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Tim 26 Jan 2012

Why online retailers are now better placed

By Tim in Technology news

It came as no surprise this week when online retailer Kiddicare announced it was to make big strides into the physical retail world by moving into 10 stores across the country previously inhabited by failed electronics outlet BestBuy.

The brand established in 1974 actually realised true success for founders Neville and Marilyn Wright in the early 1990s as an internet sensation, supplying baby goods and toys to bargain hungry parents and parents to be. So successful was it – growth of 75 per cent in the three years to a turnover of £37.5m in 2010 – that supermarket group Morrisons bought Kiddicare for £70 million last year. The Peterborough-based firm came with a strong customer service reputation and a distribution system that many online retailers even struggle to match.

The purchase led to small Kiddicare concession kiosks springing up in several supermarkets, which have obviously proven successful. The largest supplier of nursery-related goods in Europe now may just become a bit bigger as it takes on established physical retailers like Mothercare and Toys r Us at their own game. Yet why when those brands appear to be struggling – Mothercare reporting falling sales – does Kiddicare – and most of the experts think they will do better in the current economic climate?

It would appear to be the strong foundations of customer service and slick distribution. In the era of social media, poor service gets around fast and with a poor reputation many brands won’t even get a second look. What people in the modern world expect is being able to order or buy goods with ease and without hassle. If that works, customers remain loyal. While Mothercare and Toys r Us have themselves also ventured into the online world, they seem to be plagued by poor reputations for service and despatch if the forums are to be believed. Young parents are amongst the busiest and most vocal on social networks and it appears Kiddicare has treated them well or at least not upset them as much.

The ever changing nature of the internet means those operating online first are often wiser to many of the potential pitfuls and thus battle-hardened to cope better in the physical retail world too.

Kiddicare appear to be the first big name to try this in 2012 but with more an more physical retail space becoming available as traditional businesses fail, expect a few more to follow in their footsteps. Will Amazon ever create a physical outlet? Possibly not as books are amongst the most expensive items to store and transport but after Ebay’s pop-up shop venture last Christmas, never say never.

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