This week there have been many news articles relating to whether the retail store, Primark, has made a huge mistake in choosing to not expand into the online market. Similar to many other companies, these unprecedented times have meant Primark are not gaining any revenue over this period as they are unable to operate safely. Could an online presence benefit the business or is their existing business model effective?
It is clear that any store without an online presence will suffer financially through this pandemic as they are unable to generate revenue however as an overall strategy how effective is keeping all activity in store only? Primark is a high street store popular for their quick turnover of stock and their cheap prices.
If Primark chose to become an online supplier, they would need to pay hidden fees such as distributing and delivery fees. The business would most likely need to increase their product prices in order to cover these costs which may erode the little margin the business make on their products. The price of each product would increase but not the quality of each product which would hinder sales overall. It would also in turn eliminate the company’s unique selling point of ‘low cost affordable products’. Therefore, when observing the business plan financially, it does not currently correlate to an online setting.
The business have built up a strong brand and consumer base without splashing out on advertising and the proof is in the amount of customers that come into store. I have never seen a Primark empty! This suggests their current strategy and brand reputation works and the impression ‘if it is not broken why fix it?’ comes into play.
On the other hand however, the ‘fast fashion’ industry is consistently expanding and eliminating the ‘in store’ shopping experience all together. Many companies are suffering and heading towards administration as many customers now prefer the convenience of shopping in their own home and have the means to do so. Primark’s online retail competitors, such as Pretty Little Thing and Boohoo, are extremely popular due to their strong social media presence and ability to keep products to an affordable price. Therefore, it could be argued Primark’s existing business plan needs to be adapted to the modern shopping experience.
Primark would still maintain their loyal customer base if they chose to expand online but does the model fit and would it be worth the added costs? Leave your opinions and comments below! The future of many businesses at the moment depend on how they stood financially before the pandemic and such figures are hard to determine. From a customers perspective, Primark is an extremely successful brand and I hope to see the business return and renew financially after this is over whether it be through online settings or in store.
Thank you for reading! Rach x