Is Primark off the mark with online retail

Is Primark off the mark with online retail

Post by Expandly on 19th November 2019

Tags:

Direct to consumer

,

Enterprise

,

Retail

,

It’s a bold move in today’s internet-driven world to ask your customers not to buy your products online. But that’s exactly what affordable retailer Primark did last month, in a tweet that went viral. 

At the beginning of October, customers were alight with glee as it emerged that Primark products were available on Amazon and eligible for next-day Prime delivery. But as customers flocked to the online marketplace and rejoiced at the idea of buying their Christmas haul from the comfort of their sofa, Primark stepped in.

“We do not have a commercial partnership with Amazon and any Primark products which appear on the site are being re-sold by third parties, at higher prices. We encourage our customers to visit us in our stores to find the best value.”

Primark Tweet
The internet wasn’t happy.

GIF image of people talking about Primark's tweet

And became even less so when Primark confirmed that: “An online shop is currently not in planning.” But why?

Why Primark encouraged customers not to buy online

Despite displaying a wide variety of products on Primark.com, Primark does not sell directly online, anywhere. The products appearing on Amazon and eBay are being sold by third-party sellers; sellers that Primarks wants its customers to stay away from. Why?

Brand control

Primark has spent years developing a brand centred around value and choice. From coats and boots to houseware and makeup, the stores are jammed with products that come with an extremely low price tag. However, the limited range of products on Amazon are being sold at a markup as high as 75%, which completely diminishes Primark’s USPs of affordability and choice.

Profits

While third-party sellers might argue that Primark isn’t missing because they have already paid full price for the item in-store, the reality is different. Anyone who has ever visited Primark for one item knows that you walk away with ten. By allowing customers to buy online, third-party sellers prevent Primark from being able to cross-sell and upsell in store.

Relationships

And finally, third-party Amazon sales prevent Primark from owning the customer relationship. They have no control over communications, branding, shipping, or customer service. This could result in a negative experience that damages the Primark brand, or even a positive experience that prevents the customer from shopping in-store in the future.

And, Primark is not alone when it comes to fearing third-party sellers. Apple, Nike and Calvin Klein have all taken moves to dissuade customers from buying their products from third-party sellers. But, rather than simply saying “don’t”, they have provided internet-hungry customers to option to buy directly from them online, by selling products themselves through Amazon.

Has Primark missed a trick?

The initial figures suggest not. Following a resilient year, Primark has just announced the opening of 19 new stores over the next 12 months, adding one million square foot of additional selling space. And, according to finance director John Bason, “The cost to support home delivery can’t be supported by our price points.” But what does the future hold?

Ecommerce sales already represent 22.3% of total retail sales – a figure that’s expected to increase to 27.9% by 2023. At Expandly, we’ve seen a notable increase in retailers looking to enhance their online presence and brands looking to sell direct to consumer, using eCommerce software, fast shipping strategies and 3PLs to help.

It’s certainly possible for Primark to build a successful ecommerce operation and, going by the customer delight of their products appearing on Amazon and the willingness to spend more than double the retail price, the market is certainly there. Whether Primark gives into peer pressure or makes a success of high street-only retail, we’ll just have to wait and see.

If you’d like to discuss taking your brand online, speak to our enterprise team today about the integrations, software and fulfilment to make it a success ([email protected])