Physical Retail Isn’t Dead: The Fightback Against Online Players
We recently published a blog by Luke Winchester on everything you need to know about online retailers when you are a storefront owner. In that blog, Luke talked about how the COVID-19 pandemic has affected owners without an online presence who are competing with online-only companies. The online-only retailers, including Redbubble, Kogan, Temple & Webster and others, reported several recent market updates related to post-COVID pandemic lockdowns. Most of the headlines related to these companies reported a decrease in growth when compared to results at the beginning of the pandemic. This may come as a surprise, but it seems to indicated the increasing overhead required for the online retailers
to produce income. This may become an increasing concern for financial advisor central coast as the global retail industry attempts to bounce-back in a postpandemic world. An Investment Plan As a leading financial adviser in Central coast area, Oracle philosophy on investment is to invest in companies that are sustaining their top line as they grow and are continuing to show an increase in revenue. The Oracle Emerging Companies portfolio shows that we at Oracle have attempted to cut out retailers with an online presence only and instead invested in retailers with many channels, including online and a physical store presence. Businesses with omni channels are able to grow their revenue and maintain margins over time. For example, Premier Investments, led by Solomon Lew and the owner of Just Group with brands such as Just Jeans and Smuggle, and Lovisa Premier, a jewellery chain, are two such examples. At Oracle, as the local financial advisor central coast, we expect a strong result from Premier Investments after reading their mid-year report. Because Premier is an omni-channel retailer, it was able to shift when the pandemic first hit by closing stores that were not performing well and reducing overhead costs by negotiating rents with landlords. See the gross margin table below, showing Premier’s 2021 mid-year results. The chart shows how Premier was able to rise above a difficult spot brought on by the pandemic. Wrapping it Up
As your Oracle financial advisor central coast, we are committed to providing you with the latest, best information. We prefer investing in the omni channel retailers over online-only retailers. Online retailers will continue to face increasing pressure as market costs rise. Tech companies will continue being the go-to brands that Australians turn to, and that makes competition intense for online retailers. We can all blame the COVID-19 pandemic for crashing many markets, but the omni channel retailers continue to be stable and even increase in profit margins.
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