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EDITORIAL How multichannel retailers from Amazon to ScS are thinking about stores as sales fall online

In today’s InternetRetailing newsletter we’re reporting as Amazon reports falling online sales but in-store growth that beat expectations in the fourth quarter of its financial year. 

Amazon chief executive Andy Jassy points out in today’s figures that most retail sales still take place in stores, and predicts that its work on the customer experience in-store makes it well placed to benefit from significant growth. As yet, there’s a way to go, however, since online is so much bigger than stores in the business. But 

The update comes at a time when in the UK market, footfall and retail figures continue to show shoppers returning to stores in the wake of the pandemic but buying less online than they did during Covid-19 peaks. However, online sales still tend to be higher than they were before the pandemic. That’s the case in today’s BDO’s High Street Sales Tracker, which suggests strong growth in stores in January but below inflation growth online. 

Amazon is far from alone in seeing its online sales fall in the fourth quarter of the year. Swedish fashion retailer Nelly has also seen the effect of shoppers buying less online than during the pandemic and its immediate aftermath, reporting a drop of more than 4% in sales as well as a bottom-line loss. It puts this down to growing ‘consumer anxiety’ as well as inflation and pressure on prices. Today it says it’s planning to boost working capital for its continuing transformation programme that envisages returning to profitability by measures incluing cutting costs. 

Multichannel retailer ScS is hopeful as it reports an upturn in order numbers ahead of Christmas and in the opening weeks of its winter sale period. Nonetheless, its latest figures show its order numbers down by more than 4% in a half-year that saw it invest in both online and in-store expansion. 

Today we also report on PKF GM analysis of the latest ONS insolvency statistics, suggesting that business failures are running at their highest level for 13 years – with retail the second hardest hit sector. It’s a challenging time for retailers as they adjust away from pandemic-driven models, and in today’s timely guest comment, James Hyde of James and James Fulfilment outlines the importance of ecommerce retailers prioritising core operational issues in an economic downturn.

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