Online Retailers VS The High Street

Recent news indicates that online retailers are still outperforming the high street when it comes to sales. In March 2010, there was a 15% rise in online sales compared to the same time last year. Online retailers really are showing the high street how it’s done, and if this continues, who knows what the future holds for the high street?

And we’re not just talking about a 15% increase in online sales that equates to a few thousand pounds. March 2010 saw shoppers spend £4.5bn online. You would think that many high street shops would throw in the towel with news like this, and yet still they battle on fiercely, positive that they can entice shoppers into the stores as time moves on. What they don’t seem to realise though is that they could have a much more profitable outlook if they adopted and embraced the online community, with a website that brings in potentially double what the high street store does.

Bricks and mortar stores are sadly lacking in their multi-channel marketing techniques, and still the internet remains a very profitable arena which many do not wish to consider. Primark, for example, is a highly profitable high street store, but imagine if they converted that to an online presence. Still, they insist on a basic website which shuts the door on ecommerce as customers are turned away with the lack of online shopping available. Is Primark missing a trick? Quite possibly, but with a fast-fashion turnover and stores overflowing with bargain hunters on a daily basis, they will probably have at least another couple of years before they start to think about branching out online.

Interestingly, the multi-channel retailers that have a presence online and on the high street showed the strongest sales performance with increases of 28% year on year.  In contrast, the sales for retailers that focus purely on online increased by just 1% in March 2010 compared to March 2009.

Despite these results, we don’t think fashion sites such as sole online retailer ASOS will be complaining about their profits. They have consistently outperformed other ecommerce stores and currently hold a very strong position with their brand power.

It’s clearly evident that many online retailers are highly successful, as are some high street stores, but it is really only the  multi channel retailers that hold the more enviable position of capitalising on profit margins.