‘Brand awareness not enough to switch from off to online’

Brand heritage is not enough to successfully move a high street brand online only. However, if affinity for the brand is allied with a bold creative strategy a brand that has floundered on the high street can go on to thrive as an e-tailer.

myleene klass
Myleene Klass in Littlewoods ad. The retailer’s move to online only is seen as a success.

Last week, John Roberts, CEO and founder of web commerce site Appliances Online, tabled a seven-figure bid for Comet that could see the electricals retailer saved from administration and revived online.

Roberts told Marketing Week that it is the Comet brand’s “synonymous” association with retail and its existing web traffic that make it valuable. The brand would need a “careful” relaunch though, he adds.

“The big question is whether the equity transfers online. Comet’s online sales mix is undoubtedly awful. However, we see that as a huge opportunity if it is driven by a business that understands online, can exceed customer expectations through outstanding service and knows how to maximise the huge traffic that the brand generates.”

Deloitte is acting as Comet’s administrator but was unable to comment on any potential bids. It is thought that a bid for the majority of Comet’s 195 UK stores has also been made. A number of stores have already closed.

Comet would follow in the footsteps of brands including Woolworths, Littlewoods, Zavvi and Dixons in moving from the high street into e-tail only.

One of the most successful examples of a high street brand becoming online only is Littlewoods, which is owned by Shop Direct Group, which also owns the Woolworths brand.

Woolworths went to the wall in 2008. The brand was bought by Shop Direct Group and revived as an online only e-tailer in June 2009. Shop Direct closed 126 Littlewoods stores in 2005 in response to the growth of its online business, rather than as the result of administration.

Gary Kibble, brand director at Shop Direct Group, says online retail brands must invest in “more creative” marketing to maintain the visibility they enjoy on the high street and not be forgotten in order to make the transition to online only.

He adds: “On the high street people are used to a certain way of doing things but online you have to be courageous and make big bold decisions outside your comfort zone.”

Neil Saunders, managing director of Conlumino, agrees: “There’s always a danger with going online only that you get forgotten so you’ve got to spend a lot on marketing, advertising and promotions to make sure people come to you as there’s lots of competition. Comet could lose out in the brand hierarchy  so can’t just take the same marketing approach they have now. They’ve got to really think about it and add more creativity.”

Andy Mulcahy, head of communications for e-tail industry association IMRG says that although residual brand equity will provide e-tailers with a start, it will not be enough to build a long-term successful business.

“There’s a requirement to have a clear severance with the past and make sure people know that it is starting again as a modern customer led business that has an understanding of what modern consumers want, ” he adds.

Becoming a pureplay retailer is not as simple as it was five years ago, analysts warn, and it’s likely that Comet may eventually have to reintroduce an offline element to satisfy demand. Mobile and click and collect have blurred the lines between offline and online and for most retailers multichannel is the only way to ensure growth.

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