Over the past decade or more we’ve heard the cries that retail is dead and that it was no longer accurate to say that the future of retail was online and in e-commerce, but that it was the here and now. After the last year or more of the different lockdowns, social distancing in retail environments and the pressures that COVID-19 has brought on the retail sector as a whole, we might now be finally at that tipping point where traditional high-street retail is dead.
There has been a raft of big changes from traditional giants in retail, with Gap announcing that all of its stores in UK and Ireland will be closing later this year and ASOS and Boohoo in complete control of mainstream fashion, so e-commerce is more important than ever before.
Retail is not dead, but it has definitely shifted to an e-commerce footing as the primary focus for retailers and the most popular way for shoppers to buy products.
Gap closing its physical retail stores
The announcement that Gap is to close all of its 81 stores across the UK and Ireland by the end of the year is shocking in that there hasn’t been that much shock about the news. It really highlights how the retail economy has shifted in recent years towards online retail and e-commerce platforms. The US giant will continue to operate online in this region and plans to sell its stores in Italy and France too after a strategic review of how the business was functioning in Europe. A success in the UK since first coming to these shores in 1987, Gap is now an online-retailer, so what happened?
Gap didn’t adapt – In recent years Gap just stopped keeping up with fashion trends and mainstream tastes, and after years of standing still this negative approach has finally caught up with the retailer and caused massive problems. Gap offers neither interesting fashion and choice or the lower prices of big competitors such as Primark, which dominates the physical high-street (and is a rare success as a big brand without an online store).
No genuine online presence – Gap never truly invested enough money into its online operations. It could and should have been an early adopter of the digital landscape and reached out to customers through online sources. It could have positioned itself as a retailer that combined physical and online well. Instead, it stood still and never changed.
Too many physical stores – The problem that Gap faced, especially since the beginning of 2020 and the lockdowns the UK and Ireland have had to deal with, was that it just had too many stores to remain financially viable. If it had adopted an effective online presence earlier, it could have had more success with a blended approach to both high street and online retailer, but it wasn’t to be.
What all this means is that even though Gap are now moving to online-only, this in itself is no guarantee of success as it is coming from a poor position. The market doesn’t currently think of Gap when it thinks of buying clothes online, so there is a long way to go to become a success story online. Competitors such as Next have cornered the market when it comes to snaring the right customer profile for Gap and it will be tough to reposition itself successfully.
ASOS and Boohoo controlling the high street
Retail giants of the past, like Gap, have been left behind by those forward-thinking retailers such as ASOS and Boohoo, that have made a massive mark in the digital landscape of retail and are now in a position to rescue some of the traditional UK brands that have struggled in recent times, such as Topshop and Debenhams. Boohoo has announced that it is buying the Debenham’s brand for £55 million, whilst ASOS is in talks to buy the Topshop brand and other labels that come under Philip Green’s Arcadia Group Ltd. This does not necessarily mean that physical stores will remain or reopen for these brands, but rather that they will be transformed into online-only outlets and make the most of the experience and know-how of these amazing online brands.
The Boohoo modern digital success story
Boohoo is one of the pioneers of ultra-fast fashion retail, driving trends and reaching out to a growing customer base primarily through its social media platforms and complemented by a marketing strategy that is focused on Gen Z. Instead of opening new physical stores in different locations, Boohoo decided to have a marketing presence everywhere, on advertising boards across towns and cities, on TV and radio adverts, on social media platforms and with an extensive digital marketing campaign approach. The Instagram and TikTok generation don’t respond in the same way to marketing as the generations before them, and Boohoo has managed to lock in and make a splash with carefully thought-out collaborations with influencers and celebrities.
The ASOS e-commerce behemoth
ASOS is a famous e-commerce retailer the world over, selling its own line of clothing and accessories alongside over 850 other brand names. It is a global fashion destination targeting 20-somethings and has become a giant in e-commerce for a number of reasons. With free shipping and free returns ASOS has made the customer journey a stress-free one, which means a lot when building loyalty. It has scaled globally with a localisation focus, efficient distribution and a customer-centric approach to everything that it does. ASOS is inventive, always looks to improve its technology and seriously makes the most of the Gen Z market and the way it markets itself on social media.
It is clear that e-commerce is the here and now, not the future. The success of Boohoo and ASOS and how these giants of e-commerce have built such a strong position that they can now rescue brand-names traditionally seen on the high street, tells you everything you need to know about modern retail. Modern retail is primarily online and can be a combination of both physical stores and an online presence, but the high street as we knew it twenty years ago is not coming back. If you are planning to open a retail business, always focus on where you can make the biggest impact online to grow your brand before even thinking about a physical store.
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