Tuesday, January 13, 2009

Online sales rip High Street to shreds

The figures are gradually emerging for retail performance in Q4 2008 and high street sales figures are a bit of a mixed bag, some stores have generated increases (against the trend), some have suffered small losses but the overall trend of high street sales is down, down, deeper and down and so doom and gloom - gloom and doom is forecast for the economy.

However, this is a little like a soccer player taking their eye off the ball. Retails sales are now just one part of the equation - year on year online sales have shown massive growth IRO 30-50% year on year for the past 5 years and estimated to be 30% for Q4 2008. This has to be migration and cannibalisation from the high street. I know that I don't have any more money to spend, and neither do most of the people I know so (in the main) this is not new business. 

No matter who you believe (the British Retail Consortium state just 5% of retail spend is online whilst Interactive Media in Retail Group reckon that is's closer to 15%) there is a vast migration to the online shopping environment and if it is cannibalisation then someone has to get hurt - and it's the high street that suffers.

Or does it. A recent report from Nielsen Online (PDF summary here) shows that with the exception of Amazon (who top their table of the most popular UK online retailers in Q4 with 15.6m visitors +18% on 2007) and Play.com who come in at 4th place with a 35% increase in visitors to 5.7m all of the rest of the top 10 are established high street players - Argos (+32%), Tesco (+15%), M&S (+46%), Littlewoods (+66%), Currys (+35%), Asda (+53%), John Lewis (+31%) and Next (+38%).

This is simply further vindication of the move to an online environment.  Why would anyone torture themselves  by fighting the traffic, playing "hunt the parking space", digging out the change from your pocket to feed the parking machines (why can't towns be enlightened and provide the option of SMS payment or cash) and then braving the crowds in the high street to trudge from shop to shop comparing prices, checking availability and finally purchasing. Only to have to lug it all the way back to the car and then to start all over. 

WHY would anyone put themselves through this torture when you can do it from home (or the office), shopping when YOU want to, not when the stores feel like opening and as a nocturnal web dweller this is a REAL benefit.

You have access to ALL of the stores, not just those that have a presence in your nearest town, you can instantly compare prices and availability. Hunt for discounts and cashback deals, place your order and just sit back and wait for the delivery vans to start turning up.

So, the simple message is - if you can sell your products or services online then you HAVE to. If you fail to realise this, your customer base will be leached away by more enlightened businesses and I can't believe that I am still pushing this same message years after online trading became a viable option for ALL traders.

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posted by andy @ 9:17 PM 0 comments

Monday, November 24, 2008

Public Wi-fi - Value add or revenue generator?+

Was at a hotel in the Midlands earlier. I won't mention their name because that would be like free marketing for them and I don't really want to do that. However, they are a 4 star hotel located just off the M69 and A5.

Great location, from what I saw of the hotel, it looks OK (in a corporate kind of manner) but, imagine my surprise when I opened my laptop and wanted to access Wi-Fi. £6.99 for an hour something around the £20 mark for an all day connection.

When will a business learn that Wi-Fi is a Value Add NOT a revenue stream. I was hampered by the fact there was no Orange or Vodaphone 3G signal so 3G was out.....so I decided not to go online AND I certainly won't recommend the hotel as a meeting point. Simply extortionate rates. 

I now realise that I was less than a mile from a McDonalds and their Wi-Fi is FREE. See, Mikey Ds understands Value Add - coffee for around a pound (and it's pretty good coffee too) and free Wi-Fi compared to coffee at over £2.00 (probably) and no free Wi-Fi.

Heck, a couple of miles further up the road and I'd have found a J.D Wetherspoons pub. Good coffee, soft drinks, reasonable prices and free Wi-Fi. Someone else that understands Value Add rather than Revenue Stream. 

Hmmm.....both the latter outlets are aimed at the general public, I suspect that my location was business person focused (read Expense Account).....wonder whether things will change in the credit crunch

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posted by andy @ 9:31 PM 0 comments