Internet - where next?
There’s no doubt that the fast growth and development of the Internet now plays an important role in Retail. Thomas recalled that five years ago, John Lewis had no internet presence – then they bought the European wing of buy.com, not for the name but for the technology platform and the expertise of the people.
Thomas has been amazed by the growth and effects of having an online presence. “In our first year, Internet sales accounted for £7 million and this year, they expect to take £190 million. Ten years from now, John Lewis expect to taking £1 billion of turnover from internet sales.”
In fact, today most retailers have woken up to the exciting benefits of the Internet and the importance of making themselves available to their customers. On the one hand, it’s about a full-line department store and on the other hand, if the customer knows what they want to do, what they want to buy or they just want to do some research, they can go online. The website doesn’t dictate to the customer to visit the store; it’s about making yourself accessible through whichever channel the customer chooses. Thomas feels that’s going to be a strong, determining factor in sorting out the businesses that survive and those that don’t in the years ahead.
He acknowledges that online shopping is not the answer to everything. Shopping for clothes, nothing will beat the experience of driving down to a retail park and parking right outside Next, River Island and H&M and then feeling the material and trying on the clothing. The feeling is that people who shop online will have a specific objective about what they’re buying.
As Jones says “we’re not as developed in that way. We provide the convenience of an online food business.” He agrees that it’s as much about the experience of the service as it is about the convenience of clicking a mouse. The Internet is all about convenience but rarely allows a customer to engage with the product as closely as in a store.
However, most retailers realise that the Internet has an important part to play in Retail. At a time when sales are growing slowly and costs are rising, the Internet provides an extra space providing another opportunity.
Ratner warns that we ignore the Internet at our peril. While it’s never going to replace the high street, when you’ve got retail sales growing so slowly, rising costs and product deflation the internet will help. As Richard says, “If you’d asked me 6 years ago whether people would buy clothes on the internet, I’d have definitely said no, but I couldn’t be further wrong.” It seems that the internet is one of the major growth areas at the moment, so do not ignore it.
“It’s about making yourselves available to customers, however they choose to shop with you.”
Gareth Thomas
