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EDITORIAL Putting the failure of Arcadia Group and Debenhams in a multichannel context

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EDITORIAL Putting the failure of Arcadia Group and Debenhams in a multichannel context

In today’s InternetRetailing we’re reporting on a grim day for UK retail. More than 25,000 jobs are now at risk following the administration of Arcadia Group and the decision by Debenhams’ administrators to wind down the business following the end of discussions with JD Sports that might have led to its acquisition.

 

Covid-19 has undoubtedly been the final straw for both businesses, as lockdowns forced both to close stores for extended periods of times, and as office workers more often worked from home rather than in city centres where both have their stores. But both were also businesses with extensive store networks that are no longer as relevant as they were in the 1980s and 1990s, when these businesses really were the backbone of shopping centres and the high street. Both were struggling to stay relevant in a new retail order in which well-designed ecommerce capabilities mean that retailers don’t generally need as much space as they once did. And both struggled to bridge that gap online.


That’s not at all to say that stores don’t still deserve their position at the heart of modern multichannel retail. Today we report as Topps Tiles says that its 342 stores mean it is well-placed to be near the 90% of its customers who visit a shop at some point in their customer journey. Its strong online capabilities meant that it was also well-placed when online sales grew threefold during the national Covid-19 lockdown in the spring. This is a retailer that has invested in digital and that has been able to balance its online ability against a physical store network, with both parts contributing to a multichannel customer experience. The model has been shown over the years to deliver higher revenue than single channel businesses – whether that channel is online or store-only, and its noticeable that in our RetailX Top500 research, the leading retailers are almost all multichannel with few pureplays – with the notable exception of Amazon – able to compete at the same level.

 

Today we also report on John Lewis as it ends its international strategy – and stops delivering online orders abroad, on DHL as it expands its capacity in response to the strong ecommerce growth of recent months, and we continue to monitor Peak trading 2020.

 

In today’s guest comment, Tido Carriero of Segment considers how brands can harness customer data to help them sell direct to consumers.

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