Recently there has been great discussion regarding the decline in sales revenues for M&S and Debenhams; companies which are mainly brick and mortar locations (mainly rely on in-store sales). E-commerce companies such as Boohoo, however, have experienced massive increases in their profits. (Boohoo pre-tax profits have increased by 97% to £30.9 million in 2017). This has raises the questions: Are Clicks the future of retail? Is there still place for Brick locations?
US e-commerce provided 20% of sales and 77% of sales revenue last year alone and the marketshare for e-commerce has been increasing by 10% every year. However, it may not be as simple as offline and online sales since there are other online channels emerging:
- Social Media Websites – allows customers to shop without leaving the page they’re on. ‘Buy Buttons’ have been incorporated into social media sites such as Twitter and Youtube. In addition to this Facebook now has a shopping tab.
- Marketplaces – enables businesses to sell products to customers who have never visited their website e.g. Amazon.
- Comparison shopping engines – allows customers to search for products and compare features such as price and quality e.g. Shopzilla
As a result of the rise in smartphones, in the last couple of years, considerable investment has been made into m-commerce. Most supermarkets have apps aimed to enhance the in store experience or make ordering online more convenient. However, very few are overly effective. Zara, however, seem to be leading the way with a very popular app, specifically designed for their Oxford Street store. It allows customers to scan items that they pickup as they shop allowing the checkout to automatically scan what clothes they’ve bought. This not only speeds up but also enhances the customer shopping experience. In addition it encourages customers to come into the store to shop.
In conclusion, in order to stay competitive companies must consider convenience for customers via their online platform. Alongside this they must also ensure a memorable in store experience to enhance the character and position of their brand. Therefore, I believe there is still a place for brick and motor locations as this enables companies to maximise profits and access a greater market.
In the future I hope to set up my own company, and being aware of this has really opened my eyes to the importance and scope of technical advancements, and it is something I will continue to research and explore.
Photo credited to LinkedIn
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