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Feasibility of Online Shopping in UK Primark

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Published: Fri, 02 Mar 2018

Abstract

The purpose of this research is to study the online shopping in UK clothing retail market, and how it will be helpful to the researcher to get the idea about the feasibility of Primark online shopping service. The research is divided in 5 chapters each chapter gives the reader some idea about online shopping and how it will be beneficial for the company and the consumer. Moreover, the researcher uses this chapter to explain his/her point of view by taking individual chapter. Each chapter has many sub divisions. The researcher plan her research on typical system like chapter vies start from introduction, literature review, methodology, implementation calculation and last conclusion.

In this techno savvy world people are using the technology in their day to day life. Sometimes they are using directly and sometimes indirectly but now the situation is like that the person must have use the technology to make their life luxurious. The researcher writes about ecommerce, its advantages and disadvantages. In methodology, the researcher use the both type of data qualitative and quantitative. In quantitative the researcher collects both type of primary and secondary data by using interview and survey.

The aim of the research is how Primark can increase its sell in this competitive market. And online shopping market is very strong in UK. Furthermore how the online shopping will be change the stores situation and what are the changes the company will get.

1. INTRODUCTION

The researcher doing t

CHAPTER – 1
1.1. WHAT IS PRIMARK?

Primark Stores Limited is an Irish clothing retailer. Its stores are located in various regions like United Kingdom, Ireland, and Spain. Within this area of responsibility, Primark stores outnumbered other clothing retailer business, with one hundred sixty one stores overall distributed in three major regions: one hundred twenty-five in the United Kingdom. The company positions itself as marketing fashionable at cutthroat prices. Primark is known for selling clothes at the budget end of the market. Its success is based on sourcing supply, making clothes with simple designs and fabrics and targets young, fashion-conscious individuals ages 35 below, offering them simple yet high quality clothes and apparels. The relevance of global trends and consumers’ demands on lifestyle made Primark Store Limited reinvent its business scheme and management structure.

From the first penny store in Ireland to the latest flagship store in Liverpool, the Primark story has been one of continuing success founded on a unique combination and lean operations. Primark was opened their first Penney store in Mary Street Dublin in June 1969. During the one year time they added four more stores in Dublin. After continues success in Dublin, in next three year 1971, Primark opened their first store outside the Dublin in Cork and end of that year there were 11 more stores in Ireland and one in Northern Ireland.

Furthermore, in 1973, the number of stores had reached 18 in Ireland and Primark Began trading in Great Britain with four out of-town stores. The following year saw the opening of the first UK high street store in Derby and Bristol. In ten more years Primark increase the number of stores in UK and Ireland both like 18 new store added in UK and 9 stores in in Ireland. And the management also expanded the number of the stores in UK and Ireland to 22 stores each.

The most innovating thing of Primark was in ten years duration from 1984 to 1994 a further Like most of the Primark stores in high street so it is beneficial to them. Primark has so many strengths, weakness, opportunities and threats. Like 40 years experienced retailer, reasonable price seller of clothes, eco friendly carrier bags etc. Primark has so many weaknesses, weak public relationship, leak of services, no online facility for shopping. For promotional development Primark can introduce their own store cards, Self scan area and soon. Due to competitive market Primark provide cheapest clothes to customers. Its create threat for Primark to stay in these market.

LIST OF STORE LOCATION IN LONDON

Basildon

Kingston-Upon-Thames

Basingstoke

Lewisham,

Bedford

Leytonstone,

Bexleyheath

London

Brighton,

Luton

Bromley

Maidstone

Camberley

Margate,

Chatham

Norwich

Crawley

Oxford

Croydon

Peckham

Dartford

Reading,

Ealing

Romford

Eastbourne

Slough,

Eastham

Southend

Gravesend

Stevenage

Hackney

Sutton

Hammersmith

Thurrock

Harlow

Tooting

Harrow

Watford

Hemel Hempstead

Wandsworth

Hounslow

Wembley

Ipswich

Woking

Kilburn,

Woolwich

Table 1: Field work Primark store location in London

Primark stores a privately held subsidiary of Associated British Foods, Is involved in opening departmental store. It owns and operated 188 departmental stores that provide products such as women wear, children wear, menswear, footwear, accessories,

The children market in Britain is worth £4.5bn. Five years ago, Primark had a 2.8% market share. By 2006 this had risen 5.4% and in 2007 to 6.2% this now places Primark fourth in terms of market share. (Sutherland & Canwall, 2008) What is e-commerce?

