25th October 2018
Amazon Q3 retail sales “surprisingly weak”
We’re now twenty years from the launch of internet retailing. But it’s had nothing like the effect on apparel buying the big 20th century revolutions did. Accident, problem – or an indication that transactional apparel websites might go the way of Concorde and the hovercraft?
In my January Rant, 20 years after Amazon launched, I’ve contrasted modern garment shoppers’ reluctance to buy clothing online with self service’s earlier near-instant destruction of counter service and offshore manufacturing’s even faster destruction of rich-world apparel factories. Comparisons pointed up by today’s reports of soaring sales from Primark – which famously doesn’t inflate its operating costs by including a transactional website.
There’s no questioning the fact that all major garment retailers have to use the web to communicate with customers – but there’s equally no doubt that mass market garment retailers and brands operating a transactional website or home delivery have added far more costs than they’ve recouped through higher sales. There’s also no doubt predictions about the web eliminating bricks and mortar apparel retail look as naive as 1950s predictions we’d be living off pills and flying everywhere in supersonic planes by now.
It’s apparently Luddite Primark that’s gaining share right now, while its technophile competitors are having to explain away disappointing sales.
I’m not arguing that the web is irrelevant to garment retailing. Indeed, part of my argument is that, by making price comparison easy, it’s helping drive retail prices down. So it’s too relevant for many retailers’ and brands’ comfort.
I’m simply arguing that the real effect of the web, after 20 years of limited apparel sales through it, is beginning to look more like a cost firms have to manage down than a revolutionary business opportunity that will drive those reluctant to buy into its pretensions out of business.