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EDITORIAL How Tesco, H&M and Matalan are moving further online in response to Covid-19

Image courtesy of H&M

n today’s InternetRetailing newsletter we’re reporting on how retailers from Tesco to H&M are responding to Covid-19 by moving their businesses further online. Tesco has doubled the size of its online business in the last three months as part of its costly response to Covid-19, while H&M had to turn online almost entirely while at one point close to 80% of its stores closed as result of lockdowns in its different markets. Matalan says it will be investing further online in response to shifting customer behaviour in recent months. 

While stores have been closed, many retailers have not been paying their rents and estimates this week suggest that less than 15% of rents were paid on time for quarter day. That’s having an impact on retail landlords. Today the Intu Group went into administration after failing to agree new terms for debt. 

But despite the recent growth of online, stores remain central to retail operations. Tesco may have doubled the size of its online operation – but even then it still accounts for only 16% of its retail sales, up from 9% previously, and stores still account for an implied 84% of its sales. 

Meanwhile, the lesson that H&M has taken from its store closures is not that it no longer needs stores – indeed it is currently planning to open 130 new shops – but that those stores need to be better integrated with its digital channels. That’s where its focus will be in the future. Matalan too says it will invest further in multichannel services in a way that makes it easier to use its stores to fulfil online orders – and to order online from the store. 

Pippa Wicks, the incoming executive director of John Lewis, is faced with similar challenges of finding a new role for stores at a time when more people are doing more of their shopping online. Like H&M, she’ll now have the added challenge of working out how to sell items such as clothing with social distancing measures in place. 

In today’s guest comment, Jay Patel of IMImobile considers how effective use of digital communication channels helps retailers support customers in a time of crisis

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