11 Mar Bricks and Mortar Retail Twitches
News yesterday morning that retail footfall has bucked the trend of the last few years and has finally reported a rise. There has been a slew of similar stories recently with high street denizen Jessops announcing an increase of sales by 20%, several companies like Dunelm and Joules pursuing aggressive expansion plans in bricks and mortar and even Amazon the purest of all pureplay eCommerce companies opening a shop! What does it all mean?
I was lucky enough to attend a dinner with the great Peter Williams last week. Peter describes himself as a retail revolutionary and he perhaps almost uniquely has a career which spans the reinvention of Selfridges all the way to being a director of ASOS and currently being the Chairman of Boohoo.com. So here are some thoughts of his and mine.
Retail is about customer experience and at different times that may best be served by on-line or in shop.
eCommerce accounts for 21.9% of total retail spend – in other words just under 80% of shopping still happens in store.
The fixed costs of shops are by many factors larger than eCommerce – staff and rates are just two of the elements that keep fixed costs high.
John Lewis Partnership on-line sales are 40% of its business. This is a good target for most multi-channel retailers on-line sales.
So the challenge is understanding how to mesh together on-line and off line through Multi-Channel, Omni-channel and the elusive Single Customer View. If you are worried about cannibalisation then you are probably spending too much time on internal competition rather than external competition! In other words don’t worry about where the sale is made just be pleased that it is a sale some competitor hasn’t made.
In fact the other conclusion is that maybe the statistic isn’t quite portraying what bricks and mortar retailers would like it to portray. The statistic is telling us that footfall is up. Increasing footfall is not necessarily the same thing as increasing sales.