1.2 Aim

The researcher aim to do this research to increase the volume of sales at present Primark is leading clothing retailer in UK. Furthermore according to this techno savvy world, and to compete the all competitors Primark also have to be go ahead with some new innovation with them.

1.3 Objectives

1. To explore how online shopping can benefit Primark and boost its sales.

2. To calculate, agree and plan for the necessary resources for this project

3. To investigate the market for online shopping service in the UK competitors market.

4. To identify new segment to increase the market share

CHAPTER – 2
LITERATURE REVIEW
2.1. ONLINE SHOPPING SERVICE

The researcher wants to introduce new direct marketing strategy for Primark to increase the sales volume. Like other competitors, Primark does not have an online shopping facility. In this day and age of technological advancement, it becomes very essential for any organisation to establish oneself in the field of e-commerce. The researcher has found a gap in the market for such a technological need and would like to introduce a promotional strategy for the company’s growth in this high tech savvy world. The e-commerce can be defined as a modern business methodology that addresses the needs of organization, merchants and consumers to cut costs while improving the quality of goods and services and increasing the speed of service delivery, by using Internet (Goal, 2007). According to Varley, (2006), since the start of the new millennium, shopping via a computer has moved from the something indulged by a niche market to commonplace activity amongst the population masses. Furthermore the new internet world provide the retail industry with a new and exciting way of enticing consumer to purchase the product from the comfort from their available place like from home, office or anywhere they can access the ‘virtual world’. In fact in recent developments in personal mobile communications industry would suggest that before long we will be able to go shopping literally anywhere at any time. Since the more improvement in the online shopping service is providing more and more luxurious service day by day so the the home delivery option alongside stores as the retail industry has developed.

According to Fletcher, Bell & McNaughton, (2004) e-commerce involves electronically medicated exchanges with customers. According to Rosen, (2002). Electronic commerce or “e-commerce” covers the range of online business activities for products and services, both business-to-business and business-to-customers, through the Internet. E-commerce breaks into two components: On the other hand side online auction is straightforward yet revolutionary business concept. Brokage business model, auctions bring the buyers and sellers together in a virtual marketplace. ( Bidgoli, 2002)

· Online Shopping: The scope of information and activities that provides customers with the information to conduct business with you and to make informed buying decisions.

· Online Purchasing: The technology infrastructure for the exchange of data and the purchase of the product over the Internet. Online purchasing is a metaphor used in business-to-business e-commerce for providing customers with an online method of placing orders, submitting purchase orders, or requesting quotes ( Rosen, 2002)

Estimates vary as to the size of the business-to-consumer e-commerce market. The International Data Corporation (IDC) estimates that the total purchases made over the web were $10 billion in 1997 and will be more than $220 billion in 2001 (Oliveria, Amorim and Vilao, 1999). These large s are put in a wider context by KPMG (1999) which reports that, “Direct sales are 5% of retail sales in the UK and 4#% in the US. Of this total, 16% US home sales and 1% of UK home sales are electronic.” Forrester Research (Tagliabue, 1999) whose 1999 research showed

Selling goods and services online is also called “ecommerce.” Popular ecommerce Web sites include Amazon.com and eBay, yahoo shopping, etoys, the met store , smart shopper and so on. Ecommerce is not the sole province of large companies, however; many small businesses have found considerable success selling on the Internet.

