“Primark has long been reluctant to launch on e-commerce. However, when it recently announced that it was in the midst of building a customer-facing website, which will showcase 80 per cent of its range, this sparked a lot of speculation as to what this move could mean for the brick-and-mortar fashion retailer’s business model.
“Primark has shied away from e-commerce for so long that the challenge in launching a credible service has grown exponentially over time. Its major high street competitors such as Inditex experienced online sales surging by as much as 67 per cent in Q1 2021, while online pure players like Shein are now worth £21 billion. With this in mind, it is inevitable that the future for Primark’s success could be online, as consumers continue to shift to this channel and the high street continues to suffer.
“However, for Primark – which has limited experience in e-commerce – getting its online offering right will be hard. The scale of what they have to deliver, even as a new service, is immense if it wants to compete with its digital rivals who have spent years creating a formidable online presence.
“Primark’s first step seems to be launching its full catalogue online. This has led industry analysts to speculate that this could develop into a click-and-collect service, where customers will need to travel in-store to collect their items. On the surface this seems like a logical strategy as Primark would have the best of both worlds and use online to still encourage traffic into its stores. However, delve deeper and it is quickly apparent that these advantages may come at significant risk.
Best steps forward
“We cannot ignore Primark’s lack of tech experience – it is likely to take a lot of trial and error to get its processes right. This can put a strain on services and expectations and is a major issue if they fail to fall in line with the high service levels and rapid efficiency of its competitors.
“When building its online infrastructure, Primark needs to focus on delivering an online channel that fits as seamlessly as possible into its business architecture and this will require a strong understanding of it and its many nuances. The essence here is that any new platform will need to be flexible and extensible enough to adapt to the needs of the business, and not the other way around. This is easiest using an Open Source approach, which ensures that the underlying platform is not set in stone. This also ensures that its workflows and features can be moulded around business requirements, where additional functionality can be easily developed where necessary. It is entirely fueled by the widest possible community of technology experts to ensure true strategic flexibility.
“To succeed online Primark also needs to harness its strengths. It has become a well-known brand for shoppers due to its budget price points and has therefore built a loyal following with Brits over the years – as demonstrated by the queues outside its stores up and down the country once lockdown restrictions eased. With this kind of brand recognition and the compelling “Sell Event” it creates through limited production runs and “Get It Before It’s Gone” messaging, these first steps into full e-commerce can be different to a normal brand.
“If Primark wants to migrate to the digital world, it should harness this loyalty and propensity to buy by doing something different – like launching a VIP customer site that gives good customers the first view of new lines. This would reward loyal customers and provide a mystery of exclusivity to it. There might also be the potential of making it subscription based further down the line, if the demand is there. This would be a smart move commercially as it will help them identify and retain their best customers and deal with the low cost business model issues. It would also be manageable in terms of scale – in the medium term at least – while they find their footing in the digital space. It would also have the advantage of avoiding the chaos across their store network that could be caused by trying to implement a click-and-collect function. Click-and-collect requires not only a much higher level of sophistication than a basic e-commerce infrastructure can offer, but also requires significant amounts of store staff to retrain, and requires the redesign of store processes, to deliver a credible service. This level of change management is not for the faint-hearted, nor for the technically inexperienced.
“The future for Primark is online, but the competition is tough and getting there will not be simple, due to its current lack of digital experience and the sheer scale that its online competitors have operated at over the last few years (and that its brand status would require). However, with the right strategy in place, and a focus on flexibility, it has the potential to truly excel and create an online platform that can take serious online market share away from its competitors.”