Unlike pretty much all of its fast fashion rivals, Primark has long resisted selling products online.
Even in the wake of a worldwide pandemic and enforced store closures, the retail giant stood firm. But last year, to the delight of shoppers across the nation, Primark revealed it would finally start selling clothes online via its new click-and-collect service.
At the time, chief executive Paul Marchant said the move was “all about supporting and complementing our stores, which will always be at the heart of our business”.
The retailer expanded the trial to cover Greater London last autumn and brought womenswear into the mix ,following the success of its initial 25 store trial on kidswear across the North West and Wales. Last month Marchant told the Live 2024 attendees that it would roll-out the trial to further stores, with the possibility of launching the service to markets outside Britain.
But what’s next for the fashion giant online?
Primark’s online journey so far
Currently, the retailer is trialling click-and-collect across 57 stores, for its womenswear and kidswear products.
Despite being slow off the blocks, retail technology publisher and consultant Miya Knights says “everything Primark has done online so far has been sensible”.
She says the retailer’s gradual extension to its largest category of womenswear via a limited number allows Primark to test and learn, then iterate and optimise quickly while minimising its exposure to risk.
Carina Perkins, senior analyst for retail and ecommerce at Emarketer, echoes Knights: “Primark’s strategy so far makes perfect sense”.
Perkins adds that by offering click-and-collect, Primark can avoid the cost and complexity associated with home delivery, which put it off taking the step online for so long.
Ecommerce strategist and consultant, former eBay exec Vinny O’Brien, says that Primark’s resistance to move online, even during the pandemic, was due to difficulties with making its ecommerce operations viable.
Back in 2014, when online retailers such as Asos were soaring, John Bason, finance director of Primark owner Associated British Food – who now heads up its strategic advisory board, was honest about the challenge it faces online.
“Look at a £2 T-shirt. Everyone think it’s clickety-click but one third of clothes get returned,” he told The Mirror. “That means someone has to pick it up, someone has to deliver it, someone in the store has to take it back, refold it. It doesn’t work at the lower price point.”
O’Brien agrees that the market is a challenging one for fashion retailers to navigate. “When we look at ecommerce in general, particularly in fast fashion, we see almost all parties experiencing challenges in delivering profitability. Primark has looked at a smart, controlled way to bring online to their customers. Curated product with a strong service call to come in store.”
The ecommerce consultant agrees with Bason’s assertion all those years ago that a full-on ecommerce experience would have “raised returns rates, created a logistical challenge on inventory distribution, and crucially, not suited its agile approach to product development and design”.
The reliance on click-and-collect also drives footfall into store and gives shoppers the opportunity to make further impulse purchases while collecting items.
O’Brien adds that Primark’s model means that shoppers are not bound to the same stock as in store, and widens the range for those that live close to smaller provincial stores. He even suggests that the retailer could do click-and-collect exclusive collections to drive shoppers to use online.
The next steps for Primark online
As Primark looks to extend its click-and-collect trial, Perkins suggests that more stores and categories could be added in the future.
But she believes that the retailer will “continue to take a cautious, test-and-learn approach”.
Knights agrees and says the pace of roll-out will be “aligned to Primark’s risk profile”.
“Judging by its speed to market online so far, I doubt we’ll see the service extended to nationwide coverage or its full range before the end of next year.”
But while click-and-collect undoubtably has lots of benefits for customers, Perkins stresses that it can also have a knock-on impact on stores, and it can add additional costs.
“Primark will want to analyse the data it has so far before rolling it out more extensively.”
Despite a demand from consumers, home delivery is unlikely to be on the cards any time soon. Marchant insisted at the Live 2024 conference that it still did not make sense for the brand financially, due to its low average selling price and costs of fulfillment.
“There’s no reason Primark can’t be the Amazon of fashion”
George Weston, the chief executive of Primark owner Associated British Foods, has also been firm, telling The Sun late last year that while more lines could be added to its click-and-collect: “We will never do home delivery, and never do it on the full range.”
Perkins agrees that Primark’ is “probably the right strategy for now,” adding that fulfilling home delivery orders is complex and expensive, especially when you factor in the cost of returns.
“Primark operates on low margins to keep its price points so low. It might struggle to make home delivery profitable unless people were ordering large baskets online.”
However, Knights calls the decision “shorted-sighted”. She insists that if the minimum order threshold for delivery is high enough – something that a brand as popular as Primark can surely afford to do – and it can orchestrate its last-mile fulfilment from stores with maximum efficiency, “there’s no reason Primark can’t be the Amazon of fashion”.
The future
Perkins believes that despite Primark’s continued growth from its stores, it needs to invest in digital if it wants to maintain this momentum in the future, particularly as Gen Z gains more purchasing power.
Although she says that doesn’t necessarily mean it needs to launch home delivery, for as much as Gen Z shoppers like to browse online, they still enjoy visiting stores.
In the short term, Perkins predicts that alongside rolling out its click-and-collect capabilities, Primark will likely experiment more with digital marketing and building on its social media presence. Longer term, she could see the fashion giant launching a digital loyalty programme, which would help build engagement by giving customers a more personalised experience.
O’Brien agrees that loyalty should be a focus online.
“It is a retailer with a unique and loyal customer base that would support a good retention and rewards programme. Frequency of purchase is high enough and the basket size lends itself well to this,” he says.
Exclusive access for members, member-only collections and unique shopping events could all be possible, he says.
However, O’Brien does not believe Primark needs to bet the bank on online as it still has other growth opportunities to go for. “Its network is not overstretched, as with so many other UK retailers,” he points out.
By contrast, Knights believes that Primark “absolutely needs to invest more online as convergence with offline stores is inevitable”.
“There’s certainly plenty of headroom in its main growth strategy, which is new international store openings”, however, she says maximising the full potential and competitive value of these stores “can only be realised by capitalising on the halo effect they bring online”.
“This in turn attracts omnichannel shoppers, who have the highest lifetime value, into the stores, creating a virtuous flywheel effect,” Knights adds.
While there is divided opinion about whether Primark now needs to pick up the pace with its ecommerce experiment, industry experts across the board have been impressed so far with its cautious yet unique approach to date.
If it can nail online like it has store-based retail, Primark’s growth prospects look stellar.
Click here to sign up to Retail Gazette‘s free daily email newsletter
