Consumer demand lures yet more reluctant retailers online

Both Poundland and Aldi have recently announced plans for launches of online stores after much deliberation and questions over whether the channel stacks up financially for value retailers. And Lidl has also been talking of making the plunge.

The argument for going online continues to ratchet-up because every bit of research you care to read highlights that consumers are increasingly demanding a multi-channel proposition from the retailers they choose to spend their money with.

To control costs and keep things manageable both Poundland and Aldi are taking their online approaches very cautiously. The former is charging a fee of £4 for orders below £50 (free above this level) and delivery is a relaxed four-to-five working days. And with just a modest 2,000 lines available the company is not exactly looking to stretch itself too much.

Likewise with Aldi – its website will go live in early 2016 – where the offer will initially comprise only cases of wine. The proposition will then be extended in the spring to include non-food special buys. The goods will then either be delivered to the customers’ home or via click & collect from third-party locations.

Both these companies have been highly successful with their stores-only policies to date but they know the benefits that online can provide, including broadening the reach to customers that are not located near a store. And there is also the appeal that home delivery has for people who are simply too busy to be able to make it to the stores.

Poundland and Aldi both continue to push into ever more affluent demographic groups and providing an online proposition will do them no disservice whatsoever in further fuelling this objective. What they will both want to avoid like the plague though is for online to add costs and complexity thereby compromising their slick highly cost-conscious models and deviating them from their coherent value-focused thinking.

The risk of this might well be part of the reluctance of Primark to push the button on selling online. It continues to stick resolutely to its stores-only strategy as evidenced by its recent move into the US where it has opened its first outlet (in Boston). But there is no online representation to help it push out its proposition to a greater base of customers beyond just those that live within a drive-able distance of the store.

Poundland and Aldi have committed, and it looks like Lidl is wavering too, so how long can it really be before Primark joins the rest of us in the digital world?

Glynn Davis, editor, Retail Insider

K3 Retail deliver multi-channel solutions that enable retailers to create joined up shopping experiences for their customers whether they choose to buy on-line, direct, in-store or via mobile. It has over 20 years’ experience delivering award winning solutions, to more than 175 internationally recognised retail brands.