The Demise Of Wilko: Has It Left A Gap In The Market?
Wilko has been a fixture of UK high streets for almost a century. However, in 2023, after their business model became outdated for several reasons, the bargain brand found itself in hot water. Wilko went into administration on 10th August, and despite other high street giants such as Poundland and B&M putting in bids, the brand went bust.
It’s expected that all 400 Wilko stores up and down the UK will be closed by the end of October 2023. Though many bargain hunters will mourn its convenience, Wilko’s demise does present an opportunity for business-minded individuals. Is it possible to fill the gap that Wilko has left without tripping up at the same stumbling blocks? Let’s find out…
The History of Wilko
It wasn’t always doom and gloom for Wilko. They were a leading high street brand for many decades. Let’s take a look into their history:
Bright Beginnings
Wilko, originally called Wilkinson, was founded in 1930 by James Kemsey Wilkinson and his then-fiancee Mary. They opened their first store in Leicester selling household goods and DIY essentials, and it didn’t take long before the brand boomed. By the end of 1930, there were six Wilkinson stores.
Initial Innovation
Throughout the 1940s, Wilkinson performed customer deliveries using a Jowett van to help locals keep their air-raid shelters stocked. Then, in the 1950s, they expanded their DIY and hardware ranges to satisfy customers who wanted to improve their homes.
Keep it in the Family
By the time the 1960s rolled around, James and Mary’s son Tony had joined the business as a branch manager. Wilkinson became the first self-service hardware store in Britain and a period of growth began with them pioneering ‘Wilko’ brand products.
The Turn of the Century
After changing up their product offerings to include household goods that customers can easily take home, James and Mary opened their Manton Wood warehouse and distribution centre to satisfy the 152 Wilkinson stores up and down the UK.
Big Changes
After opening Wilko Asia in 2008, the entire chain was rebranded from Wilkinson to Wilko in 2012. Wilko Worldwide continued to expand, with stores in India, Istanbul and Turkey. By 2021, their online shopping site had two million visitors every week.
The Chain’s Previous Success
Throughout its time on the high street, Wilko saw a lot of success.
In the early days, business-savvy was key to their continued growth. Wilko stayed on top of exactly what local customers needed and wanted from their hardware stores, and weren’t afraid to switch up their product offerings. They also made convenience a buzzword, and delivered goods straight to customers’ doors way back in the 1940s.
A passionate, family-led team put customers first, pioneered self-service, protected the brand and jumped on the chance to create a distribution network, which made stocking huge numbers of stores much easier. Wilko even took its products worldwide and saw significant success as a result.
But, though they seemingly have done everything right, the business still met its end. So, what caused that failure?
What Led to Wilko’s Failure?
1.High Street Base
Wilko’s home on the high street initially saw their profits soaring, but as shopping habits have changed since the millennium, this base is not as reliable as it once was.
Not only has high street footfall fallen, limiting Wilko customer numbers, but the cost of remaining in high street locations has sky-rocketed. Rent and rates are higher than ever.
Not to mention, high street shoppers are limited to what they can carry home, meaning no one wanted to do a big shop at Wilko only to have to lug six bags back through town.
Though Wilko did try and move its locations to retail parks, since stores at these locations are larger and require a broader product range, they are rarely cheaper overall.
2.Bulky Goods
Despite Wilko’s business-savvy leading them to cease selling lawnmowers and greenhouses, much of their product range is still bulky.
High street shoppers were dissuaded from buying rolled-up mattresses and garden trellises because they couldn’t carry them home.
This limited loyal buyers to low-price items such as washing up liquid and vacuum attachments, causing profits in expensive locations to fall even further.
3.Brexit
Like many of the most beloved stores on the UK high street, Brexit put significant strain on Wilko’s ability to import goods.
Empty shelves were a common sight in Wilko stores, as their most popular products were stuck in the supply chain before they even reached British stores.
4.COVID-19
The global pandemic spelled trouble for a huge number of businesses, but being such a beloved high street name, Wilko managed to stay the course for the most part.
After lockdowns were over, Wilko stores stayed put, but high street shoppers had fallen greatly after the influence of social-distancing.
Plus, all those supply chain issues thrust on Wilko by Brexit only got worse when the world came to a stop. Best sellers disappeared and profits went with them.
Though they managed to come out the other side of the pandemic, short-term thinking left Wilko struggling like never before.
5.Limited Online Shopping
Finally, though many businesses have made it through the hardships of the last few years with online product ranges, Wilko just hasn’t done enough to hone this area of business.
Though the brand does offer click-and-collect and home delivery through its online site, the product range is limited and already dominated by other, more popular hardware stores such as B&Q and Homebase.
The focus was placed on in-store ranges rather than on improving their online shopping experience, and when the pandemic hit, it was too late for Wilko to make these potentially business-saving changes.
The Gap in the Market
Wilko’s demise has left a huge gap in the market for home improvement, hardware and DIY goods. Since these products aren’t commonly sold through one dedicated business online, there’s one easy way for business-minded individuals to fill this gap.
Dropshipping.
In recent years, huge numbers of people have chosen to form a company for dropshipping. The process couldn’t be easier. But, before we get into that, let’s discuss the benefits of dropshipping over high street retail:
- Low overheads as no physical location
- Employee numbers greatly reduced and can work remotely
- Huge product ranges without initial purchase costs
- Delivery handled directly by suppliers
- No limit on kinds of items shoppers can purchase
- Targeted advertising through social media
If Wilko had taken advantage of dropshipping, they could have avoided the problems that led to their downfall. So, how can you form a company to do dropshipping?
1. First, you’ll need to create your company. A memorable name, catchy slogan and eye-catching logo are all essential.
2. To keep your home address private, set up a virtual office with address to register your company for trading.
3. After you’ve set up a virtual office, it’s time to create your website. You can invest some money into your site, but many free website builders offer e-commerce templates for much less than hiring a web designer.
4. Get in contact with wholesale homeware, hardware and DIY suppliers on sites like AliExpress or Worldwide Brands. Create product pages on your site with your chosen offerings.
5. Advertise your business online. It’s worth investing in targeted advertising so your first visitors are more likely to purchase products.
6. Once you have an order, depending on the type of dropshipping infrastructure you have on your site, it will be sent directly to the supplier. The supplier will package and send it out, and you can watch the profits roll in.
Conclusion
The UK’s retail landscape is rapidly evolving, and stores like Wilko serve as a cautionary tale for businesses travelling down the same, troublesome path. Failures in their choice of physical business premises, product range and inability to prepare for unforeseen issues such as Brexit and COVID-19 led to their downfall.
However, embracing e-commerce strategies such as dropshipping is a surefire way to avoid the stumbling blocks that led to Wilko’s end. Thanks to their stores closing, there is now a huge gap in the market for hardware and homeware companies that operate online.
Now is your chance to form a company, set up a virtual office with address, get in contact with suppliers and start marketing your offerings. Dropshipping removes the middlemen and pushes profits to the max, protecting you from changes in shopping habits that spelt the end for Wilko.
So, what are you waiting for? Fill that gap!