The necessity of an online store

Thursday, 20 March 2014
Dutch fashion label Mexx recently closed down its online store and believes that it will be able to survive on year without a digital store. Mexx believes that it is better to have nothing, than to have a poorly functioning online store. "We would rather take some time off and return with an amazing online platform, then continue to let consumers visit a online store that we are anything, but proud of. At this moment e-commerce is not a large part of our business," said chief creative officer Julia Hansen to FashionUnited last month.


But not everyone seems to agree with their vision to wait until 2015 to open their new digital store. "The final throes of Mexx" and "Bizarre, try get your customers and SEO value back in 2015," were some of the Tweets sent out on Twitter. However is Mexx's decision to continue without an online store for a year really so unique? Is having an online store a necessity for fashion retailers in 2014?

'Retailers should let go if the idea that having a web shop is a necessity'

Dirk Mulder, sector manager for food & Retail at ING Economic Bureau recently told FashionUnited that he believes retailers need to let go of their conventional opinions on entrepreneurship, such as the need to have an online store for example. "Consumers today are volatile and busy. Retailers should really be trying to respond to this elusive movement. For example, by deviating from traditional business hours, but also by letting go of the idea that having a web store is a necessity. Of course, the Internet is an important medium today, but using social media platforms is also an innovative way of directing customers to your store."

Even as the trend towards online shopping continues to increase, a number of surveys indicate a strong preference to in-store shopping over online shopping. For example, this year there are more shoppers than ever planning to make purchases from brick-and-mortar stores, according to the results of a study by Accenture. In the survey of 750 adult consumers, 21 percent of US shoppers revealed plans to increase their in-store purchasing, up from just 9 percent of shoppers last year. SDL, global customer experience management firm, reported that overall consumers preferred to purchase holiday presents in store (55 percent) over online (45 percent) last holiday season. Another study by Zendesk found that 75 percent of shoppers still prefer the experience of a brick and mortar store, to visiting an online store. The company attributes factors such as being able to touch and feel objects, or try on garments and having instant access to help from sales associates as some of the top reasons why shoppers prefer visiting a brick and mortar store.

There is also a certain appeal that some fashion retailers have been able to tap into by keeping their wares offline. For example, privately owned luxury label Chanel is considered to be one of the most coveted brands around the world. It is also one of the few fashion houses who chooses not to sell its clothing online. Although Chanel does have an online store in a handful of countries, it only offers its makeup, skincare and fragrances. The luxury French fashion house does have an online platform where it advertises its wares, but has chosen to keep its clothing lines limited to its exclusive stores on Bond Street and the Upper East Side. By doing so Chanel has been able to uphold its image as premium label that is only available at carefully selected locations. Chanel's president, Bruno Pavlovsky previously explained to BoF why the label would never sell its clothing online: "You need to be in the fitting room. You need to have a tailor who alters the clothes to fit exactly to your body...it's part of Chanel. It's more than just our service. It's part of our differentiation to have ready-to-wear that is perfect for our customers."

At the other end of the fashion spectrum there is another fashion brand which is currently flourishing around the world without the aid of a online store namely, Primark. Even though it was possible to order selected Primark items from online retailer Asos for a short period of time last year, Primark willfully chose not to extend its online venture with the fashion retailer after its twelve week trial period.

'The best way to get profitable growth is on the high street'

According to Asos CEO, Nick Roberts, Primark's online trial got off to a "phenomenal start". However Primark's finance director John Bason was quick to point out that although the trial had provided some interesting insight into online retailing, "the best way to get profitable growth is on the high street". Primark's low price point, combined with Asos free delivery and returns model within the UK, meant that it would be very difficult for an potential online store to remain profitable, commented Martin White, director of Primark's supply chain. Today, Primark remains firm in its belief that an online store would not work at the lower price end of the fashion retail spectrum, with the costs of returns, shipping, distributing and staff being too high to turn a profit. Instead the value fashion retailer is content with an online platform to stay connected with its customers and direct them to their nearest stores.

As Jamie Gufruend, chief strategy officer at the Intelligence Group recently highlighted during a discussion for CAA, "70 percent of consumers prefer a full experience, over a full product". In other words, consumers today are not looking to just buy products, they want to buy experiences. A study from Cornell University showed that consumers prefer experiences over products because the consumers are able to 'own' experiences, while material goods can only be 'possessed' and are subjected to wear and tear. So even though there are advances made in technology every day to help online companies to better communicate their brand image and collections to consumers, the physical experience of being able to touch and feel a product, the feeling of walking into a store and experiencing all it has to offer is something that has yet to be made available online. When it comes to offering a full brand experience, online stores still have some room to catch up to the brick-and-mortar store concepts.


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