Volkswagen spoil the party…

This weeks breaking news concerning the deceit of Volkswagen, is not something that would appear to have any effect on the party market. Initially, it won’t .

What they have done is potentially destroy the consumers faith in any brand let alone a major international brand such as VW.

This is a brand that has been built on , reliability, quality engineering and yes , quite possibly honesty. Consumers have trusted the VW brand. It may never be the fastest car, the most luxurious, at the cutting edge of design, but it was probably the bench mark for honesty in car manufacturing. That has been blown away.

How does this leave every other brand? How will they rebuild that trust?

It gets worse,it is a German company. Recent research , and less recent research , shows Germany as the most trusted nation in Europe. 

The enormity of this news, goes beyond trust. It will hit the pocket of the customers. Firstly, they will believe they have made an error in their purchasing decisions but they will also loose out on resale values. Apart from the consumer there will be a huge number of people who have a connection to the motor industry, will pay a price. Loss of business, loss of jobs, loss of capital, loss of investments, and the list and implications go on.

I don’t want to go into a load of detail on the car market, as it won’t have an immediate impact on what we all do. But I do believe the consequences will filter down. If one of the world’s most trusted manufacturers from one of the world’s most trusted nations cheats on its customers the doubt may creep in a lot further down the chain.

What I do think is relevant is that Halloween is around the corner. There has already been an announcement (24/09/2015) on the BBC web site that   spot checks on ‘hundreds’ of retailers will be carried to ensure that children’s costumes meet the EU norms. There is no doubt that all major suppliers and brands will conform. But be wary of the cynical consumer , who questions the validity of the certification. ..

If we can’t trust VOLKSWAGEN,how can we trust KOSTUMEKINGS, even if they are the largest costume supplier in the world…

(Apologies to any supplier that is called Kostumekings. I have checked and I don’t think there is. If there is, they are certainly not the world’s largest supplier!)

I don’t want to scaremonger but I do want our industry to be aware and prepared. VW have the resources to , eventually, restore their credibility. We need to make sure we do everything to maintain consumer confidence.

Sleeping with the devil?

This week  Sainsburys announced a deal enabling them to sell in China. They are not opening stores nor have they bought an existing chain. They are going to distribute some of their product via Alibaba, the Chinese equivalent of Amazon.

The first reaction maybe of thinking this was good news , that is one of our leading retailers exporting their product to China. My view is that long term the flow may not always be eastwards .

Within the last couple of months Alibaba purchased a chain of about 1200 electrical stores in China. Part of the rationale was to enable a ‘click and collect’ function for Alibaba and their electrical wares.

Many of you will know that Alibaba also created a site called Aliexpress. Part of the function of Aliexpress was to create a more consumer orientated site aimed at pursuing Amazon consumers in the west.

All jolly interesting stuff but so what ? I maybe putting 2 and 2 together to equal 5, it maybe me being overly cynical and overtly sceptical. Sainsburys have 1200 stores in the UK. In the long term I can’t see Alibaba getting over excited about some Sainsburys ‘taste the difference ‘ or ‘So Organic’ items . Incidentally, this is what Sainsburys have said they will be distributing in China. But I can see them getting very excited about having  1200 ‘click and collect ‘ stores in the UK. Why the UK and not a European chain? Because the UK has by far the highest per capita spend online in the world. Furthermore, it will give Alibaba, or Alixpress some credibility with the consumer.

It may never happen. Maybe my sums don’t add up. But then in it’s present form I don’t see the sums of the other two parties adding up either, without something else in the formula . 

If I am right then we would be looking at the flow westwards of Chinese goods coming directly into the homes of the UK  consumer possibly direct from the factory……in China.

More bad retailers….

In a week when data showed that August retail figures for the UK showed a fall, I was, somewhat, gobsmacked to experience bad retailing from a major international retailer ie Zara. A retailer who, generally, is feted for its cutting edge retailing. Moreover,analysts believe that fashion retailing accounted for much of the drop.

Friday night in a major London shopping  centre ,should be a good time to harvest funds from your consumer. Indeed, this was the case, however, there are some buts. This a particular large branch, but on entering it felt like a particularly unloved market stall. It was a dump. Yes, it was very busy but there were no shortage of staff, none of which were tidying anything up nor were they helping the potential customers. Worse still were clothes that had been tried on and were covered in makeup (women’s clothes , for anyone interested) . It is bad enough that a consumer lets their makeup mark ‘tried on clothes ‘ , it is worse still that staff put them back on the hangers heavily marked, making  them virtually unsaleable .

However, in my book, the cardinal sin was 4 unopened tills, with a queue of at least 40 customers. Even if the available staff were not ‘ till ‘ trained, which would be a management issue, it is surely a gross error not to maximise your cash take in the shortest possible time.

All these errors could, of course be down to local management. But this in itself is the responsibility of senior management. When my wife and I walked into Top Shop (yeah right ..’what are you doing in Top Shop..’) which is virtually next door, it was the complete opposite. They were a perfect example of ‘Good Shop…Bad Shop’

What has this got to do with party retailers? Poor retailing is not restricted to any market sector and especially when you have more than a single outlet,underlining the importance of local management. Even the best of retailers can get it wrong. Success is created on discovering and rectifying the mistakes. I doubt very much that Zara read my blogs . Even if they did they are not going to take any notice of what  I say. 

Retailing is tough and takes no prisoners. International multiples, will always have under performing  stores. Small chains and independents cannot afford that luxury.