‘It ain’t easy ‘ ….Being an online retailer !

It is also the title of a David Bowie song from way back in the early 1970’s, way before the internet, but not door to door van deliveries. My ‘Old Mum’ used to give her greengrocer a written list and he delivered it to the front door a day later. And she was doing that in the sixties. No internet, no iffy broadband, no crashing web sites, no ‘out of battery‘ phones. Pen, paper, man in greengrocer and a green van ( colour that is, not in the slightest bit eco-friendly) . Simples as a wise Meerkat once said.

That Greengrocer eventually closed because of the rise of the supermarket. What do you make of that because my mother then had to drive to get her greengroceries. Now, it was not down to my mother that all independents closed, but there is some irony in that some consumers lost an element of convenience in the name of convenient shopping.

Race forward sixty years and we are back to delivering our purchases via a method somewhat more complex than pen and paper. Before the shout goes out about the Internet killing the retailer , unfair competition blah, blah, blah., lets just take a gander (Look for non native English speakers of whom I know there are a few , or at least one or two)over the last 18 months . With the various lockdowns throughout Covid, the retail environment would have been even more dire. Dare one say the emotional health of the nation would have been somewhat worse the wear, in that costumers were , when finances allowed, able to indulge in a huge variety of product, whether books ,puzzles, hobbies, household products, clothing , all product that was not essential but enabled a slightly better environment when you were confined to your own four walls.

So if we can make the case that all online operations are not all bad then I think it is only fair to look at the case as to why they should not get quite the bad press most of the media seems to give them .

Whilst these 2 Charts are from different sources and slightly different years , it helps to illustrate the way retail is moving

There are broadly 3 types of B2C operators

Those who sell on the market places eg Amazon, eBay & Etsy etc

Those that operate their own Web shops

The Third being those who operate on both

Let’s examine the the second ie those who trade via their own web shops.

Before doing that it is important to make thing clear about online operators , for the most part they do not operate on the High Street therefore their rent and rates will tend to be lower than a Bricks and mortar equivalent per square metre. There ends in my view their main economic cost benefit .

Basic Higher Costs for Web shop operators Vs Bricks and Mortar

1.Unit size tends to be much larger than equivalent bricks and mortar
2.Stock holding is likely to be much higher
3.Technology both hard and soft high cost of entry due to much greater demands on the systems
4.Greater number of SKUs-Independent brick and mortar (in Party) maybe 6000+ ,web shop more like 30,000+
5.Can take up to 30 minutes to load one new product onto a web shop (that is similar for the market places, if not more so)
6.Very high cost of marketing or web awareness. It would be no exaggeration to say this can be in 6 figures
7. High cost to maintain awareness
8. Cost to deliver (no cost to Bricks and mortar). Current major issue is a problem concerning shortages of drivers
9. High cost to maintaining customer loyalty (Since there is no face-to-face interaction like in a retail store, the development of trust and loyalty takes more time and effort in eCommerce)
10. Cost of returns (Over 60% of online shoppers look at a shop’s return policy before making a purchase.)
11. Cost to pick and pack
12. Increasing IT requirements such as data analysts

These are just some of the cost issues. Other barriers facing B2C e commerce platforms are (all involve cost at some point)

Online identity verification
Overall cyber security
Shopping Cart Abandonment (apparently this can amount to anything between 60-80% )

Many of these issues can be offset by using the market places such as Amazon & eBay. Yet these have their own pitfalls in terms of there is, of course a cost, pricing is very aggressive, you can be competing against a far bigger supply chain, and you are reliant upon the whims the platform you are using and subject to their rules.

Here’s a fascinating little fact

It takes about 50 milliseconds (that’s 0.05 seconds) for users to form an opinion about your website that determines whether they like your site or not, whether they’ll stay or leave.


and another …….

47% of Users expect a maximum of 2 seconds loading time for an average website


yet another ….

Users spend an average of 5.59 seconds looking at a website’s written content


Take the sum of these 3 stats and you are not looking 8 seconds in total. It takes that long to walk into a shop before you have begun to get an impression of what is on offer. That said there are some retailers where I have made a very precise decision not to enter in a fraction of that time , which will say loads about those particular shops.

The following diagram may also illustrate how being an online seller is not that straight forward. Show me a bricks and mortar retailer that is faced with any of these dilemmas.

Governments have talked much about taxing the ‘ so called‘ advantages of the online operators . There maybe an argument for the likes of Amazon, but for the rest it is taking a sledge hammer to crack a nut. There has never been an argument for additional taxation for the supermarkets .  Tesco & Sainsburys alone take over 42% of the market. Who had it before they existed (as supermarkets) ? The independent retailer . It is how retail evolves. The market place has to adapt as it always has. Nobody said it was going to be easy.

No Retailing is easy. It never has been, and it wont get any easier. It has to evolve to survive. There will always be the ‘naysayers’. Online is here to stay and so are good bricks and mortar retailers , we started with Bowie so I’ll finish with Ike & Tina Turner

Working together we can make a change

Working together we can help better things

Ike & Tina Turner 1970

Bit of a shame Ike didn’t think more about some of the words he sung , but that does not detract from the essence .

