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The point isn't internal tbh P it's more the payment of hermes etc to bring it back
Also your point re shoes and clothes isn't always true as I'd return shoes that have been tried on as they get that crease across the front!
SP is blue. something is not right this morning.
Is it easier to sell a card or a pair of shoes or a protein shake or some beauty product online than a sparkly dress or a pair of jeans? The actual marketing and fulfilment of the products might be different but essentially knocking out the product to the customer is probably very similar in terms of its ease or difficulty.
However the returns side of things differs somewhat in my opinion. If I see a photo of a card and a description giving accurate dimensions I already know what I will get when it is delivered. Same goes for a protein shake or a beauty product. Sure a protein shake is a bit more subjective than a card and I might try once and never buy again or return a product because it isn’t what I was expecting it to be but once I’ve found a brand all future purchases I can expect to be as described and therefore not likely to return.
A pair of shoes are easier to manufacture to a standard recognisable size than a sparkly dress or a pair of jeans but anyone who has ever purchased shoes will know that sometimes it’s the size up or down from what you thought that fits you perfectly. If you sell shoes on line you can expect to ship two or 3 pairs of the same shoe to a customer and have the ones that don’t fit returned at least until they have purchased enough product to know and trust your sizes. That said processing of shoe returns is considerably easier than processing of clothing returns. Check the product sizes match (a lot of people try to bag different sizes shoes to match their having one foot a half size bigger than the other!), check they haven’t been worn outside, repack and shove back into stock.
Clothing needs to be more thoroughly checked, sometimes pressed, always refolded and repacked properly (which takes longer than repacking shoes) and then put back into stock for resale. In some cases it’s just easier and more economical to dispose of a returned garment through an alternative source rather than put back into stock.
So returns are certainly an issue for online or multi channel businesses and one has to be good at processing returns and forecasting future returns (analysis of wrong size or pore quality reasons for returns need to be acted upon to prevent future returns of same or similar items) but the rate of return and the ease of processing will be different for different products and the likes of card factory or certain hug group products will not experience the same level of returns as say shoes who in turn will experience an easier process than clothing.
Doesn’t matter. There’s a buyer for all things
Point is is that’s shoe zone customer won’t travel twice as far to return a pair of £10 shoes if the double bus fare is £10 also. Easier just to drop off at a Hermes depot or Royal Mail etc when you’re doing your supermarket shop
Is it easier to sell a card or a pair of shoes or protein
Just give any example in detail where bigger store means bigger catchment. As I say works for something like bichester village or Burberry but not a shoe store
It’s common sense!
So what do shoes profits look like when you add in £30m plus returns?
Card and Shoe never wanted to do online. They have both fought it for years but now realise they have to so now they will end up “stuck in the middle” as they try to be both
In theory as long as the % of returns stays flat yoy then no you don’t care as that will be an equal weighting with revenue so a flat impact
With boohoo it’s elevated once and cause and issue but all through covid it depressed and created a windfall
Shoe won’t disclose the returns figure. But the story from Zeus (and the bit you hadn’t clocked on to) is that only works with 400 stores. But now 50% at least will be expensive online returns
So you’re excited on a chat that in reality isn’t holding true and somehow feel great?
Odd
Kallu this is waffle
Step out of the cave, it’s fine honestly.
There is some guff on this post - SHOE and Primark are awful businesses. It’s rare to see good brick and mortar retail companies and those that are usually trade at huge multiples - look at Costco. The online market will continue to grow and take market share from a dying high street, which is in terminal decline and at a competitive disadvantage in terms of cost and flexibility. I think Primark will survive a few more years as it’s popular and convenient for the great unwashed who sleep in the high street and have a spending limit of £4.50.
This whole paragraph is waffle. I never said anything to say your point on the store rent was wrong
The point you said was “bigger store = bigger catchment area” which is nonsense and why you haven’t pushed back on it
Then you say you only go where you can see the figures but then say you’ll follow them to multi channel based on trust?
Well your figures haven’t adjusted for online returns (which will happen if you win new customers (or there’s no point being online) and 2) when you close half the stores and people can’t return there)
Also then you have the extra cost of doing online properly which Card has at £30m but this has 0 returns so have you adjusted for the figure you can see (cost of proper online) and then the extra fixed costs for returns processing?
