As Primark looks online, what next for the UK high street?
As Primark becomes one of the last bastions of the UK high street to begin offering online shopping to its customers, Hugh Stevens assesses what this means for retailers and for the wider UK high street.
After years of insisting against it, retail giant Primark has finally taken the bold step to invest in an e-commerce platform. This is a pivotal moment for the British high street. Primark's step forward to a digital offering is evidence that being able to survive and thrive is becoming increasingly difficult as a physical store only.
While Primark has become a household name famous for its value for money, evolving lifestyles and an increasing demand to shop from the sofa has seen the rise of competitive brands that offer consumers the flexibility to quickly shop online, particularly in the context of what is now one of the deepest cost-of-living bites for consumers in decades.
Digital transformation agenda's accelerated during the pandemic spurring heavy investment in e-commerce platforms. Brands such as John Lewis and Boohoo Group both recently announced their intention to ramp up recruitment for IT-focused roles to keep up with the demand of online orders and to continue to provide a sleek digital experience for their customers. Retailers' focus on digital has totally transformed the retail landscape over the last decade and the more digital you are, the more data you hold. Retailers who have shown they can properly utilise data on and off the high-street are creating competitive advantage – this is the next phase; Data Transformation.
Much like the pandemic, it's becoming increasingly clear that brands who want to retain customers in the midst of a cost-of-living crisis, must adapt to new priorities. Their long-term survival is on the line, and opening up data-driven, omnichannel communication is imperative for anyone in retail, especially if they're looking to understand how to truly engage with today's digitally-savvy customer.
Moving to e-commerce requires upfront investment into digital teams and new operations – which will have some impact on Primark's business and numbers. However, it is an investment in the future – if given time to develop – thanks to the ability to better engage customers online and in-store.
Retailers with a solid online offering have been able to gather unparalleled insights about their customer's shopping habits to find and when, where and what they like to buy. When combined with insights into customers' shopping habits in physical locations, this enables a unified view of the customer spanning both offline and online habits. In turn, this makes it much easier for brands to market their products to the right subset of customers, whether they're browsing at home or browsing in-store.
As data transformation takes hold and strategies are implemented to benefit the retailers own bottom line, the collation of insights on consumer habits and customer behaviour, this also opens up new opportunities for data collaboration and new ways to monetise this valuable asset.
This is not to say that the British sentimentality of roaming the high streets is dead. When Primark stores were shuttered and closed during the lockdown, the pent up demand was evident. When stores reopened, there were unprecedented queues to enter the stores. Physical stores have shown that they still have immense value to offer, and even more when complemented with an online offering.
This bold step in their growth journey will pay dividends for Primark. They now have the opportunity to unite their in-store and ecommerce data and create a unified view of the customer, whilst still putting customer privacy first. This will ultimately help to generate deeper and broader customer insights to help Primark better compete with the fast fashion giants that have dominated the industry, and give them a leg up over any competitors that are still exclusively brick-and-mortar.
The success of Primark's online offering will be watched closely by the industry as the final few in-store only retailers may seek to mimic their move against the dramatically changing consumer landscape. The tangible benefits may take some time to bear fruit and there will likely be teething problems along the way, but the deeper connection between the brand and their customer base will foster an unrivalled understanding of what their customers really want. This better prepares the brand for the long term, and it will be at the forefront of the next stage of growth and success for Primark and the high street it calls home.
