In today’s InternetRetailing newsletter we’re reporting as some retailers are succeeding in generating as many if not more sales online during a period when shops have been closed. Seasalt, for example, says 67% of its sales are now from online, and it expects ecommerce to be its dominant channel even after the pandemic. Hotel Chocolat and AO both report strong growth in sales during the pandemic. Both say flexible business models have helped them to expand ecommerce fast in recent months. Hotel Chocolat has flexed its multichannel model while AO has expanded its ecommerce distribution fast. Dunelm, which as we reported last week has seen click and collect replace 30% sales lost through closed stores, has now rolled out ’deliver to car’ at 170 superstores.
These retailers were well-placed to respond to Covid not only because they had strong ecommerce systems to start with, but also because demand in their categories was strong. Even though Seasalt is a fashion retailer, it sells a more relaxed style of clothing that has been in demand as more people work from home.
Others have been less fortunate.
Value fashion retailer Matalan has seen its half-year sales fall by 34% despite an 84% rise in online sales that followed investment in online capacity and in ship from store.
Superdry’s online sales have grown by 50% to account for half of its sales – but higher costs meant first half sales remained in the red. It is now prioritising online and sustainability in its search for growth. And, regardless of how quickly sales grow, Covid-19 will bring high costs for retailers in all categories, whether that’s through falling sales or the cost of expanding capacity and distribution. When those higher costs are as a result of investment in online and in expanded logistics, the hope is that will leave retailers better placed for a future in which it seems likely that shoppers will be more inclined to buy online.
Today’s guest comment comes from Katie Kelly of Speero, who considers the retention economy – and how retailers can win in it. And in our round-up of other news we report as Moonpig plans to float, on the rising cost of VAT to small businesses selling online, on falling footfall and on how Hammerson is seeing its footfall and rent collection develop.