After Tuesday’s blog about the collapse of HMV and the impact that internet retailers had on the high-street, yesterday saw the news of Blockbuster entering into administration. Times are tough for brick and mortar retailers and while many try and fail to build a strong e-commerce platform, even now there are some large organisations that are yet to create a presence on the internet. Seller Dynamics therefore asks if you can’t beat the internet traders, why not join them?
Christmas 2012 transpired to be anything but the season of joy for Morrisons as the supermarket started January with the announcement of a 2.5% decline in sales over the six week Christmas period in comparison to the previous year. Since this announcement, questions have been asked about Morrisons’ reluctance to engage in e-commerce considering that they are the UK’s fourth largest grocery retailer yet do have an online store unlike their main competitors – Tesco, Asda and Sainsburys.
While the world sat up and took notice of the huge impact that B2C e-commerce had on the retail industry over the Christmas season, it was somewhat surprising to hear that Morrisons was not one of the many companies who profited from selling via an online store. Although CEO Dalton Philips has stated that the majority of Morrisons customers are not interested in shopping online, having a minority who do spend online is better than more and more customers being lost to competitors that offer an entirely different shopping experience to that of Morrisons. Philips however has since hinted that the company may look towards developing the e-commerce side of their business as a result of the Christmas decline and the ever increasing numbers of UK consumers looking to the internet to make purchases.
The power brokers at Morrisons only need to look at last year to see why e-commerce is such an important area of retail. Online sales in the UK grew at a rate of 17.8% in 2012, the fastest e-commerce growth rate ever recorded. While Morrisons may be seen as late bloomers in comparison to Tesco who have operated an online store since 2000, Philips must move his company into this market before taking any more financial hits. While only approximately 5% of all grocery sales are made online, this still presents an opportunity for Morrisons and it is more likely than not that this figure will only increase in the coming years.
Whether or not Morrisons will definitely launch an online store is still undecided but from our perspective as an e-commerce specialist, we believe that the company most definitely has to move into e-commerce in order not to be swept behind by the ever growing tide they seem to be fighting against.