invest in e-commerce than Primark?

The news that Primark has chosen the high street over the internet, deciding not to open an online store, is an interesting issue. By Heikki Haldre

This goes against the strategy adopted by almost all other clothing retailers. Fits.me’s virtual fitting room is already in use by brands investing heavily in e-commerce, including Adidas, Pretty green, Thomas Pink, Hawes & Curtis, L.K.Bennett, and many more. Heikki Haldre, CEO and founder of Fits.me, shares his thoughts on whether Adidas should be more inclined to invest in e-commerce than Primark.

“Primark’s recent announcement that it will remain offline is a strategy that cannot endure for long. It is clear that the future of shopping belongs to online. Those retailers that hope that online does not affect their business models will lose out, while those which embrace the internet will be the winners. This applies to internet newcomers like Benetton, or those who have decided to wait – like Primark.

“However, facing the facts, some business models win more or stand to lose more from their internet strategy.

“The high end brands need to invest heavily into their online offering, making sure its customer service and customer experience is as good as in their brick-and-mortar stores. High purchase return rates – 25% on average, up to 60% on some women’s wear – reflect that their online customers are not receiving this quality of service yet. These brands need to make sure their online store does not diminish their brand value by offering standards that don’t meet their customers’ expectations. 

“The mass-market brands, such as Adidas, view their online channel as one of the most important source of revenues. Their online store is their biggest in terms of sales and should get similar attention in terms of business investments. Let’s face it – some customers still hesitate when buying online, so these businesses are investing into technologies that help customers buy the garment they want, the first time they buy it.

“And then there’s Primark, a company with an enviable business model and results.  In my opinion, Primark must move online. Its prices are so low that it is among the very few retailers that do not have to worry about costly returns. For a customer, returning an item is simply more of a hassle than to bear the cost of keeping it. Online, when optimised out of the warehouse, will have tenfold higher per-square-foot sales figure compared to any of Primark’s stores. It has cultivated itself a loyal following among all segments of customers – 14% of Primark’s customers are those of the “A-class” – the same who would shop at Harrods. 

As with all online stores, this helps Primark extend its store opening hours to 24/7, tap into an existing base of customers who would unhesitatingly buy online, and reach the customers who live a long distance from its existing stores. Look at it this way – if Primark has plans to open another 15 stores this year one should be online – it’s equal to a multitude of stores.”

 

Email this article to a friend

You need to be logged in to use this feature.

Please log in here

Subscribe For Retail News

RETAIL EVENTS

The Retail Design Seminar 2018
The Retail Design Seminar 2018
14 November 2018
The Cavendish Conference Centre
The Retail Design Seminar 2018
Omnichannel Futures Conference 2019
Omnichannel Futures Conference 2019
6 February 2019
Cavendish Conference Centre, London WG1 9DT
A truly omnichannel offering requires an understanding of customer behaviour across all shopping channels and how this should impact your overall business strategy
Customer Engagement Conference 2019
Customer Engagement Conference 2019
5 June 2019
Cavendish Conference Centre, London W1
The 10th Annual Retail Customer Engagement Summit
AI in Retail Conference 2019
AI in Retail Conference 2019
18 September 2019
Cavendish Conference Center, 22 Duchess Mews, London W1G 9DT
Retail marketing is changing pace rapidly by making communication across all platforms personalised, relevant, efficient, and helpful. AI not only helps shoppers find a perfect product but also pre-empts the shopping behaviour and speeds up payment.
The HR Summit 2019
The HR Summit 2019
Tuesday 8 October 2019
The Cavendish Conference Centre, London W1
The 11th HR Summit 2019, The Cavendish Conference Centre, London W1, 8 October 2019