Brands never die they move online

BHS LogoBHS has left our high streets.  It was quite a shame to see a store that I actually liked disappear.  However, what surprises me is that it’s not the first one and is definitely not going to be the last to die.

It’s not all bad news though.  A recent BBC news article has announced that the brand is going to survive but, only online.  I immediately began to think that this is another nail in the coffin of the high street retailers… but is it?

In some respects this is better for the surviving business.  The overheads are lower as they don’t have to pay rent.  There are less employees (84 down from 11,000) as floor staff aren’t required (however, there will is no doubt more expensive and skilled staff to support the online business.  Also more warehouse and operations staff to support the online orders).  BHS also have a daunting £500m black hole in the pension fund.  Let’s hope that someone plugs that hole.

So another traditional high street retailer regroup online and hopefully to fight another day in an omni-channel environment.

Let’s throw a spanner in that theory – did you know that Amazon is moving from online to offline?  The complete reverse… It is interesting that Amazon (historically a pure online business) is opening retail stores in America.  According to Forbes….

Most online shoppers visit a physical store before or after they buy a product, even if they eventually buy the product online.

Forbes – July 2016

High Street retailers need to have an online presence even if the ‘perceive’ there main sales channel is a physical store.  Forbes believe that in Amazon’s case “Retailers need to re-imagine the business process at their physical stores in order to compete against – or in Amazon’s case compliment the online experience.”

So are things coming full circle?  Are these online behemoths starting to get to a size whereby they can afford to try a physical retail outlet strategy?  Is the brand power / customer experience that powerful and that in demand?

Are offline businesses, like BHS, having to move online only in order to optimise their supply chains, lower overheads in the short to medium term, and build up customer experience points?

Only time will tell…

However, lets throw something else into the mix.  BHS isn’t the only British high street brand to collapse and then go online.  Anyone remember Woolworths?

Woolworths was founded in 1879 and went to an online only business in early 2000s after being one of the biggest retail chains in the 20th century.  What about MFI, Rosebys, SCS, Ilva and New Heights?  According to The Telegraph in 2008 all gone.

Although according to Yorkshire Post in 2009 – Roseby is looking to return to the retail high street.  

Woolworths tried a revival during the toughest economic times in the 21st century and it just couldn’t find a white knight.

“The world was in meltdown. There were bankers involved who didn’t know whether their banks would be there in a month, let alone if they wanted to invest in a small company like Woolworths,” said one insider.

Telegraph – 2009

It did re-emerge as a online brand but, eventually got taken over by Very.com.

It’s a shame to see such brands which are not just shops but memories.  Everyone remembers the pick ‘n’ mix at Woolworths.  I remember BHS as being a quality (and more importantly reliable) clothing store.  I hope it survives.

How can a traditional offline business survive?  Well in short there is no silver bullet.  There is no quick fix and I’ll be writing my thoughts on retail survival shortly.

Leave a Reply

Your email address will not be published. Required fields are marked *