Has the Consumer gone Bonkers ?

Some may say most of their customers are bonkers and always have been . But the real question, but less attractive title is Has the consumer changed in the last eighteen months, (or since covid started in the West Feb 2020).

Again most would say Yes, but would have more difficulty quantifying those changes and whether they will last .

There has been a seismic change in what people are buying and how they are buying it. According to Selligent’s most recent consumer survey 60% consumers now focus on buying essential items and almost a third (29%) say their shopping behaviours have changed forever.

These changes have been largely driven by a change in employment, with 75% of global respondents reporting that they have less work. Despite the economy and jobs market recovering, conservative approaches to spending will have a lasting effect, making it more important for brands to cater to cost conscious customers in the long term.

MarketingTech Anne Jarry March 2021

Selligent is a Belgian company ,with offices throughout the world and is an intelligent omnichannel marketing cloud platform. So whilst having a Global perspective they specialize in something most have of us have never heard about (they have been going since 1990 for crying out loud). Therefore a Global perspective with very specific ideas, perhaps.

Consider some of the changes that have happened with consumer behaviour since March 2020.

  1. Dramatic increase in online shopping-Overall, online sales rose to a record high of 33.9% as a share of all retail spending-Office For National Statistics 2021

2. Increase in shopping local -People are shopping more with local brands, both for convenience and to support their community: 46% are shopping in closer neighbourhood stores and 80% feel more or as connected to their communities. Paypal US December 2020. However, I would suggest a similar pattern, certainly in the UK

3. Caution in spending – More of a do I really need that ….attitude. Will I be in a job tomorrow ?

4. Nearly 40% of consumers are likely to use touch-free payments via mobile devices or credit cards, avoiding cash and person-to-person exchanges and opting for more hygienic methods. Consumers across the globe also plan to continue using low-touch services like self-checkout. PayPal US

5. Delay in consideration of environmental issues- In 2020, Euromonitor found that 73% of professionals believe sustainability efforts are critical to success. Interestingly, environmental initiatives in particular were waylaid in 2020 as companies and consumers rapidly changed their behaviour in response to the unique circumstances created by COVID-19: 51% of professionals reported increased use of plastic packaging, and respondents also noted delays in recycling, waste reduction and green technology efforts. Feb 2021 Retail TouchPoints

6. Trying something new . Consumers are trying new brands and products for accessibility and curiosity. Almost 30% have reported picking up new hobbies during quarantine, prompting them to discover new brands they will continue to shop with in the future. In China, studies showed 28% of consumers switched to a new store for convenience and stock availability, and 47% of them do not intend to switch back after the pandemic. PayPal US. Not sure about the China example but there is plenty of subjective evidence to show many took up new hobbies. This has been illustrated within our own Party Market. A huge number of people (and in the US) in the UK took up Balloon decorating via watching YouTube videos (On Balloon decorating !).

7. Personal Care. Google searches for “No Poo” (meaning no shampoo) have more than doubled in the last six weeks, as consumers take this opportunity to stop washing their hair or use alternatives like apple cider vinegar. Inferring a decline in expenditure of personal care products.

8. Change in working practices . Less expenditure in city centre establishments as home working continues . More working from home also leads to increase spending locally.

I shall take each one of the changes individually.

  1. Well Holy Moley! Most shops were closed, you could only move one metre from your house, you had to go out blindfolded and gagged and online sales only went up 34%. Well what a surprise or rather its a surprise the number is not greater. That said the volume of food sales has dropped back (online) . That’s no surprise as we can go out now ! Of course it will have moved more to shopping online or rather hastened a changing pattern.
  2. Again , where else could we go ? I do, however, think good local independent local retailers will have benefitted from a shift here. As to how the working from home and the return from furlough will reduce this trend is anyone’s guess. But at least it has shown some that they do actually have some quite good shops under their noses.
  3. This is balanced against those who have done well out of lockdown ie those working from home , who have no commuting costs and not spent anything on holidays and going out.
  4. The increase touch free payment was already happening this however has accelerated it. The trend will continue .
  5. I don’t know .
  6. The consequence of this is yet to be defined as it to a degree it is on going and will continue for some tiome as shortages continue. If the consumer is happy with the ‘different brand’ then i suspect there will be some quite big changes or there will be a lot more competition amongst the big brands.
  7. Not convinced this will continue.
  8. A change has happened and it will be difficult ot reverse. That said I am not at all convinced it is going to quiet as seismic as some ‘experts predict’.

Now I’m not quite up to speed with Cloud nine, metaphysical data analysing and marketing platform capabilities but I think a lot of these had started well before Covid. What has happened is their development has been hastened during the pandemic.

Most consumers have always been a bit bonkers . The consumer is an ever changing beast and always has been . What any of us who have any involvement in the retail market have to do is ascertain how long the changes that have occurred will remain and how they may evolve into something else .

One of many confusing tables produced to show Consumer habits during Covid