All that glitters might be gold…..

This is one store. Or rather it is one big store with some little offsprings (mainly in Airports). It would not be my store of choice but in the last financial year it has achieved a turnover of £2 billion. More importantly, it has increased its operating  profit from £178 million to £253 million. A staggering achievement for a retailer, at the top end of the market in a tough climate, weak pound, Brexit gloom, and much of what it sells you can buy elsewhere for less. Furthermore, this its seventh continuous year of growth (coincidentally the same length of time it has not been in the hands of Fayed).

‘Why ?’, you ask. I don’t know’, I  answer.  Apparently nigh on 100,000 visit the shop on an average day. Not all buy. A lot come to look, some buy something small often  to get a Harrods bag, but a significant number are prepared to part with large lumps of hard earned (or not so hard earned) cash. Just to boast they shop in Harrods? 

It is not really just one shop. Albeit, it is the largest department Store in Europe, at 90,000 sqm of retail selling space.There are the siblings, a Harrods Bank, Aviation service and a successful online operation. Ironically Harrods moto is ….

Omnia Omnibus Ubique, which is Latin for “all things for all  people”

If you visit the store you may see why this contains an element of truth. Of course, it is unique in the U.K. as a retail operation as it is also a tourist destination. Walking through Harrods, you will brush past Sheikhs, Oligarchs and window cleaners.

Yet there are, if you look hard enough, some reasoned commercial rational behind their success. No doubt the change of ownership from the infamous Egyptian to a Qatari sovereign fund helped. He sold , or so he claimed, because the Company pension fund trust refused his demand for his huge dividend requirements. I suspect not having got his place in the House of Lords (Lord of Fulham or Kensington,who knows?) had an influence. 

It knows what is, it understands it’s heritage and does not try to cut corners in continuing its development and reinforcing the brand. In the last year alone it has spent approximately £55 million on refurbishments, and it is not stopping there. The company values are British, luxury, service, innovation, and sensation. Whilst finding the service bit , somewhat haphazard at times , it probably hits  the spot with the rest . 

Despite the doubts about service, a lot of effort and resources have been invested into staff and management training with an emphasis on employee engagement and involvement. what? Well done Harrods ! I think there are fundamentals that could be applied to most retailers, and businesses in general . Understanding and having confidence in your business .Investing  in the business and staff, innovating (a word that keeps cropping up) and allowing the business to develop without loosing its identity. I find it difficult to quantify exactly what I mean because it sounds a bit ‘airy fairy’. It is probably easier to illustrate by highlighting the failed high street retailers , that tried to change and did not make  the investment,  too little and too late . 

Woolworths …..lost their way, and forgot their heritage. A value for money store that failed whilst discounters (value for money stores) flourished. Everybody cried, but nobody visited the stores.

MFI ……the first with flat pack furniture,but failed to invest and innovate (shucks that word again) crucified by Scandinavian innovators with flat pack.

BHS……..similar story.

And even Blockbuster……..should have come to the conclusion that heritage was the watching of films not the rental of videos . They should have had every opportunity to be  a Netflix .

Have a look at the following link and draw your  own conclusions… 

Perhaps it would mean more if we said 

If it glitters …it is not always gold…

‘Video killed the radio star’…..

For ‘killer’ insert ‘Amazon’ for ‘radio star’ insert ‘Retailer’ . Invert the meaning, ie it didn’t kill the radio star and you come to the same conclusion as the CEO of Williams-Sonama, a US multiple retailer , with stores worldwide including the U.K. 

“I certainly don’t think we’re in the midst of a retail apocalypse,” CEO Laura Alber said at Recode’s Code Commerce event. “I do not believe that and I do not believe that Amazon is killing retailers. I believe retailers’ bad service is killing retailers.” 

 I have often ranted on about retail service levels , as I have about Amazon’s impact on the High Street. Yet, if the bricks and mortars days were limited they (Amazon)would not be opening up their own stores (which they are).

There is some pretty bad customer service awaiting you on every High St. Many of the U.K. major retail failures within the last ten to fifteen years have been hastened by poor service levels . Poor service is not the preserve of high street retailers. Not all online operators are up to scratch. The relevant point here is that if an online operator offers poor service their demise would be rapid. For a bricks and mortar retailer they can occasionally drift on for years. I know some local independents that have lasted twenty odd years despite horrendous service .

However, on a more positive note , I have had very recent conversations with good retailers, within my own industry, who have said the likes of Amazon are a ‘pain’ but they have to live with it, move on, adapt and offer what the Amazons of this world cannot offer and that is  ‘real personal service’.

Retailers cannot rely upon service alone. Unique and innovative ideas have to be developed. They have to look at a USP that cannot be replicated online. Nordstrom, yet another US retailer have come with a concept which involves reassessing the ‘consumer’.

According to Erik Nordstrom, Co-President of Nordstrom, “There are not store customers or online customers. There are just customers who are more empowered more than ever to shop on their terms.”

Now, considering they are a clothing retailer, there is no clothing merchandise on show . 

Instead, the store is meant to be a “neighborhood hub,” providing a space where customers can congregate and enjoy a host of other unique services, including:

  • Free consultations with personal stylists
  • Onsite tailoring and alterations
  • Refreshments, including beer, wine, cold-pressed juice or espresso
  • Manicures

Only time will tell as to its effectiveness . Innovation is critical, along its path there will be failures and successes. Without innovation there will be only failures. In my opinion Erik Nordstrom knows the consumer has choice of where, when and why they buy. The route to that consumer will now never be via just  one channel. 

Video was killed before the radio star. Radio innovated and adapted, video just died.