Next online closure is e-tail tipping point says analyst

By

Sandra Halliday

Published
Mar 27, 2020

Thursday’s decision by Next to close its online retail operation temporarily could be a tipping point, analysts are saying, with more retailers likely to follow suit as they respond to worker concerns over social distancing.

Patrick O’Brien, UK Retail Research Director at GlobalData, said that “Next’s decision is likely to reverberate across the retail industry – and many warehouse workers at other retailers will question why they have not been furloughed to protect their safety”.

Next’s large size and strength in UK e-tail make it something of a standard-bearer for other retailers and that means its decision to go off-line (for now) could be hugely influential.

River Island and TK Maxx have now joined Next, as well as Net-A-Porter, Schuh, Moss Bros and more, in closing their e-stores.

And as demand for fashion continues to fall “we expect other retailers to follow suit, unless they can find a way to operate warehouses safely,” O’Brien added. 

“Currently Marks & Spencer believes it can do this, but it and other retailers of non-essential goods will be under pressure from concerned staff.”

While demand for fashion product was expected to be low anyway during the lockdown, as consumers won't be able to go out, retailers had been hoping that their online operations could partly counteract store closures during the three-week minimum period that non-essential stores have to be shut for.

But if more and more retailers decide that it's not practical to continue operating online, then this sales avenue will be closed off.

That said, some of the big names in online retail, such as Asos and Boohoo, are continuing to operate and other multichannel retailers have returned to selling online after temporarily shutting their webstores. Budget homewares retailer Dunelm did temporarily close its online operation but has reopened it for a limited number of items. It cordoned off parts of its warehouses, and implemented more detailed safety procedures.