Retailer Next released its figures last week, and it’ll come as a shock to no one that they’re down 8% from last year. However, it would have been a fall of 24% had it not been for the increase of their online sales.
It still banked £726m profit, so hold the violins for now. Interestingly, £460m of that profit came from online (£1.8bn sales), and £286m came from the shops, which still shifted more goods (£2.1bn sales), but for 1/3 of the margins enjoyed online.
So, while it’s clear offline is still important, it is a poorly performing part of the business.
For Maplin, who don’t know whether they sell disco balls, HDMI cables or shredders, it’s easy to say their offering won’t stand up to Amazon. I don’t need to touch and feel an HDMI cable before I buy it, I don’t need to see if the shredder will look nice in person before parting with my cash.
But we can’t just blame the Internet when it comes to Next.
While I think their clothes are irrelevant to anyone over 12 and clearly suffer strong competition in terms of both price and convenience from supermarkets, I don’t want to focus on their brand or product ranges, as obviously there is a market, I want to focus on how something like Next Home, which clearly has offline advantages, can suffer so much.
The internet, in this case, is the poorer experience. It’s not as easy to confidently buy a lamp, cushion, kids coat etc online. Given the choice, all being equal, most people would prefer to go into the store.
So why isn’t this happening? I think it’s a number of things.
First, people generally enjoy visiting the shops. For most, it can be a better experience than flicking through tiny images on your phone, then taking the inevitable trip to the Post Office to return those jeans that are too tight because you enjoyed Christmas a too much...
It’s not the appeal of online, it’s the lack of free time.
People these days just don’t have the time. I don’t think retail suffers because there’s something better, I think it suffers because no one has the time to shop and the internet is more convenient. Convenient isn’t always better.
If I’m asked to go shopping at the weekend, my heart sinks. Traffic is up 18% from 20 years ago, so why do I want to drive for 30 minutes to go a few miles down the road? The country is so busy now that even popping in the car and parking near a shop seems like a luxury from the past.
Also, most people can only shop at the weekend. It’s not like we go to the town center on a Saturday, immediately find a parking space and wander around an empty town – it’s pure chaos. Kids running amok, old people getting in the way – they’re all out. Give me my small screen to flick through.
But during the week, it’s dead, and that’s where the money is being lost.
Maybe it’s also because, just like the traffic increase, other factors such as the number of parents that are both working has exploded. Put this down to a movement or equality, or put it down to silly house prices forcing both parents to work, it’s still a fact. There are 1,200,000 more working mums today than 10 years ago. When I was a kid, I remember being dragged around the shops on weekdays during school holidays. No one has the spare time to enjoy the luxury of shopping these days!
So, I guess what I’m saying is, I don’t think the internet always offers a better experience, and it was Next and its Home stores that really made that clear. People are buying lamps that don’t suit their lounges and coats way to big for their kids online because they simply don’t have the time to enjoy the retail experience any more. And because it’s happened slowly, no one has really noticed that these little luxuries we enjoyed ten years ago are no longer an option.
So let’s stop blaming Amazon, it’s more the fact we’re a time-stricken folk running around in chaos!
Adam Smith is managing director at digital agency Rawnet.