26


Future of Retail — In-Store Technology


issue 06


to go alongside Everything5Pounds.com but Kulawik is being cautious because he recognises that “if we diversify then we will need to consider returns”. With the present low £5 cost per item, very few


people can be bothered to return their purchases, he says, but if the price point were to change for other categories for typed of goods then he suggests “we sell seven million items a year so if 50% are returned it would be a right headache”.


STILL STICKING WITH JUST BRICKS AND MORTAR This is certainly one of the big issues for online- only retailers and is something that David Hordle, chief executive of Morleys Stores, knows he would have to take into account when he makes the plunge and takes his department store business online. This is why he expects to initially rely on click and collect for fulfilling online orders. However, for now he is more than content


to be a stores-based retailer with nine units – predominantly in London – as he recognises that there is more growth to be had from expanding the number of stores without having to deal with issues that online inevitably presents. “We opened a store in Newbury and


recently in Bexleyheath and our like-for-likes are growing so we’re after further acquisitions and are looking at these opportunities. We have no imminent plans for online. Although it’s not an ‘if’, it’s a ‘when’ it will not be in the next 12 months. Click and collect will be our route from the start. We’ve seen lessons learned from our independent [retailer] colleagues,” says Hordle.


COST OF DOING BUSINESS ONLINE Ken Daly, chief executive of JML, says there is this “perception that it is easy to make money online” but there are lots of creative and marketing costs involved – among other things. This includes advertising as these businesses do not have the benefit of stores to give them a presence in the market. Many of them choose the medium of TV as it is more effective than digital routes – even though the market has become very fragmented. Daly is well aware of the cost of TV


“Going back to the high street would be an operational headache. I can instead see us expanding online into Central Europe, the Balkans, US and Australia, which are all opportunities.”


Robert Kulawik, chief operating officer of Everything5Pounds.com


advertising as JML is a big buyer of ads during the daytime for its products that are sold across various channels – with 80% via UK retailers such as the major supermarkets and 20% direct to the customer, mainly through the online channel.


CHANGING THE OFFER What all three retailers recognise today is the need to constantly change their offers. This is inherent in the proposition of Everything5Pounds where Kulawik constantly purchases end-of-line, cancelled and out-of-season lines but for Hordle it involves ensuring the brand mix – and the overall proposition - remains relevant for the local market – by switching things around. “You need the right mix of brand and


environment. You’ve got to keep adapting the


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