Comparing Realistic Strategies In Fashion Online

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Why some fashion stores like Penneys and TK Maxx resist selling online

However, while most large chains have rolled out online equivalents of their brick-and-mortar presence, a handful of the industrys biggest names like Penneys and TK Maxx remain staunchly offline in Ireland. Ex-Debenhams Ireland general manager Linda Ward, who owns a consultancy firm called Retail Renewal, says theres a simple reason why clothing stores might resist e-commerce: online and offline are two completely different business models. Bricks and mortar shops have a shop front and the stock is located in the store. Obviously thats quite high-cost, particularly at the moment when retail rents are predicted to increase 6%, she says. Then youve got the online-only retailer who uses a website for their shop front and they use a warehouse to locate their stock, which are both low-cost items. In other words, for a major retailer to move into the online space, theyd have to compete with purely online players like Asos and Boohoo.com, which have lower costs and have built their entire supply chain around e-commerce. Ward says its important for retailers to remember that many brick-and-mortar stores that have delved into e-commerce have ended up doing neither thing really well. Its distracted their attention away from their core activity The online retailers have set themselves up as e-commerce from day one. Establishing a web store requires a significant amount of investment, says Owen McFeely, director of retail and consumer practice at PwC. Its costly in a number of ways: day-to-day running costs, supply chain costs, delivery truck systems, IT, the people required to actually run the warehouse and pick the stock, he says. Theres an initial capital investment needed to open a dedicated warehouse or fulfillment centre too. When you layer all those costs together, you have to then assess whether a return on investment is able to rebate. PwC recently published a retail and consumer report that surveyed 1,000 people about their online shopping habits.

For the original version including any supplementary images or video, visit http://www.thejournal.ie/fashion-retailers-online-shopping-3-3981621-Apr2018/

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