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“There’s an initial capital investment needed to open a dedicated warehouse or fulfillment centre too. When you layer all those costs together, you have to then assess whether a return on investment is able to rebate.” PwC recently published a retail and consumer report that surveyed 1,000 people about their online shopping habits. It found that the majority of online shoppers – some 77% of respondents – are willing to pay for same or next-day delivery. It also suggested that free returns have become the norm for most consumers. Both services are expensive for retailers to roll out and add a layer of complexity to their business. Dee Duffy, a lecturer in retail and fashion studies at DIT’s College of Business, says postage and packaging costs alone are a strong enough deterrent for so-called fast fashion firms that sell at discount prices. “If you think of a T-shirt for €5, by the time you’ve paid postage and packaging, you’ve just doubled the cost of the purchase,” she says. Five years ago, Primark-Penneys trialled a web service with Asos but shut down the offering because shipping costs were too high. That said, Duffy reckons it’s only a matter of time before the chain moves into selling online. She thinks the retail giant won’t stand for losing ‘something-for-the-weekend’ shoppers to rival Boohoo.com, which has managed to sell items for as little as €15 to 16-30 year olds and still make a profit. “(Penneys’) teen market doesn’t really have access to credit cards to consume online, but they do have their mid-range millennial market, which is a valuable market,” Duffy says.
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