EDITORIAL How retailers are adapting ecommerce and multichannel strategies for a cost-of-living crisis

In today’s InternetRetailing newsletter we report how the The latest official figures show that retail sales fell both online and across all sales channels in August.. Shoppers appear to be cutting back in everything from food to home goods, the latter especially online. These cuts, says the ONS, seem to respond to price increases. Inflation, as measured by the Retail Price Index, is currently 12.3% above last year. Their figures suggest buyers are now spending more to buy fewer goods than they were a year ago, reflecting the effect of inflation and also suggesting a move towards reduction.

It’s in that context that we report on what multi-channel and e-commerce retailers are seeing from their customers, and the strategies they’re taking in response.

THG (The Hut Group), which reports half-year sales of £1.1bn, is taking steps to keep price increases below inflation, while prioritizing customer acquisition and retention for its beauty, health and wellness brands. This will deal a hit to profitability, and pre-tax losses have already widened over the past six months. The company has also seen the number of e-commerce websites it operates for third-party brands grow.

DFS says it will continue to invest in digital and in storesdespite a hit to full-year earnings caused by “unprecedented” supply chain disruption and a continued decline in new orders in an uncertain economy.

Wickes says that a reputation for value, coupled with an increasingly convenient digital experience, is helping to attract buyers., especially from the commercial sector, where his research suggests that a significant number of companies have good sources of work. He continues to invest in using digital to engage and serve customers, saying the home improvement market remains attractive at a time when more people are still working from home than before the pandemic.

John Lewis and Waitrose also aim to keep price gouging low and their products affordable. Waitrose, in particular, is seeing buyers move between ranges as they look to stretch their money further. The company has more buyers, but those buyers spend less. Parent Company John Lewis Partnership shares insights in semi-annual numbers on how shoppers are buying now in the wake of the pandemic and how the cost of living effect is feeling – and shows an interesting reversal in the proportion of sales that were made online and in-store in the first half of the year.

Elsewhere, Amazon is running a pilot allow direct-to-consumer sellers to use Amazon Prime to drive shoppers directly to their own e-commerce websites. The Buy with Prime pilot program was announced at Amazon’s annual seller conference this week as a way for sellers to offer Prime shopping benefits to customers who shop on their own websites. It may also be useful as a way to push Prime membership even beyond current levels at a time when the retail and tech business is raising the price of that service.

Some retail brands, however, are thinking about profits in an entirely different way, as a way to advance environmental issues. We reported this week that Yvon Chouinard from Patagonia has transferred the multi-channel retail brand it founded to a ‘purpose-driven’ state to dedicate its profits to the fight against climate change.

The move comes nearly 50 years after Chouinard founded Patagonia as a climbing gear company that has since grown into a multi-channel sportswear brand selling around the world. He became a Certified B Corp and California Benefit Corporation in an effort to change the way business is done, before changing his company’s purpose in 2018 to: ‘we’re in business to save our home planet’ . All that, says Chouinard, was not enough, and that is why he has now taken this new action.

In today’s guest comment, Sue Azari by AppsFlyer has examples of how retailers are using mobile devices in store

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