Like this research content the use of the technology so the researcher would like to discuss about e-commerce service, Electronic commerce or ecommerce is a term for any type of business, or commercial transaction, that involves the transfer of information across the Internet. The e-commerce can be defined as a modern business methodology that addresses the needs of organization, merchants and consumers to cut costs while improving the quality of goods and services and increasing the speed of service delivery, by using Internet (Goal, 2007). According to Forrester Research at, the European online retail market is expected to grow from Euro 40 billion in 2004 to Euro 167 billion by 2009 (Forrester, 2006) Cited in (Burdick, Coakley &Richardson, 2006)). And what are the benefits of e-commerce service? But basically the people knows each and every coin has two side so when you get some benefits from the ecommerce on the other hand side you get some disadvantages of the ecommerce as well. Moreover, with the help of online shopping service people can save their time for the shopping, online shopping service is very flexible you can use it anytime. In the opposite side you cannot touch and feel it you can’t get it immediately first you pass through the very long process of ordering and after some days limitation like after four days delivery or one week delivery your get you stuff.

But nowadays the most of the market work with the online shopping service like all the clothing stores provide Online shopping service. For example M&S, Next, Topshop, Matalan, Monsoon, and soon. These all the clothing company has very high share market value in the market and very huge turn over in the market as well.

According to the issue published in The Guardian, (2007), The weather also effect the shopping from the store and the online like the number shows how much it effect the market online market sales. In July 2007, because of the wet weather the sales increased by £4bn in a month for the first time at £4.2bn – up from £2.3bn in July a year ago – according to the Interactive Media in Retail Group (IMRG).

2.2 PRIMARK ONLINE SHOPPING SERVICE (STRATEGY) ADVANTAGES & DISADVANTAGES

Every new thing has its own pros and cons like online shopping service is advantageous as much as disadvantageous for the Primark. First the researcher would like to discuss the advantages of the online shopping service at Primark. According to the competitor of Primark’s are M&S, Matalan, Topshop, Next and so on. All of the competitors are providing very good and fast online shopping service for their customers.

2.2.1 Business Benefits

According to the Rosen, (2002), by providing your customers with 24 hour-a-day,7-day-a-week (24 x 7) access to information, you can support sales, in some cases shorten the sales cycle, and cut your administrative costs, since customers have access to information when they want it. Some people believe that shown that FAQs on an online shopping site give customers a better idea of company’s product and help them feel more comfortable making the decision to buy. E-commerce is a great way to get the business of these off- peak shoppers. For a very small amount of money, a company can have its “cyber-shop” open 24 hours a day and 7 days a week. Savings on customers service staff, savings on telephone operators and sales people, instant update of catalogues and prices, product targeting, active targeting , passive targeting, better overhead and inventory control, worldwide visibility, attractive option for the physically challenged (Shim, 2000).

Further all the advantageous strategy for the any company who introduce their online shopping service. With the Internet reaching all corner of the world so by introducing the online shopping service Primark can be reach all around the world. Actually they can advertise themselves globally for very small price. When the online shopping service the company proved they give the all the detailed description of the products so the Primark have to be recruit the less staff for the customer service staff, telephone operators, and less sales staffs. Like the customers when makes a purchase online is one less using the company’s telephone operators and salespeople. Product targeting and active targeting both are the very helpful for the company. Primark can be accomplished actively or passively on the Internet to make their any product targeting. For the company Active targeting for the product by their product targeting Product targeting is in the two different way like the

Due to the further description of the 24 x 7 online shopping service is definitely very useful for the any company like M&S, Next, Matalan, etc have the same selling hour like Primark but they are selling more product by providing online shopping service. Furthermore nowadays people are more busy and addicted to use the internet in their day- to- day life. The world Internet users are the 100% present day compare to the year 2000. (Internet world stats, 2009)

Normally Primark is just getting the benefit of on-peak shoppers only because it does not have any online shopping service to provide their customers. With just the shopping hours the company is making very good volume of sales so think when the company launched their online shopping service it will be more beneficial for the company to increase the volume of sales.

2.2.2 Operational Management Benefits

Better availability of Service which means conveniently allows customers to shop in their homes from anywhere online. More benefit of online shopping for the operational management is cost reduction in information processing like reduce the cost of processing and retrieving order and customer information. Better timeliness of service means online operations can offer customers 24-hour servicer for purchasing good and services. Initial cost of operation less expensive, basically the capital investment in e-commerce operation is considerably less than brick-and mortar operations. Improved product development by the ability to be online with research and development people from around the world can help to reduce the time-to -market for new products and the cost of their development. Improved scheduling which is help full to the business. The online ability to keep track of product or service activities allows schedulers to be more accurate and timely in scheduling and rescheduling production activity, reducing costs (Heizer and Render 2001, p. 460; Laudon and Laudon 2002, pp.122-129; Kamarainen et al. 2001).

