Wednesday 27 January 2021 3:00 pm

Debate: Will digital retailers continue to hoover up high street chains?

Boohoo’s purchase of the Debenhams brand, and Asos’ pursuit of Topshop, suggests that the online revolution has very much succeeded. But is it that simple?

Vicky Bullen, CEO, Coley Porter Bell says YES

You don’t have to be Mike Ashley to spot the enormous opportunity in online retail since the coronavirus pandemic hit. Never before has it been so important for brands to provide an immersive, seamless and truly branded online experience for their customers. Those that don’t risk becoming another high street casualty. 

Boohoo’s acquisition of Debenhams on Monday resembles a game of Pacman – the nimble digital retailer swallows up the less agile competitor to add more strength to its offering.

For Boohoo, taking on a trusted, heritage brand like Debenhams is a smart move to earn back consumer confidence following questions about the environmental impact of its fast-fashion business model and workers’ rights. 

Combining a much-loved department store with an agile, digitally savvy retailer also extends the reach of Boohoo from Gen Z and below to a much broader base.

Debenhams, like many of this year’s failing retailers, were laggards when it came to digital transformation. I think we are likely to see more of these former challenger brands eating up the former leaders that have relied on their heritage and failed to get on the transformation roadmap. But for the sake of the retail industry, these mergers are far better than letting businesses simply go to the wall. 

Wales Ends 'Firebreak' Lockdown
Shoppers queue for Primark, one of the high street stores which has resisted going online (Photo by Matthew Horwood/Getty Images)

Joe Stubbs, Vice President, Global Brand at Interbrand Group says NO

This isn’t just a story about how we buy – more essentially, it’s about what we buy. The bigger high street brands have undoubtedly struggled to stay relevant over the past decade – a trend massively accelerated in 2020, during lockdowns. Time and again we’ve seen incumbents struggle, most noticeably in digital spaces, but more critically with product and inventory.

Online retail offers an abundance of choice. It’s little wonder the smart and agile online brands have scaled rapidly, beating out long-established names, which often seem tired and ‘dull’.

Fast fashion retailers have innovated every aspect of the supply chain – from sourcing fashion to selling it. And it’s no surprise with the shift to digital commerce, that companies like Boohoo are looking to broaden their appeal. That said, in buying the brand but dismantling the business and closing stores, Boohoo is hardly endearing itself to Debenhams’ current customers.

We are in the age of the ethical consumer. Concerns around brand ethics, sustainability, and diversity credentials are leading customers to make more educated decisions. And digital retailers have tended to fall short over the years when it comes to business practices. Boohoo’s decision to treat its acquisition of Debenham’s like a pick’n’mix ignores the broader value that high street stores provide to these key, target demographics.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.