Deprived of what makes them special, can department stores work online, asks Peter Williams.

Deprived of what makes them special, can department stores work online, asks Peter Williams

Although times may be tough for us as retailers, as consumers we have never had it so good. That is down to availability of product, new price promotions every week and the ability to buy anything from anywhere in the world through the internet.

I was musing on the latter feature recently when listening to a debate among the world’s leading department stores. When department stores were founded, the grandeur of their architecture both externally and internally, with huge displays of product, gave the consumer an unparalleled choice. 

These features still exist today and are combined with the personal service of the sales associate and the glamorous bag for your purchases. Although there have been moments when people predicted the death of the department store, the great iconic shops such as Harrods, Selfridges, Printemps and Rinascente have reinvented themselves and continue to prosper, dominate and define their retail locale. 

However, the arrival of the internet strips all these features away in cyberspace. All of a sudden, you can buy anything that is available from the ‘long tail’ or ‘extended aisle’. 

When you are shopping in London looking at men’s shirts, for instance, the upscale department stores offer a wide range of brands but with an edited number of styles within each brand. 

From a consumer’s point of view, he or she is saved a great deal of time if they are able to find something they like within the store, and therefore don’t feel the need to go to the flagship store of, say, Paul Smith in Covent Garden, or Duchamp in Notting Hill.  

However, when shopping on ‘Departmentstore.com’, the competitive set is very different. Departmentstore.com usually has fewer brands and options than appear in the store, and considerably fewer options than the offer that appears on the brand’s own website, which is now only a few seconds away, rather than 30 minutes’ travel time. The consumer is left disappointed with the offer and the experience because the physical store sets such high expectations.

When department stores first opened, buying teams selected products. Today, with the bulk of the fashion offer made available through concession arrangements, buyers are selectors of brands rather than selectors of products, and no stock is held in a central distribution location. The economics for selling and stocking the same size of range online that is sold in-store are financially very challenging. 

So what should the high-end stores do about this dilemma? With the changing shopping habits of all generations, they have to have a dotcom presence. Maybe the business model is wrong? Rather than trying to hold all the stock in a central place and deliver it directly from one location, Departmentstore.com should act more like a portal that directs consumer traffic towards brands’ websites.

The exception to all of this is Johnlewis.com – a unique retail brand that is trusted like the BBC. With a huge range online Johnlewis.com has the potential to be an enormous business, not just in the UK but also, much more importantly, internationally.

  • Peter Williams is non-executive director of Asos and a former chief executive of Selfridges