Audience vs Profitability – The Million Dollar Question Facing Retailers

  • Published: 21 January 2020,
  • The Say Team

2019 was not a good year for the high street. Big, stellar names such as Karen Millen and Coast disappeared, with no doubt more set to follow this year. Some fell foul by cutting their margins too fine, others failed to keep up with what customers really wanted, leading to empty shops and last-minute acquisitions.

Personally speaking I also can’t remember the last time I walked into a high street shop – everything bar food for groceries I now normally buy online – so I am part of the problem, and perhaps personify retail’s shift in fortune. I prioritise ease and convenience over browsing and testing, and the thought of losing time queuing fills me with dread. Call it laziness or apathy, but I much prefer to peruse online and think about purchases over deciding on the spot.

However, whilst shopping for Christmas presents this year, a past favourite brand frustrated me so much whilst online it actually made me want to step back into a store – a rare feeling these days. The offender? Jack Wills – a hark back to my preppy student days. I admit, I have disengaged from the brand over the last few years, as it didn’t suit my needs – something others have clearly done too, looking at its recent financial woes. That aside though, considering how much value is placed on a frictionless, quick checkout experience, Jack Wills did everything to prohibit that.

Despite the fact Mike Ashley only bought the brand recently, it suddenly seemed like Sports Direct for students. Discounted sale prices undercutting the brand’s elite perception? Check. Expensive delivery with no discount for click-and-collect / no pick up in-store option? Check. Incentives to spend more to unlock vouchers which could only be used for the next purchase, instead of instantly? Check. Not the smooth online experience the brand used to offer.

In my view, the brand is playing a very dangerous game by adopting the checkout habits of its now sister brand. In the PR world, it would be akin to writing a press release without any news – just annoying journalists and making their lives harder. It may be generating economies of scale by coming under the same supply chain infrastructure, but in a time when the brand needs to win over new audiences, quickly, it actually risks alienating customers with these expensive delivery practices.

Magento the open source eCommerce platform, in its latest report confirms my hunch – free delivery and returns are two of the three most important factors for consumers when deciding whether to shop with a brand again. Based on my experience (especially as returns weren’t free either), I’d be reticent to buy online again, and for those who aren’t aware of the product quality, they may lose patience during the checkout process.

Whether this model is used to encourage shoppers into store (perhaps capitalising on the opportunity for impulse buys) or just ensure a profitable supply chain (cost to serve being an increasing issue within the industry), for me something is jarring. Sports Direct’s pricing model is understandable – the discounts offered mean profitability has to be covered in the supply chain; but this doesn’t necessarily translate to Jack Wills, especially once the sales period is over. It will be interesting to see whether prices do go back up, or whether the discounts are here to stay – adhering more to the fast fashion model. In a world where prime target audiences like Millennials and Gen Z cry out for free, fast delivery, Mike Ashley’s expanding stable of brands may want to think about its pricing structure to avoid past mistakes and cater to audience demands. In PR one of the first rules is audience first, and retail is no different. If it doesn’t appeal to the end user (a consumer vs a journalist), then it won’t see success, thereby undoing all the work to ensure profitability in the supply chain.

Perhaps adopting the more flexible yet appealing practices of rivals such as Boohoo might help Jack Wills regain some of its credibility with younger audiences, or a wider brand refresh as it enters the new decade to reposition it within the market. Who knows what the future holds, but retail is a fast-changing beast; so for the Fraser Group to revive the fortune of two of its big names, it will need to keep innovating, which may include deviating from its tried and tested method – keeping Millennials like me happy in the meantime.

By Fiona M.

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