Not so long ago some sales pundits were confidently predicting the demise of bricks-and-mortar retail outlets facing the global onslaught of online purchasing.
Yet the association between one of the biggest online retailers and a UK household name in High Street sales has cast doubt on the assumption that the future of retail sales belongs solely to the digital world. When SI reported the tie-up between ebay and Argos last autumn we also quoted Dr Scott Dacko, associate professor of marketing and strategic management at Warwick Business School, who claimed the move was a ‘win-win’ for both parties.
Dacko said: “Whether this exact set-up is going to be the model or not, the integration in online and offline sales is the future for retail.”
So SI went to meet Dacko at Warwick University to find out more of his thoughts on how this sales model may be rolled out to other seemingly rival retail organisations.
Dacko was quick to point out that the driving motivation for these types of associations would probably come, initially at least, from the traditional ‘brick’ retailer seeking to stem the flood of customers away from their High Street outlets.
He told us: “It’s a case where bricks-and-mortar retailers have seen sales either decline or stay flat and not rise at the rate that they had hoped, and they ask why.
“More people are shopping online, that is clear and with more people shopping online it may have the effect of taking away their sales. In the case of Argos, fewer people were coming into their stores.
“Argos is quite progressive in saying ‘we’re going to do away with our catalogue and increasingly go digital’ and yet they have space in their back room for boxes and products. It seems fairly logical that, with that space, to say ‘well, let’s learn from a process where we are not just a retail with a store but more, and more online’.
“It’s an alliance where they are learning about logistics, they are learning about demand and I think this really is a win, win, win situation. Win from both retailers and their customers. Customers want convenience, they want speed and more people, when they shop, it’s not just what’s at the local store it’s, ‘what do I see online?’”
Dacko referred to his own personal shopping experience to highlight this trend.
“Say, for instance,” he continued, “it’s a retailer in Hong Kong, and recently I ordered myself a little connector for my DVD player and found one in Hong Kong that cost £1.99 with £1 shipping and the same connector at a High Street store was £12 and I received the connector in just three days.
“When you consider that a shopper in the UK now says ‘let’s look online’ and they find it on ebay and in a few clicks it’s delivered and meeting their need. With this association, that shopper now would consider going to Argos and looking at their website.”
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