You can’t read their tweets, pin them on Pinterest, see them on Instagram, watch them on YouTube, or circle them on Google +.
They certainly don’t engage in any Pay Per Click advertising and you can’t even buy their products online. They do have a website (thank God!) but it’s basic and more interested in talking about ethical business standards than actually selling the company’s products.
So who are we talking about? A small local retailer probably springs to mind. However, the answer couldn’t be further from the truth.
The company in question is Primark (or Pennys as it’s known in Ireland) and the clothing retailer has just enjoyed another “outstanding performance” during the past few months, according to its owner Associated British Foods (ABF). It expects total sales to be up 23% in the six months to 2 March, while like-for-like sales – which strip out the effect of new store openings – are set to be 7% higher. And last year its sales jumped 15 percent to stg £3.5 billion pounds.
The chain has been expanding rapidly over the past few years too. It opened 19 new stores last year, taking its total to 257. Its expansion into Europe has seen it open new stores in Spain, Germany, Austria, Portugal, Belgium and the Netherlands to add to those it already operated in Ireland and the UK.
It is also faring much better than rival clothing retailers. Over the crucial Christmas trading period, like-for-like sales at Marks and Spencer fell by 1.8% for example. Meanwhile, the shares of ABF have surged 16 percent this year, beating H&M’s 4.3 percent gain and a decline of 1.7 percent at Zara’s Inditex.
What’s truly remarkable is that all of this success has been achieved without any type of explicit digital marketing strategy or social media engagement by the company whatsoever.
Yes, as already mentioned there is a website, but it’s ridiculously basic and doesn’t let you buy anything online. Primark does have a Twitter page but it’s a fan page run by lovers of the brand and not the company itself. It does have its own Facebook page but its 500,000 or so ‘likes’ pales in comparison to Zara which has over 16 million. As for Instagram, Google +, YouTube and Pinterest…forget about it. Primark probably doesn’t even know or care what those sites actually do. And it definitely doesn’t do PPC advertising or online banner ads either.
So… why the lack of online engagement?
Well, the lack of digital marketing hasn’t hurt the company so far. And as the old saying goes: if it ain’t broke then don’t fix it. And Primark has no plans to fix this anytime soon. It makes no apologies about its Web strategy and has no plans to add online sales to its site either.
Secondly, developing an online business isn’t easy or cheap, according to Mark Hudson, a partner in the retail practice at consultants PricewaterhouseCoopers. It requires a supply chain flexible enough to handle the demands of large flagship stores alongside small online orders, and smart enough to give timely, accurate information about whether an item is in stock or not. Processing an online order for clothing typically costs retailers between 5 and 15 euro so customers need to buy enough to offset that.
While Inditex is “extremely profitable online”, stores where customers don’t spend as much per visit, such as H&M, are less profitable, according to Credit Suisse retail analyst Simon Irwin. The average spend at Primark, home to thousands of products for less than 10 euro, is even lower than that at H&M.
Finally, while social media may work well as a channel of communication, a recent study from Forrester Research suggests it does almost nothing to drive sales. As a result, Primark might feel that the relentless focus by companies on social media and Web 2.0 technologies is unjustified.
Whatever your thoughts, the continued success of Primark and their unorthodox digital strategy in this post-internet era is fascinating. But should the company continue to do what it’s doing or will it succumb to the social media and digital marketing game eventually?