2.3 Disadvantages of online shopping service

There are so many disadvantages of e commerce business for the consumers like, credit card fraud, products that Don’t show well, Limit to the Market, Small companies unprepared for global selling and soon. According to Shim & Anique (2000) Credit card number can be stolen by the disgruntled or criminal employee who has legitimate as well as illegitimate access to the company e-commerce system. There are so many disadvantageous of ecommerce possible capacity and bandwidth problems. Security issues are major concern for many consumers. Security issues and measures are expected to improve in coming years, through the use of media other than credit cards on the web, such as e-Wallet, e-cash and other payment systems, acceptance or digital signature, more widespread application and acceptance of encryption technology and greater awareness and understanding of customers’ concerns (Bidgoli, 2002b). The main disadvantageous for shoppers, in ranked order were ‘Availability’; ‘Can’t be in to receive delivery’; ‘Premium charged for delivery’; ‘Premium charged for delivery’; and ‘Can’t see or feel the merchandise’.( Harris & Dennis, 2002)

2.4 Marketing contribution to High turnover

Introduce online shopping service Primark needs many promotional strategies for the promotion of new service.

To attract the customers and to publish new service they need so many promotional strategies like direct marketing, Advertising, publicity, sales promotion, Exhibition and so on.

Primark always focuses on low price high volume strategy to develop market. Specifically in this recession time, peoples also moves towards Primark low price value added products. To grab this opportunity they should have also low cost marketing strategy as well. In the modern world the Internet often becomes the best medium to communicate and search things around. As all competitors have Online shopping strategy they can easily grab the markets. Online shopping strategy helps to advertising the company’s product. As a result of people’s awareness about internet and the young age groups’ tech savvy attitude, they can search their products, compare with others to make their orders online easily.

2.5 Market Share Value of Primark

At present Primark is number one UK clothing retailer in high street. There are so many competitor of it like Topman, Miss Selfridge, Dorothy Perkins, M&S, Tesco, ASDA, Matalan Mango, TK Max and soon. Primark has moved a step closer to toppling Marks & Spencer from the top spot in clothing market share, after its volume share leapt to 10.1% ( Ana, 2008). IMRG expects internet retail sales to increase by 15 per cent this year, with customers predicted to spend an estimated £13.16bn online in the lead up to Christmas. A new record for internet sales volumes was set last Monday – typically the biggest trading day of the week online – although in keeping with the wider economic gloom, sales values were flat (Guardian, 2008).

Growth for retail industry till year 2013 is weakens and steadies, First Research forecasts are based on INFORUM forecasts that are licensed from the Interindustry Economic Research Fund, Inc. (IERF) in College Park, MD. INFORUM’s “interindustry-macro” approach to modelling the economy captures the links between industries and the aggregate economy ( Hoovers, 2009).

Due to Hoovers, 2008 Primark business was -3% but in next coming year 2009 it is 1% less than the last year. For next coming three years it will be increased by nearly 4% continuously. In year 2013, the business of Primark will be increased their business by 4%.

ADVANTAGES

· Business can be going on 24 x 7 days a year.

· Increase the number of sales volume

· Well managed store all the time

· Less staff recruitment.

· Increase the Profit because less money spends on training and development.

· Easy publicity of the product and name.

DISADVANTAGES

· Less rash of people in store.

· Promotional things cannot be sell easily in particular stores.

· Customers are not feel that secure as store shopping.

· Chances of the fraud of credit cards and bank details can be effect the reputation of the company.

Table 2 : Advantage & Disadvantages of online shopping service at Primark

CHAPTER – 3
METHODOLOGY

This chapter described the methodology used to address the research issue . A summary of the methodology is then presented to provide the platform for the research. The methodology best suited to achieve the research issue aim is then affirmed, alongside discussion on other methodologies and why they were not felt appropriate for utilization with this research issue.

