- FashionUnited |
Although the majority of mass market fashion retailers attribute part of their ongoing success to their strong e-commerce arm, there is one player which stands out amongst the crowd, succeeding without the aid of an online store: Primark.
However, even though Primark lacks an online store it has managed to create and maintain a strong online presence through its social strategy, known to most fans of the brand as 'Primania.' By engaging with its followers through its online platform and social media channels like Facebook and Instagram, Primark is able to promote online brand recognition and promotion to a wider audience.
But, is this strategy truly more effective than running an online store? Or would Primark be better off stepping its toe into e-commerce? FashionUnited took a moment to investigate and shares its findings in the chart below:
Based on our calculations, if Primark does launch an online store this year it will only become profitable in its fourth year of existence, generating an approximate income of 365 million dollars. However, if Primark does open an online store it will also cause a negative impact on its overall profit margins, as the start up costs and operational costs of running an online store will cost Primark a total of 2.4 billion dollars for the first three years. After this point, overall revenues are likely to keep increasing, which means it will take Primark a total of 5 years to earn back the initial investment on its online store - if all goes well. Therefore, in spite of increasing appetite for shopping online launching a digital store remains a risky step for Primark to undertake.
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