iscount retailer Poundland has finally begun selling online with the re-launch of its website as a transactional channel after many years of deliberating over the decision because of concerns it would be unable to run it profitably.

Like many low-price retailers it had considered opening an online shop and undertaken low-key trials with certain products but the predicted difficulty in being able to generate profits from such a service had held it back from offering a broader range of its inventory online.

Confidence in making such a move came from the digital migration of its Poundshop.com operation (that it had been running since it purchased the business in March 2022) and the opening of a second digital fulfilment hub at its distribution centre in Yorkshire. It had also been on a recruitment drive to bring in the relevant online and fulfilment specialists. 

Tom Hill, director of digital at Poundland, says: “This is an important milestone in the development of our digital business. These are exciting times in Poundland as we give our customers more ways to shop with us and offer them more value, wherever they are in the UK.”

The Poundshop.com operation had also been running at near full capacity and order levels had doubled since the Poundland acquisition. The addition of the second dedicated fulfilment centre gives the new online store plenty of room for growth and to fuel this the company plans to  develop and expand the products and services available on the site, which will involve a significant proportion of its growing in-store ranges being made available for home delivery.

At present the new website enables shoppers to select from a range of 3,000 products for delivery to people’s homes. A click & collect service is expected to follow. To ensure the economics stack-up the minimum order is set at £20 and a discount delivery charge of £1 only kicks in when the basket size moves over the £50 level.

The economics of online shopping and delivery have continued to pose a headache for many retailers that operate at the lower price end of the market such as B&M, which does not have an online store, and Primark that only recently introduced a click & collect service for a limited range of products. 

Other retailers, especially among the fast fashion players, continue to tinker with the fees they charge on deliveries and returns in order to better balance the economics. The most recent move came from H&M, which last week announced it was introducing a £1.99 charge for goods returned in-store or by post. This follows a similar move by Zara, Boohoo and New Look. 

H&M quickly amended its new charging policy to only relate to returns by post and that returning goods into its stores would remain free. This is a sensible move as more retailers recognise the value in encouraging customers to bring unwanted online-ordered goods into their stores – because it is both cheaper to process these items and it presents an opportunity for these customers to potentially purchase other goods.