3.1 Research Definition

Research is not just a process of gathering information, as is sometimes suggested. Rather, it is about answering unanswered question or creating that which does not currently exist. Burns, (1994:2) defines research as ‘a systematic investigation to fins answers to problem’. Bulmer (1977:5) states ‘Nevertheless sociological research , as research is primarily committed to established systematic, reliable and valid knowledge about the social world’.

Type of Research

Research can be classified from three perspectives

1 application of the research study

2 objectives in undertaking the research

3 inquiry mode employed

The researcher research is contain descriptive research type which is regarding the new service for the Primark company which has not any online shopping service. So the researcher will start new online shopping service at UK Primark. To finish this research the researcher need both kind of data qualitative data and quantitative data. And some of the data in both of categories contain primary data and secondary data.

3.2 What is the Qualitative and Quantitative research

Academics confirmed that, in the main, two different research areas were distinguished: quantitative research, and qualitative research, (White, 2005; Saunders et al., 2007;Fisher, 2007). Quantitative research involved an objective way of studying things, whereas a qualitative approach assumed this was difficult and that the research was subjective, as the research issue clearly was in this instance.

Distinctions between Quantitative and Qualitative data

Quantitative data

Qualitative data

* Based on meaning derived from numbers

* Collection results in numerical and standardised data

* Analysis conducted through the use of diagrams and statistics

* Based on meaning

* Collection results in requiring classification

* Analysis conducted through the use of concepetualisation

Table 3 : Distinction between Quantitative data and Qualitative data

sources Dey (1993)Harvey and Rawlinson (1994); authors experience, Adapted from Sunders M., Thornhill, Lewis, (2009)

3.3 Primary and secondary data

Researchers usually start by gathering both the type of data Primary data and secondary data. But most probably first researcher would like to start collect the secondary data. The secondary data can easily available. According to Kotler, Armstrong, Wong & Saunders, (2008) Secondary data consist of information that already exists somewhere, having been collected for another purpose. Primary data consist of information collected for the specific purpose at hand. Secondary data can easily available because company can buy that from anywhere. It is provide good starting point for the research and also help to define research problem and objectives. Primary data need to make sure that it will be relevant , accurate, current and unbiased. Primary data collection calls for the number of decisions on research approaches, contact methods, sampling plan and research instruments. Secondary data is more quickly and available at lower cost than primary data. Sometimes the secondary data cannot be collect by the individual company on its own. Primary data include observation, survey and experiments which is relevant people, actions and situations.

3.4 Interview Technique

The interview is a qualitative tool of collecting primary data. There are various kinds of conducting interviews such as in-depth interview, semi-structured interview, group focus interview, structured interview, elite interview, ethnographic interview and phenomenological interview. The interviewers can adjust and rearrange questions according to the flow of the conversation. Moreover, there are mainly two types of interviews that can be taken up any researcher which are telephone interviews and personal interviews. Telephone interviews are used extensively is low cost form of personal interviewing that can be used to obtain information quickly. Administration of this approach is easy and has less interview bias problem. However, there are no human interactions, which can lead to interviewer bias or careless behaviour. However, to some extent personal interviews are also been used along with telephonic interviews. We would be conducting semi structured interviews as it suits exploratory research design.

3.5 Qualitative Data

The researcher find this all the qusalitative data of strengths weakness, opportunities and threats of Primark by visiting the stores and observing the behaviour of the customers and staff and the management. The SWOT of Primark is highlighted in the table below:

STRENGTHS

· Most Primark stores are on high streets or shopping malls

· Prices are reasonable

· All stores have large trading space.

· Good interiors, decor and proper signage

· Experienced retailer for over more than 40 years in operation

· It provides recyclable eco-friendly bags

· Frequent locator and international coverage

WEAKNESSES

* No online shopping facility available.

