New idea ….Shops!

AO one of our largest online retailers for home appliances has just announced whilst there are no immediate plans to open High street shops, it is an option they would consider.

This is nothing new . Or rather let me clarify, before a reader claims they once went into a shop, it is not new for an online operator to open or consider retail outlets. Both Google and EBay have had pop up shops and Argos, whilst not solely an online operator are probably the nearest, you currently get to a web site with shops.

A financial journalist recently said in five years time entrepreneurs will start opening things called shops. It was not said with tongue in cheek. Retailers, both on and off line are beginning to understand the importance of some representation on the high street. Richard Perks , retail director of Mintel, says about the future of retailing that ….setting them against each other is a red herring…it’s more about bringing them together.

The point I am trying to make is that online accounts for just under 12% of retail sales. Conversely, 88% of purchases, are made in shops. That 12% will continue to grow but for some time the vast majority of purchases will be made in retail outlets. The primary motivation for any business has to be profit, or else it does not survive. This is why it is so important that …retailers look at bringing them together…

If you look through photography magazines, you will invariably see  a story on ….Jonny Snapshot has been running his local camera shop for over 350 years, but has decided to close because ‘them, there Internet people….’it is a crying shame’, said a local..’we have had a camera shop in this town since the 16th century ‘…The point being that there is a relationship between camera party shops. Both rely on customer service. In my own experience, having an interest in photography, Customer service is not always as evident in some independents, as it should be.

If you were new to photography, you would find it very difficult to buy the right gear by just going online. If all camera shops disappeared, they would have to be re-invented. I believe the same is true of party shops. If this were not true, why would Party Delights, the U.K’s largest party web site, be involved in a new retail outlet. 

Online operators, of all varieties, are increasingly finding it difficult to operate successfully. There are issues with operating costs, maintaining customer loyalty, brand awareness and increased competition. Couriers are finding it increasingly difficult to make the delivery at first attempt. Second and third attempts increase dissatisfaction and increase costs.

Retail outlets without an online presence, will be severely hampered to maintain their business. Web sites without a high street presence are just as exposed. Retail analysts talk about consumers making store visits as a leisure as opposed to a purchasing activity.  As a consequence, major retailers are looking at ways they can incorporate all three, online, in shop and leisure all in one location. The theory is the longer time spent in a retailer, the more likely loyalty will grow. 

With some ‘out of the box’, ‘blue sky’  thinking, and some hard commercialism, the party shop should be the ideal retail outlet to incorporate these three fundamentals, in shop, online and leisure.

As a footnote, with Amazon dramatic share price increase, the company value exceeded Walmart, the worlds largest retailer. I find this, especially, interesting, as an Amazon buyer tried to convince me at the NEC, that they were not as big as TESCO. 

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