Bricks & Clicks: A Changing of the Guard?
By Jack Brumby
The latest clothing market figures show High Street clothes retailing is a bloody business. Meanwhile, upstart online retailers go from strength to strength…
Summary:
Lower-cost online clothes retailers are out-manoeuvring their old-school competitors and ramping up the pressure in what has always been a highly competitive market.
Complacency is (still) not an option: 
• Langton takes fashion very seriously.
• The UK clothing market continued to fall in Jan, down – 1.2% in the 12 weeks to 15 January despite improvement in menswear.
• Primark was the only major player to gain share (+2.4%); Next (-1.5%), M&S (-2.8%) and Debenhams (-4.2%) all continue to suffer. • These big box retailers were ‘cool’ at one point. Talk to anyone under the age of 35 and you might find that that is no longer the case…
• Flash sales sites these days, for example, are now a Big Thing.
• These days, what you want is a warehouse or two, a well-run website (plus app), and a responsive distribution network.
Online retail is changing the game…
• Online retailers are unencumbered by costly real estate and are thus able to apply margin pressure to incumbents.
• Not many people are looking to pay £40 for a work shirt from M&S when then know they can order one from their bed for half the price.
• Flash sales site Secretsales has just been bought by Exponent.
• Meanwhile, Boohoo’s share price performance speaks for itself and MySale (the flash site whose shareholders include Phillip Green and Mike Ashley) has nearly trebled in a year.
Et tu, Lipstick? Beauty might be next in line for the Digital Revolution:
• Beauty vloggers are a mainstay of the YouTube generation, and have been some of the platform’s biggest stars for years.
• This is one area in which online retail is actively catching up – another piece of unwelcome news for department stores.
• Recent data suggests that department stores are losing overall share in what is one of their last bastions (Bloomberg Analysis, 2016).
Big box department stores will continue to struggle:
• Unless, of course, the old dogs evolve and find innovative uses for all that space they have.
• In the same way that Lidl and Aldi have instigated a rapid pace of change in food retail, online competition might yet be the making of department stores.
• Experience is key today. If department stores can make their proposition more experiential they might continue to attract footfall.
• Think not just food aisles but food courts (a la Eataly) and trendy restaurant concessions (Debenhams Westfield’s Franco Manca).
• Not just cosmetics departments but beauty parlours, spas, barbers and hairdressers.
• Sooner rather than later, department store retailers are going to have to start thinking outside the (big) box. Contact – Jack Brumby – +44(0)20 7702 338