Online or on the high street – which do you prefer?Posted: February 9, 2011
Will the battle for the consumer be on the high street, or on the web? According to two stories of executive moves yesterday, the vote looks to be going with online growth.
First up was news that Marks & Spencer has poached Laura Wade-Gery from Tesco, to mastermind the growth of its online sales channel. This is one lady in demand, apparently Tesco only promoted her a month ago – let’s hope she delivers for Marks. The M&S online commitment is clear, and the company has indicated it wants to move away from using Amazon, as it does currently, to provide infrastructure support, and develop its own independent web platform.
Meanwhile, Best Buy UK, which has long been planning its expansion into the British electricals market, has lost two directors, following the recent departure chief executive Scott Wheway out of the door. Kevin Styles, who joined as marketing director almost two years ago, is off; as is commercial director Harry Parmar.
The Best Buy strategy of opening some big box stores around the UK has had an inauspicious start. The company has fallen behind its own stated aims for store openings with suggestions it was simply not able to flex to the realities of leasing retail space in the UK. Those stores that are open do look and feel great, according to reports – it’s just most of us have yet to go near one.
But the question is, do we really want a nice store to buy electricals? Sour memories of Dixons staff trying to hard sell me a warranty I didn’t need still temper my desire to visit a store, and online shopping for core products means an easy way to compare prices and specifications – as well as enjoying reviews from other consumers. You can’t help thinking it would have been easier for Best Buy to grow their online business in the UK, ahead of trying to build a physical chain.
And visiting an electrical goods shop can still be disappointing. Last week I tried to find a retail outlet where I could check out an Ipad and a Samsung tablet side by side, but failed and gave up. Even John Lewis apologetically told me that, while they stock Ipads, the Samsung remains an online only item for the next few weeks. Down the road, Carphone had a finger smeared Samsung to try, but no Ipad.
It’s curious to view the contrasting strategies of these two outfits. M&S clearly views online as its next big expansion area, probably thanks to watching companies such as John Lewis make such a big and successful push in this direction. Research I undertook recently, demonstrated just how many retailers are taking the web much more seriously than they did two or three years ago. Britain is one of the leading countries for the adoption of online retailing, thanks to a reliable, cheap delivery infrastructure and high computer use; other markets will follow, and can emulate the model. While there is a significant upfront cost developing a good web platform, ultimately the business can grow with lower variable overheads than traditional store-based retailing.
And while clothing is apparently one item folk still like to touch and try on before they buy, the success of online-only clothing retailer Asos shows what can be achieved with the right infrastructure of handling returns and providing appropriate sizing information. M&S look to be heading in the right direction.