The arrival of big brands like Gap is a sign of ecommerce’s maturity, says Steve Robinson
The announcement by Gap last week that it would be entering the European online arena sees it join a growing list of big-name retailers that have finally made the push into online retail.
The US retailer is planning a UK-based website serving nine other European countries - as an ex-finance director a blend of three currencies, especially at the moment, brings a bead of sweat to my brow.
You can understand why some big retailers have been later to market than others. When the dotcom bubble burst in 2000, retailers rushed to remove the omnipresent ‘e’ from recently cobbled together divisions and started to rapidly divest most of the expensive pure-plays they had recently acquired.
The FTSE 100, which had flirted with the 7,000-point level, fell rapidly to nearly 3,000 points and Boo.com was put into receivership that May, having burned through £125m. Hard-to-believe internet penetration forecasts were sharply revised and the doomed high street survived to fight another day.
So it’s no surprise that it has taken a while for a number of high street names to embrace the internet. Some have been patiently waiting on the sidelines, learning from others’ mistakes. Some have simply been focused on other priorities.
The list of late entrants in the past couple of years contains some big names - New Look, Tesco Clothing, House of Fraser, Asda, TK Maxx and Ikea to name a few. Gap and Banana Republic can now be added to the list of 2010 entrants, while Zara and Selfridges are two of the most eagerly anticipated.
So what impact will this have on the market? Firstly it will give UK consumers their first chance to buy some of these brands outside of the arbitrage traders on eBay. It will certainly change the landscape of some of the Hitwise web visit charts, in the same way that New Look changed the apparel listing.
It will also enable those brands with limited store distribution in the UK to better serve missing chunks of population density and even serve some devotees in Inverness.
Will they grow the market or grow share? I guess a bit of both, but if you are an existing player with a market-leading execution such as Asos or a brand with huge customer loyalty like Next, you shouldn’t have much to worry about.
Should any of those businesses have entered earlier? Let’s go back to 2000. That was the year three ex-Goldman Sachs employees were holed up in an office in Victoria, creating what would become Ocado. Asos, in its non-abbreviated form, was celebrating its first birthday, and it was also the year Net-a-Porter started. Online sales at Argos were £20m and its click and collect service was close to launch - these now represent over a third of sales and may even break the £1.5bn barrier this year.
I am sure these businesses are pleased they carried on playing while this particular Titanic bobbed up and down a bit.
Steve Robinson is chief executive of M and M Direct