At the end of 2015, Poundland embarked on an ecommerce trial in a bid to transfer the success of its bargain stores online.
However, it’s just been reported that the retailer is to call time on the venture after failing to ignite much interest.
So, why exactly did it fail? Here’s a bit of insight into the story.
Failure to convert existing shoppers
Having opened its first ever store over 25 years ago, Poundland is built on a tried and tested formula. The reason behind its success is that it knows exactly what its customers want and it unashamedly delivers it.
Its stores – a mainstay on most UK high streets – boast bargain multipacks of everything from batteries to fizzy sweets. Though it famously uses tricks of the trade in order to keep its prices so low, such as ‘re-engineering’ products to shrink the size or quantity of items, faithful customers appear well aware of this fact, maintaining that it offers better value than other stores or budget supermarkets.
With the arrival of its online shop, Poundland failed to recognise that most existing customers do not typically use it like a standard or large supermarket.
The buying process seems much more fractured – people are likely to pop in simply to check out what bargains are in that week or to pick up a specific item. Meanwhile, Poundland’s appeal also surely lies in the joy of coming across a surprise find.
— Ebony L Nash (@Ebzo) January 28, 2017
Further to this, new research from Shoppercentric has found an increase in the ‘little and often’ trend, with 16% of grocery shoppers rarely doing a main shop – a figure 6% higher than it was in 2016.
All in all, it seems unlikely that consumers would be able to replicate this reliable experience online.
As the likes of Sainsbury’s and Tesco launch new initiatives to offer one-hour delivery in London, shipping remains an important sales tactic for most of the big supermarkets.
Most consumers are prepared to pay for this convenience, as prices typically fall in line with the supermarket’s wider positioning. In contrast, Poundland’s online delivery costs are somewhat at odds with its overall approach to value, coming in at £4 unless a customer spends over £50.
With the average spend in Poundland said to be around £4.72, it seems unlikely that consumers would be willing to pay double for the privilege of getting their goods delivered. What’s more, it seems even unlikelier that shoppers would ever be able to reach a £50 shop.
Without enough of an incentive in this area, it’s unsurprising that existing customers remain satisfied with shopping in-store.
Lack of focus
Lidl was named as the fastest-growing retailer in 2016, with Aldi and Lidl accounting for 10% of the total supermarket spend in the UK. Both have famously avoided venturing into the online sphere, instead choosing to focus on physical expansion with investment in stores and warehouses.
It’s certainly been a successful strategy, with some suggesting Poundland could have similarly benefitted from this laser-focus on its physical presence instead of forcing a multi-channel approach.
That being said, with the recent launch of dedicated clothing stores for its Pep & Co range, it does appear to be investing somewhat in this area. Again, perhaps herein lies the problem, resulting in a fractured or shallow focus across the board.
Mixed user experience
Finally, while the online user experience is somewhat irrelevant now – with a lack of interest in the overall concept overriding design – it is still interesting to note a few errors.
On the positive side, the site appears to be very simple to use, with intuitive navigation and guest checkout facilitating an easy experience.
Conversely, certain features like the ‘Shuffle’ tool are a bit baffling.
Attempting to replicate the experience of finding surprise bargains in-store, this ‘new, fun way to shop’ on-site offers up a random selection of items.
However, instead of providing users with a novel or entertaining experience, it negates the way people naturally want to shop online, making the whole process much more time-consuming and muddled than it should be.
The aforementioned shuffle feature is perhaps a good reflection of why Poundland’s ecommerce venture failed to work. Ultimately, it’s just a bit misjudged.
Poundland’s expansion into ecommerce was done in spite of the needs of its core customer. And while a multichannel approach is undoubtedly the goal of many big retailers – it’s no use if the demand isn’t there in the first place.