No you haven’t
Shoe might seek twice as many shoes as Debenhams buy if they are 1/6 of price that’s not that great
Also Asos does have proprietary tech. It’s full of it TGR for a start. Also they own and built all the interfaces which is the hardest and value add bit
You see this by how much easier and faster Asos shopping is. Try it. You might get someone to talk to you rather than dressed in Primark and £7 shoes
That’s not right though is it? A 40m stores doesn’t have a wider catchment area than a 20m store
It’s just doesn’t unless it’s like a mega flag ship or in a volume tourist place like Burberrys hq on regent st I bet most shoppers aren’t English but that’s because it’s located in London and burberrys flag that tourists visit.
Because a Swansea branch of shoe is now twice the size doesn’t mean people will go twice as far. As that means twice the inconvenience and twice the public transport costs all for what? Shoes I can get online now at the click of a button?
So you lose stores your online grows but so will online returns as people went to their local shoe store but why travel way out when there’s likely a Hermes or return function in the local town where the shoe used to be
Twice the stores doesn’t mean twice the catchment area. So shoe will have to hope those shoppers buy online and then they will have to get ready for returns
Shoe is a good company but as is clear from the above they are heading into omni channel and the days of customer walking into store to return won’t be happening anymore soon
And returns via post for the customer aren’t free at shoe
Given Card say it’s costing £30m annually to go online and you’re saying a shoe site is £30k - £50k it seem odd they’d ever go online? Better staying what they are good at as the online cost base is going to swell (Card £30m annually and they don’t do returns! They don’t have to really to stock as it’s print on demand)
"I had a chat with Zeus SHOE's investment relations people they had the following to say,"cost of returns are minimal, as most are returned to the shops and either re-sold or returned to the Dc in Leicester on the empty trucks delivering the stock to store"
Fine but that won't always be a the trend as if so you're only selling to customers who live local to a store so in fact that's rubbish as you're not gaining new customers your just cannibalising store customers
So therefore less reveneu in stores which still pay the same fixed costs
What you want to see is that customers online return online as then you're opening new customers (those not near a shop)
So it's not quite as it seems. The cost of the return is low in your scenaio0r but the cost of the store is more expensive (as less reveneu)
Kallumama what basis your posts, all i see is waffle and a self opinionated time waster, get a life .
Fundamentals, conviction hold and not listening to shorters that turn up and whinge all day on LSE. But you know that Kallu, otherwise you wouldn't be here, chipping away.
That's me done, skint for the weekend after topping up twice today.. £50k average @ £1.89.
Sit back to 2 years and collect at near £4.
Hopefully £100k by then...
See you all in 2 years time . 2024..
Kullomoaner…you really are orbiting in your own little word. This is THG char room sweetheart, you need to go to the SHOE one
Can someone help granddad find his way there …
"You are trying hard here to sell THG's usefulness but the bottomline is cardfactory should not be doing online at all, it's not possible to make under 1GBP products profitable online"
Totally agree and as soon as Card said "omni channel" I sold all my stock as you can't be both until you get to huge scale (JD and Next)
But THG could sell £1 cards online profitably as we sell ingenuity which in theory in future means we will have no cost base as the cost base is a revenue generating asset - madness I know
Also salesfore etc is only on element of the stack you need to think about the rest
Also returns for a card isn't a factor
Yeah Shoe probably wouldn't work online it sells to the very poorest in society these people likely don't have access to internet or live in a environment where delivery of a parcel is safe. Shoe doesn't disprove anything it's just differnet
Like selling a boat online wouldn't really work
I heard because the government brought in ir35 contractors want a lot more pay and are simply refusing to work and leaving the country in some cases. Makes sense a plumber isn't inside ir35 why should IT be?
IT expertise. is getting more and more expensive (salary wise ) ....demand for IT specialists outpacing supply
That depends on the scale of the work needed. And SME would have to fork out several £10,000s, a company of the scale of Card Factor would probably have to spend anything between £ 500k to 1-2m.
Anything created to be a proprietary software would also cost more at the outset because the coding is largely from scratch vs and a pre-coded existing platform that only needs customisation.
And there is also the need for QA testing that adds weeks (months?) - this is not just staff cost but also the cost of loss of business opportunity.
That's why "doing it oneself" is not always economical, unless one is a mega company with existing staff with IT expertise.
Any idea how much 'good' developers cost?
But on this it just shows what THG could do
Website a tonne of your designers and boom - moonpig
Even if we took half of what Card Factory was doing it would be a win
Today came out and said they will be adding £30m of annual costs to get their online proposition going!
Just mental but it shows how expensive it is to do online right. And they probably have a far easier logistics element given the finished card goes straight in the post and printed on demand
But why on earth aren’t they using ingenuity?
£30m a year that they don’t have and revenues aren’t there yet. The ego of management teams to not use ingenuity is laughable