In our BUSS4 Section A briefings this week we've been exploring the competitive advantages enjoyed by "omnichannel retailers" who get the mix right between e-commerce, physical retail and other distribution channels.
A great example hits the new this week, as lifestyle brand Ted Baker report significant growth from e-commerce sales. Ted Baker sells online, through 416 stores, outlets and concessions, including 184 in the UK.
As always, the important point for students to consider is not the "what" (that e-commerce sales have risen), but the "why"?
Our strategy is to develop as a leading global lifestyle brand, based on three main elements:
considered expansion of our collections. We review our collections continually to ensure we react to trends and meet our customers’ expectations. In addition, we look for opportunities to extend the breadth of collections and enhance our offer;
controlled distribution through three main channels: retail (including ecommerce), wholesale, and licensing. We consider each new opportunity to ensure it is right for the brand and will deliver margin led growth; and
carefully managed development of existing and new international markets. We continue to manage growth in existing territories while considering new territories for expansion.
The latest half-year results point to how development of the e-commerce channel has been particularly successful recently. Here is the section of the results explaining the e-commerce success: Our e-commerce business delivered another period of very strong growth with a 63.6% increase in sales to £22.9m (2014: £14.0m). Sales have benefited from improved website design with easy to use navigation which is also optimised for mobile use. Additionally, the Canadian website launched in November 2014 and the Australian site launched in June 2015 have delivered encouraging performances so far.
So the "why" e-commerce has helped revenues rises is about two elements for Ted Baker; new websites localised and optimised for the Canadian and Australian markets, together with further improvements in customer navigation. Those factors have contributed an extra £8m of revenues in the last six months alone.
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