Woolworths back in business online

Woolworths, the iconic peddler of pick ‘n’ mix, is staging a slight return online. But can it succeed in cyber space with the same product lines that helped it go bust on the high street?

The Woolworths we know and love fell into administration late last year with debts of £385m. Companies waded in to buy Woolworths’ most valuable assets including the brand name, snapped up by Shop Direct Home Shopping for around £5m.

Now it has ‘recreated’ Woolworths’ shopping experience as Woolworths.co.uk, where you can purchase Ladybird kids clothing, games, books, CDs and, of course, pick ‘n’ mix sweeties.

The question is, how can this new entrant to the market (for that is what it is, despite the old name) compete with dominant and established online players such as Amazon, HMV, Play and CD Wow? 

To my mind the answer is: it can’t.

Take the kiddies clothing for example. Supermarkets were already taking chunks out of Woolworths’ Ladybird brand because parents could pick up a few items conveniently along with their weekly shop. This fact hasn’t changed.

The CDs, books and DVDs are priced in general slightly higher than Woolworths.co.uk bargain basement competitors. Online is a battleground of value and the popularity of cost-comparison websites mean only the cheapest brands survive.

Meanwhile, even the much prized pick ‘n’ mix won’t have its old pulling power for customers. It served as a spontaneous extra purchase for people who entered the store to buy something else. People rarely went in specifically for pick ‘n’ mix. The model works less well online than it does in the real world.

So Woolworths online has two main things going for it: its brand name and its lower cost base compared with the physical shop chain. But will this be enough?

A much better model is Wellworths, the independent shop started by former Woolworths store manager Claire Robertson. She bought and spruced up her old store, stripped out the old tired product lines, re-hired her staff and turned her already profitable shop into a retail powerhouse.

The business has just celebrated serving its 100,000th customer. I wonder how long it will take Woolworths.co.uk to achieve the same milestone.

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By Dan Matthews  on   Jun 29,2009

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Keywords

Woolworths    online shop    Wellworths    Woolworths collapse   

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