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IREU Top500 The Customer Report: 2018

IREU Top500 The Customer Report: 2018

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From House of Fraser to Jacques Vert: how traditional retailers are suffering as shoppers move further online

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Shoppers are buying more from mobile phones
Shoppers are buying more from mobile phones

Today’s InternetRetailing newsletter is bookended by news of retailers challenged by a difficult trading environment. We report both on Jacques Vert owner Calvetron Brands as it goes into administration, and on internetretailing.net/strategy-and-innovation/strategy-and-innovation/house-of-fraser-looks-to-close-stores-as-it-moves-into-new-ownership-17626">House of Fraser as it looks to reengineer its store estate, closing stores where necessary, in the light of changing shopper behaviour. The two stories are linked: Jacques Vert and its sister brands, Dash, Eastex and Précis, trade through concession in stores operated by retailers including House of Fraser.

 

Both are challenged in particular by the faster pace at which department stores’ sales are moving online. In March alone, as shoppers spent 13.3% more online, their internet spending with department stores grew by 33%, according to ONS figures. When they were new, department stores must have proved highly convenient, as they brought shopping for a range of items into one large space. Now shoppers are perhaps finding it still more convenient to buy that same range of items from department stores online, rather than coming into the shop, raising questions about how the sector now uses all that expensive store space. These questions are being answered with interesting solutions: John Lewis has focused on services, and Debenhams on the new idea of social shopping. Nonetheless, it’s a market in which retailers that are weighed down with "legacy issues" that keep costs high, as it seems was the case for Calvetron Brands, are struggling to survive.

 

That wider retail environment is amply illustrated in the figures we also cover today, from both the BRC-Google Online Retail Monitor and Salesforce Shopping Index for the first quarter, that show customers increasingly moving to browse and buy via their smartphones. We also cover research that suggests internetretailing.net/marketplaces/marketplaces/fashion-retailers-can-breathe-easy--amazon-isnt-trendy-yet-17632">Amazon’s fashion offering is not yet seen as fashionable – news that may mean short term respite for other retailers in the sector, but suggests Amazon may offer still greater competition in the future.


What are other retailers doing to improve on their positions? Today we report as Pets at Home uses machine-learning to improve the way it uses its store space, while today’s guest comment comes from David Buckingham of Ecrebo, who considers what a focus on in-store loyalty could mean for retailers.

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