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A month ago, I wrote a post questioniong whether Primark was mad to ignore ecommerce, after it had said it had no plans to sell online. 

Strangely, for a post and discussion on an internet marketing blog, the general consensus was that Primark's offline only strategy was a good idea for such a low margin retailer. 

Yesterday however, Primark started selling a limited range of clothes via ASOS. So is this a good idea? 

Earlier this year,  George Weston, chief executive of Primark's parent company, Associated British Foods, seemed to rule out any prospect of Primark selling online.

This came together with some very impressive results. All the more so in such difficult times for retail. Sales were up 24% and profits up 56%.

So should Primark sell online? 

Pros

  • Ecommerce is only going to keep growing. For the immediate future at least. It would be better for Primark to enter the ecommerce market from a position of strength now rather than out of necessity further down the line. 
  • There is a market for Primark online. There are people who can't easily reach Primark stores, plus the younger demographic which is more likely to buy online.  
  • Ecommerce can complement the high street storesPrimark could offer in-store collection for online orders, thus bringing more people into stores. It could also make more use of mobile. 

Cons

  • The costs of delivery / logistics. The costs of picking orders for individual customers and paying couriers may east into the retailer's margins. Also, delivery costs could be a barrier for customers. 
  • Returns. Primark produces cheap, 'throw-away' fashion. Would it be an issue for online buyers if the t-shirt they bought shrunk on first wash? 
  • Low basket values. Low order values mean its harder to make a profit online, without the impulse purchases offered in store. 

Primark on ASOS

The link up with ASOS is a great way for Primark to test the waters. First of all, Primark has chosen an excellent partner. ASOS has been succesful online, and has plenty for the (until now) offline only retailer to learn from. 

Primark doesn't have to worry about providing a great user experience, as ASOS does this pretty well already. It also seems that customers shouldn't be deterred by delivery or returns costs: 

There is a limited range, but I imagine this is something that may change as Primark sees the initial perfomance. 

One thing at the moment is that there's no obvious sign that ASOS is selling Primark's clothes, you'd have to stumble upon it in the brands list as you navigate.

Likewise, Primark's own site gives no hint that people can buy its clothes on ASOS. Since it will be getting a fair amount of brand search traffic from potential online customers, it makes sense to send them somewhere. 

In summary, this seems to be a good move from Primark in order to test the waters, and it would be hard to replicate the user experience and ecommerce knowledge of ASOS if it wanted to launch its own site quickly.

However, one drawback of using ASOS is that Primark has to directly compete with other brands on the same site. As Venda's Eric Abensur points out: 

Diverting resources away from its own online proposition may have some initial merits, however Primark should quickly be thinking about how it can be disruptive in this space and this will rely on it creating its own individual online presence.

Once (and if) the case has been made for a move into ecommerce, Primark will need to go it alone. 

Graham Charlton

Published 4 June, 2013 by Graham Charlton

Graham Charlton is the former Editor-in-Chief at Econsultancy. Follow him on Twitter or connect via Linkedin or Google+

2565 more posts from this author

Comments (8)

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AZ

Graham, this is very thought-provoking.

It sounds like a good idea to test the water, I think there's no loss for Primark what so ever, instead ASOS might be worried about diluting its brand image.

That said, it's interesting that there's not a very good marketplace for fashion brands UK to support smaller brands, after all it may not make sense economically to launch their own online stores.

about 3 years ago

Suzy Turnbull

Suzy Turnbull, Owner at Digital Marketing Partners Panama

A very interesting development and toe in the water test to see if E Commerce could be something to develop on a much wider scale for Primark.

On the other side, is this the right brand association for ASOS who I thought were more aligned to more upmarket brands?

about 3 years ago

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Steven

Great article Graham with nice focus on the Asian markets - The costs of picking orders for individual customers and paying couriers may east into the retailer's margins.

about 3 years ago

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steven

I think this is an excellent result for Primark Graham. Your article plays down the fact that ASOS is such an addictive site for 16-32 market, it does what it does incredibly well.

Primark will gain so much knowledge as a result of this partnership - Generation Y, social media interaction and content strategy in general.

If I was the head of Ecommerce at ASOS I'd want to ensure this partnership performed extremely well so I could power the Primark ecommerce site in the future.

And also, let's not forget, this partnership is a great win for the consumer - all in one place - job done.

about 3 years ago

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JD

Interesting to see that not only are Primark taking to online sales through partnership with ASOS, but also using Selfridges online to sell jeans. Two of the great online clothing retailers with excellent ecommerce platforms and customer service... Looks like the future is online for Primark after-all, just without all of the hassle of setting up an online distribution channel.

about 3 years ago

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sarah hughes, Director and Founder at Datitude Limited

This brings to mind the recently announced tie-up between Morrisons and Ocado, allowing Morrisons immediate access to an exceptional online grocery operation. And casting further back to 2001, John Lewis first went transactional online after it acquired the UK arm of Buy.com.

It looks like Primark too is thinking how it can leapfrog the competition and get straight to a quality online operation, without the growing pains, time, expense and mistakes of building from scratch.

Clever.

about 3 years ago

Graham Charlton

Graham Charlton, Editor in Chief at ClickZ Global

@JD So they are. I wasn't aware of that. Is that a new development?

about 3 years ago

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Justin Daich, Ecommerce & Commercial Trading Manager at Hotel ChocolatEnterprise

@Graham Noticed this at the start of the week. As Sarah says, this is a very clever move for Primark. They are slowly moving into the world of eCommerce without the challenges and cost that any other company has when starting to sell online. Bit surprised at Selfridges though, as while it gives them access to a lower priced product, it doesn't do much for their brand.

about 3 years ago

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