Among those retailers that have flourished over recent years against a backdrop of disruption across the entire sector has been Primark.
Specializing in low cost ‘fast fashion’, the firm, which opened its doors in Dublin in 1969, has expanded its physical retail presence at a time when others were shuttering their doors. There are 402 stores at present - the largest to date in Birmingham, covering 161,000 square feet over five floors - with plans to expand to 530 over the next five years.
And those stores are hugely popular. When COVID restrictions were lifted in the UK, a common sight up and down the country were the massive Iines around the block with customers eager to feed their Primark fix after months of enforced cold turkey. That was because there wasn’t an e-commerce option to meet the pent-up demand when the store doors were locked.
While other retailers were able - in theory, at any rate - to transition to an online sales model, Primark could not, which cost the brand and its parent company Associated British Foods heavily on the bottom line. As ABF’s annual report for 2020 noted starkly:
Unable to sell anything, Primark moved from profit to loss in a few short days, with no visibility as to how long these conditions would persist.
That left some commentators wondering if this shock to the system might get Primark more engaged with an e-commerce strategy to mitigate against any further macro-crises that it might need to ride out? The answer to that looks to be yes, but no, not really.
Up to a point
Last week the UK mainstream media got very excited about Primark launching a new website, something that was deemed to be a major online shift by the retailer. But closer inspection of what’s actually being rolled out reveals that to be a notion that's doing a lot of heavy lifting!
The new site is essentially a shop window for customers. You can now check out thousands of items in the Primark clothing and homeware catalog. But you can’t then buy those items online or have them delivered or place a click-and-collect order.
What you can do is check out whether your nearest store has the item you’re interested in buying on the shelves, which is something that you couldn’t do via the previous, very limited online presence. The Stock Checker works on a color-coded basis:
- Green – The item is in stock
- Orange – Stock is running low on this product
- Red – This item is now sold out / out of stock
- Grey – This item is not available in this store.
You can also get a lot more product information, such as fabric details, after-care advice and sourcing of materials, the last of those being an important tick-box item, particularly in the ‘fast fashion’ industry, at a time when consumers say they put sustainability high on their criteria when selecting products.
But - yes, another one - if you find your tee-shirt or jacket or whatever and it happens to be in stock at your nearest store, you can’t then reserve that item. Click-and-collect is not on offer here. It’s also a real-time instance of what the stock position is at the moment when you conduct the search. There’s no guarantee that the actual item will still be available when you get through the doors an hour later.
That’s in stark contrast to other ‘fast fashion’ firms, such as H&M. As noted in the past, H&M went through a turbulent period when its stock management position left an enormous amount to be desired. There’s been a lot of work done since then and the H&M website is now pretty good. You can check out store availability, as with Primark, but crucially you can then order online if your chosen purchase isn’t in your local store or if you just want it to be delivered anyway, as well as being able to exercise a Buy Online, Pick-up In Store option.
Why not Primark?
So what’s Primark’s thinking here? It’s making no secret of the limitations of its online upgrade. The official press release for the website launch is headlined ‘Find the look then shop in store' (sic). It goes on to pitch that the new website has been created to “better connect the journey between searching online and then shopping in store”.
Paul Marchant, Primark Chief Executive, is quoted as stating:
We know our customers love the experience of shopping with Primark and the surprises they pick up when they come into our stores – it’s what makes Primark special. However, we know that they also want to browse the latest collections online and be able to check availability, which is what our new website makes possible for the first time.
This new website and new features mark a significant step forward for our business and represent a shift in the role of digital at Primark. The new site also gives us a great opportunity to reach a whole new set of customers, enabling us to showcase the great range of products we offer when they’re browsing online to help tempt them into our stores.
For the moment, the upgraded online presence is limited to the UK, but will roll out to Ireland, Spain, Portugal, Germany, Austria and France by the end of July, with Belgium, the Netherlands, Italy, Czech Republic, Poland, Slovenia and the US to follow by the end of July.
And there will be additional functionality to come over time, including, says Primark:
- Personalized content – customers will be able to create their own accounts to save their shopping preferences, receive personalised updates from Primark via email and create and save a Wishlist of their favourite products.
- Newsletter sign up – customers will be able to sign up to receive an email newsletter to keep up to date with all the latest Primark news.
- Social integration – closer integration with the Primark social channels to allow customers to link directly through to the website for all product info.
But there’s nothing transactional on the agenda it seems. In fact, nothing appears to have moved on since ABF CEO George Weston declared during the UK’s first COVID lockdown:
Our decisions online will be taken in their own context, not because of a once-in-a-hundred years pandemic!
The problem is simple enough - Primark just can’t make the economic case for an e-commerce model to work. This is hardly unknown. As noted before, even the mighty Walmart has struggled to get its online operation to turn a profit.
Primark makes low cost items and operates a very tight business model. Getting into the complexities of managing an e-commerce operation, with factors such as supply chain integration, warehousing, delivery, handling returns etc - all things that consumers expect their online providers to be able to offer - would add costs that the firm can’t justify, even if the Walmart/Target model of using stores as distribution hubs were to be adopted.
Will this situation ever change? Well, clearly never say never. Last month Chief Financial Office John Bason was quoted as stating:
We’re making the digital move forward in a very big way in both the UK and the rest of Europe. That will generate sales and profits for us. Does this give us a capability to move further forward? Well let’s have a look at that.
But he remained clear that home delivery is not an option:
If there was an e-commerce opportunity for us, it will probably be more in the area of click-and-collect. You can’t get our value by delivery to home, it’s as simple as that.
That’s the sort of statement that used to be aired by Marks & Spencer only a few years ago. That retailer has changed its position via its gambit with Ocado. Might Primark one day find its own e-commerce partner to make a more transactional move viable? Time will tell. But for now, it’s a case of getting down to the shop if you want to buy from Primark.