People won’t buy fashion online.
They want to see it, feel it, try
it on.” Less than two years ago
the chief executive of a major
fashion retailer was emphatic
that the internet wouldn’t
affect them. He wasn’t alone. People might
buy books or DVDs over the web, but
fashion? No chance.
Try telling that to Nick Robertson,
co-founder and chief executive of Asos.com,
a phenomenon of online fashion retailing.
Asos stands for As Seen on Screen, and has
cashed in on consumers’ fascination with
celebrity lifestyles by enabling them to buy
outfits worn by the stars from its website.
But this is no niche player. From nothing
in 2000, the company is now valued at
around €300m. It wins awards for retailing
innovation so frequently they have almost
become routine. And in the most savage
consumer downturn that UK fashion
retailers can remember, it grew sales by
90% to €105m for the year to the end of
March – it’s profitable too. As Robertson
puts it: “People choose to shop on the
internet for value, choice and convenience
– it’s nothing to do with the economy.”
If there’s one indisputable truth about
retailing on the internet, it’s that the
established retail cliques have consistently
underestimated how it would grow. That’s
allowed the new wave of entrepreneurs, led
by Jeff Bezos of Amazon and Pierre Omidyar
of Ebay, to break into mature markets where
they theoretically had no right to become
established, and build that foothold into
positions where much longer-established
retail rivals operate in fear of them.
Now online retailing is entering its next
phase, and a fascinating showdown is
taking shape. The big beasts of the industry
now know they can’t ignore the internet,
so they’re muscling in. And while some of
their efforts are surprisingly defeatist – UK
retail giant Marks & Spencer is employing
a rival retailer, Amazon, to run its site
– signs suggest that few will give up their
entrenched positions without a fight.
The start of the 21st century has been
the era of online retail. In this age of
multichannel retail the customer rules, and
the successful vendor will fit in with the
shopper. Want to buy a TV online at 2am
and collect it from the store the next day?
You’ve got it. See the TV in store but don’t
have a car to take it home in? The retailer
will do it for you.
Only established retailers with a
combined store, web and catalogue presence
can offer the full range of multichannel
options. And for those who have cracked
the challenge of ensuring the stock is in the
right place and that its staff are tuned into
the vision, it can be transformational.
Argos is a peculiarly British phenomenon.
It pioneered the concept of catalogue
shopping, where the stock is held in a
shop’s storeroom and brought out when
a customer orders it, thereby increasing
dramatically the number of lines which
its store can carry. Argos stores are modest
affairs – the ambience is similar to airport
arrivals halls, where anxious shoppers
nervously await the appearance of their
goods from behind a mysterious screen.
But its catalogue heritage gave it a unique
advantage in the multichannel stakes. It was
already used to fulfilling customer orders
remotely, and keeping tight control on what
stock it has and where it is. Now this most
unglamorous of retailers finds itself as a
pioneer of multichannel retailing.
One day in the run-up to last Christmas
– a time when customers most seek
guarantees that products will be in stock
– its ‘click-and-reserve’ service, enabling
customers to ensure the product is in store
waiting for them, took 250,000 orders. Over
a third of Argos’ sales now involve more than
one channel. It has even been paid the ultimate
compliment by the mighty supermarket
Tesco, which has moved into its territory
with the launch of a non-food website and
catalogue – but Argos has defied the market.
Indeed Argos illustrates that in the
multichannel retail age, consumers are
harnessing the potential of the internet
intelligently. It is not just about ordering
items for delivery, although as Asos shows
there is plenty of that going on. Web 2.0
technologies are beginning to be used to
build communities among customers who
share similar interests linked by the brand.
After all, if shoppers are excited by the same
shops, the chances are they will have similar
interests they may want to discuss. It’s early
days, but retailers are beginning to recognise
that incorporating social networking into
their websites can improve customer loyalty
and encourage add-on sales. UK supermarket
chains Sainsbury’s and Waitrose have
embraced the potential of attracting foodies
to discuss products and recipes on their sites,
which while reinforcing their credentials, also
tempts shoppers into buying to create the
recipes discussed.
|