* Weak public relation campaigns

* Shops crowded and services are not up to standard

* Mismanagement of clothes and accessories

* Dependent on suppliers

* Less promotional activity for stores and company

* Less number of fitting rooms

OPPORTUNITIES

· Primark can introduce their own store card

· Have an automatic self scan area

· Introduce new section like kitchen range, fragrance etc

· Primark can introduce a refreshment area/cafeteria

· More advertisement and promotion; Tie up and links with various other shops

· Give more range for 35 years and upwards

· Can introduce variety supplier and talent

· Online shopping can also be introduced

THREATS

* Unethical practice may jeopardise sales

* Price competition

* Inflation & recession (decline in consumer confidence/low disposable income)

* Other store selling for like products e.g.: H & M, Matalan, Tesco etc.

Table 4 : Fieldwork Primark SWOT Analyse
3.6 Quantitative Data

The researcher was fortunately able to arrange some interview with some of the Primark managers and customers. The interviews contained both negative and positive replies. However most of the responses were positive.

3.6.1 Manager’s questioner interview

The below primary data shows what are the opinion of the managers about the online shopping service in UK Primark. All the managers have similar view about this innovation skip to some of them. They are appreciating this innovation. The researcher was arrange 8 interviews with different different Primark managers like Lakeside, Watford, Harrow, Oxford street, Hammersmith. Interviews with the managers give the following responds to the researcher:

The first part of the manger’s interview questioner is (q1,q2,q3)give the idea about how much they are popular in the market. Averagely their is 10000 to 15000 people visit the store on a day to day basis. And the average spend per person is nearly £10 to £12.

Second part of the manager’s interview questions (q4,q5) give the information about the company profit how much profit they are making ob year on year, their profit 112% on annual budget since inception 2006. In this credit crunch situation market is facing trouble but still Primark is increasing their profit on same level.

Furthermore the third part of the manager’s interview questions (q6, q7) provides the details about competitors of Primark in the market. Due to the market situation Primark is the most famous retailers for like for like sales. According to all the managers opinion, competitors are New look, BHs, M&S, ASDA, Tesco and so on. Primark also prove itself as own their original Moto ‘Look Good, Pay Less’. So many managers says that the Primark is the only one place where people can just get scoks for £2, pair of Men’s jeans for £8, and lots of thing people can find for very cheap price at Primark. Even whenever you pass though the high street you can see that most of the people hold Primark bags.

Last part of the manager’s interview questions is part four(q8,q9), which is give us the information about the feasibility vice the online shopping service is good for the company or not. According to my all the 6 interviews with the managers like supervisor managers to HR managers. 70% response for the online shopping service UK Primark is positive, but 30% said that the company is not that much able to introduce the online shopping service.

Furthermore interview with the managers showed that Primark is likely to benefit from the introduction of an online shopping service for their customers. Because the company can save the money and can make the money by introducing the online shopping service. Different ways to save the money due to the managers like the need less staff inside the store to manage the store clean and tide-up. Another reason is they need less HR expenses like less training, recruitment and soon. Primark can run their business for 24 hours, and make more money with fewer resources.

3.6.1 The second questioners survey of Customers

The researcher did the survey of 50 people from the different part of the London. Thus survey also divided in two different groups Male and Female. Like Harrow, Hammersmith, Hayes, Uxbridge, Ilford and soon. The researcher was make 10 number of questions for the customers to get the positive or negative response to his/ her research. Each questions gives positive answer to the researcher just skip to the some.

Furthermore, the researcher get the reply with the Q1, is about how frequently the customers are visiting the Primark, and the answer is positivistic and 100%. To added some more, all most people visiting a Primark one’s a month but some people who are visiting Primark more than one it means they visit Primark twice , thrice and fourth. Going towards Q2, which give the ideas about people are shopping from the Primark is planned or unplanned? The response to this question is neutral like 24 people said it is unplanned shopping and 26 said it is planned shopping. The third question also gives the common opinion of the people about with whom they would like to visit the Primark. The researcher gets variety of answers in different kind of options like friends, family alone, others. According to the response most of the people prefer to visit the Primark with friends the survey gives number out of 50 people 24 prefer to visit the Primark with the friends. Second highest number for the family which is 12. At last very less people prefer to


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