Primark - Going it Alone

Over the last few weeks, retailers have been releasing their all-important Christmas trading figures and the common theme amongst those with positive results is that they are either wholly direct to consumer online brands or have a strong online offering and multichannel presence.  For example, John Lewis enjoyed positive trading results with a significant proportion being attributed to their online channel and Boohoo and PrettyLittleThing with their wholly online offerings posted some of the strongest results in the industry.

But there is one note-able exception - one retailer who stands out for succeeding while doing things totally differently….. Primark!

Primark are the UK’s largest retailer by volume and third largest retailer by value - currently behind only M&S and Next, as I type they may even have moved into second place overtaking Next in terms of value. They take a very singular approach, focusing purely on the high street and totally avoiding any online sales presence.

In terms of festive trading results, Primark said it gained market share, increased sales and reduced discounting over the Christmas period. According to analysts’ estimates, the low-cost fashion chain’s established UK stores rose by 3% over the Christmas period and slipped by less than 2% in the four months to 5 January.

In a time where other high street retailers reporting growth figures have mainly attributed these to their online offerings rather than in-store it can be hard to comprehend Primark’s reluctance to go online to supplement their 174 UK store presence. But Primark have never been afraid to plough their own path - they don’t offer Black Friday discounts, they appeal to the whole family rather than focusing on one customer demographic and they have avoided adding an experiential element to their stores.

Why the reluctance to add an online sales presence?

John Bason, finance director of Primarks’ parent company Associated British Foods answered his by stating that; “the cost to support home delivery can’t be supported with our price points”. The Primark model is to make profits on volume and relies on low prices to entice customers to spend more while in store. Shoppers in Primark act differently than shoppers in other fashion retailers - they have more of a Costco shopper mentality thinking in terms of volume and value.

Primark sells cut-price items in bulk therefore given that it’s actually more expensive for bricks and mortar stores to sell online than in stores on a per-item basis. Moreover, items bought online are more likely to be returned. Around 30-40% of clothing ordered online is returned and these returns are much more expensive than in store due to shipping costs and time lags.

Why doesn’t Primark do Black Friday or heavy discounting?

Primark sell clothes at rock bottom prices in bulk and therefore shoppers choose to shop there all year round for bargains already, minimising any impact on footfall that could be gained from enticing shoppers with further reductions.

How can Primark appeal to whole families?

Unlike many of the other fast fashion lower-priced retailers currently succeeding by focusing on fashion-conscious millennials - Primark offers clothes for the whole family.  This is because Primark’s USP isn’t fashion forward or trend led instead its all based on value. Whilst the sheer volume of stock shifted means that Primark has new ‘drops’ daily, keeping shoppers returning regularly they are there primarily for the bargains rather than the fashion per se. With their focus on value and volume Primark are able to appeal to the whole family market.

How does Primark still attract shoppers without the need for an addition of in-store experiential add-ons as introduced in other high street stores?

Unlike high street stores such as Debenhams and Topshop who have adapted to the changing shopping habits of UK consumers by introducing nail bars and spas into their stores to help lure shoppers in, Primark remains true to its no-frills, no add-ons store approach.  The low-cost high turnover of their range continues to deliver high footfall and repeat custom without the need for any distracting lifestyle facilities.

Primark may be doing things differently but they are certainly proving that they understand their customers and are giving them the products they want at a price they are willing to pay - something that no matter what distribution strategy retailers adopt - has to remain the main focus.

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