British budget shop Poundland hopes to prove that e-commerce can work for any product price by introducing its online shop.
The shop, with branches around the country, famously sells every product for £1 and now it has announced that it will sell 2,000 items online.
Ironically, even though the products cost £1, there will be a £4 delivery charge, unless the customer orders £50 of goods, in which case delivery will be free.
E-commerce fulfilment has always been an issue for companies selling low-ticket items, but Poundland hopes to show that firms selling budget products can still make the most of the online marketplace and envisages customers placing substantial orders to amortise the cost of delivery.
Other value retailers have been hesitant to embrace e-commerce thanks to the high cost of entry and other problems such as keeping ever-changing stock available at the e-commerce fulfilment house. Increasingly flexible website management, stock levels that can be monitored in real-time thanks to cloud computing and Poundland’s own progress in the retail space, which means consistent supply of the most popular products, mean the company can now press ahead and accept online orders.
The shop will start with household name items and its own ranges, which include a Jane Asher-branded line of kitchenware and Tommy Walsh’s DIY range, as well as Poundland’s Make-Up Gallery line of cosmetics.
Poundland has become a smash hit in the UK, with 590 stores opening since 1990. This rapid expansion has given the brand massive buying power and it has slowly improved the goods it can sell for the fixed price of £1.
The e-commerce facility will allow it to spread its reach even further and although it is limited to UK customers to begin with, it could facilitate the company’s expansion into Europe and pave the way for rapid international expansion. It will be interesting to see how Poundland manages its order delivery.
Poundland may be a unique case, as it combines low prices with massive volume and customers are expected to put in larger orders. It does show, however, that e-commerce can be a viable option for any business, no matter what the price of the individual items, and that a little lateral thinking can open up a huge marketplace for any business.