Renting is the new Black….and I don’t mean property…

Listen up ! Check it out ! Stuff goes in cycles ! Back to the future! There is nothing new ! Bunch of clichés , none have any relevance. Well sort of not .

Within our own industry, party and fancy dress, much of today’s market was first created by retailers who used to hire out costumes for fancy dress parties. If you go back, perhaps, twenty/ twenty five years, the only fancy dress available was to hire . Then came along some innovative suppliers who discovered they could source very inexpensive alternatives for the consumer to buy and keep, from the Far East. The idea of actually buying and keeping the costume for less than the price to hire, leads us to the huge market it has become. A slight over simplification, but the principal and consequence are the same.

Within fashion, there has never been much of a tradition with hire, apart from maybe Wedding and formal evening wear clothing, certainly within the U.K. Yet, in the USA, approximately ten years ago , appeared a website called Rent the Runway, initially for the purpose of renting formal wear, since then it has become ….

subscription fashion service that powers women to rent unlimited designer styles for everyday and occasion

Ten years later others have joined the fray. In 2018 the American State of fashion Report 2019, highlighted that the End of Ownership was one of the industry’s top 10 trends.

The lifespan of the fashion product is becoming more elastic as pre-owned, refurbished,

repair and rental business models continue to evolve. Fashion players will increasingly tap into this market

to gain access to new consumers seeking both affordability and a move away from the permanent ownership of clothing

Has this trend crossed the Atlantic? You bet your ‘sweet bippy’ it has , hirestreetuk.com, ourcloset.co.uk, frontrowuk.com to list but a few.

Environmental issues are front line news and at the same time creating new and different opportunities for pretty much most businesses, if they have got any commercial sense . The thought that much ‘fashion’ wear gets worn little and is dumped into landfill is not an appealing thought. Not that I am totally convinced it is completely true , but the concept of hiring is perhaps attractive to the conscientious consumer despite the somewhat counter intuitive issue of the CO2 miles travelled by each piece of apparel as it continually goes backwards and forwards. Is that really better than the distance traveled between retailer, consumer and local dump? It also ignores some of the benefits accrued to Charities via clothing given and sold in charity shops. Oh well, subject for another day , maybe . Nonetheless the environment is undoubtedly an influencing factor.

So where does that leads us within our own market place. I am not totally sure. There are theories within our own market and throughout Europe, that the total market for fancy dress is close to a plateau. There is, undoubtedly, a move by the consumer to buy accessories that can be used again as opposed to a specific character costume that can only be used for a one ‘style’ event . So perhaps there is a perfect storm brewing . The meeting of converging energies, trends, environment and economics. If this were to be the case, I am not sure what the business model would be. Could be very ironic . One of the most notable features over the last couple of years within our industry has been the mass closure of fancy dress hire operators. There is no suggestion that there is going to be a 180 degree shift in the market but it may an indicator for retailers looking at closing their hire departments to hang on a bit .

Whatever the consequence,I don’t think it should be ignored. There will be somebody out there thinking about it. There’s a bit of a rule concerning trends (it’s only my rule) and that is if you follow them , they don’t happen, if you don’t , you look back in anger ….

So back to the opening sentence. Loads of clichés, having no meaning to anything sort of makes them no longer clichés. Well, if you take the definition as the overuse of the word or phrase to the point of losing its meaning , then you can include trends. Once over used, they cease to be trends. When everyone has forgotten about a previous trend, it can once again become a trend . A bit like ‘hire’. Something to figure out over breakfast.

Independents…Poor Relation or Relatively Poor?

Travelling the length and breadth of the U.K. , Julia and I come across some rubbish shops. That’s not just within our own market place, cafés , sandwich shops, newsagents, convenience stores, petrol station shops and loads of others that sell stuff as opposed to retailing. They are poorly lit, poorly stocked, grim layouts and apathetic service. In reality, they are not retailers. They are not owned and run by retailers they are owned and run by people . Which is just not the same.

I remember that during the mass closure of the coal mines, the most popular start ups with redundancy money were Bakers. I assume the rational were that the ex miners liked their bread, used to early hours and hard graft and perhaps their area did not have an independent bakery. All good reasons but not necessarily the right reasons . Firstly they did not question why there was not a bakers, they had not run a business before, least of all a shop, they would have had little training and I suggest just as significantly they had been used to working in a team. Now they were on their own. I would doubt that any of those bread shops, still exist today.

In recent times, I am being in exact so as not to offend the subject, I visited a potential new customer. The shop did not look attractive. The proprietor was very pleasant, not always the case, but when asked why he had started this business, the response was…

I didn’t enjoy what I was doing before

Not an usual nor unreasonable response, but the motivation and rationale for opening a new retail outlet was completely absent. Further into the discussion illustrated a complete lack of knowledge of both retailing and the market within which he was operating. What was even more disturbing was the lack of local knowledge of the area in which he lived.

Now none of this may preclude his future success, but it is symptomatic of many who think opening a shop is a good idea. About three or four years a couple approached me at a trade show because they were looking for suppliers for a new shop they were planning to open. They were enthusiastic, had previously worked in a cafe (worked in not owned) and felt that the small town in which they lived needed a party shop. I knew the area and suggested that they looked at other good party shops to get an idea of locations, ranges, prices, costs…..None of these things had even crossed their minds. Fortunately for them, and I don’t think because of my advice, the shop never materialised.

Independents, this may be a surprise to some, do have advantages over multiples. By definition they are independent which enables them to be more fluid, innovative, flexible, original , in touch with local needs and above offer a knowledgeable and personal service. Yet the rubbish ones seem to go to every length to avoid all of this. Forty years ago, you could just open a shop and sell whatever and maybe make a reasonable living, or at least as much as in paid employ, and be your own boss. You can’t now.

When Julia and I first started working together, we would go into a potential new customer and at the end of our discussion with the proprietor we said we would confirm everything we discussed by email. Occasionally, we received the somewhat strange riposte that

I don’t do email

So invariably we didn’t do business. Just to be clear , we are not talking last century or even last decade. And this not about us doing business with them , but them being able to do business with anyone, suppliers or customers .

The really good independents , ‘Sparkle’. You know when you are in one. It doesn’t matter what type of retailer it is, it does not matter what they are selling. But from the moment you enter that store, you are ‘wanted’ as a customer . You know that you want to buy there and probably know that you want to come back again….‘wanted and want to…‘ being the key words

I have previously posted about two brothers , in their early twenties, having no retail experience , started a small convenience store outlet, which has matured into small but successful chain. The significant difference is that they had vision, drive and focus. Most days we will experience an independent retailer whose only drive can be found on their way to and from work. Some may think this a little disingenuous, but there is no given right for a shop to succeed just because it is there. I have seen it so often in my own local shops. Local residents bemoaning the closure of another dreadful independent retailer, which they rarely visited. Then to have the gaul to moan about the new one because they are new and different! They even went to lengths of opposing a licence to sell alcohol as they felt there was enough shops selling booze in the parade. Three others to be precise, one being a crappy wine store that has since closed, the other two are a Sainsbury’s convenience store and a Co-op. The new store turned out to be an excellent deli, which has become a roaring success.

Poor service, poor product ranges, poor atmosphere and poor stock levels will inevitably lead to a very poor shop keeper. Good independents should never consider themselves the poor relation of the multiples . They are (generally ) leaner, fitter, happier and more adaptable. In many respects they are in a better position to meet the stresses and strains of the constantly changing retail scene. If they do it well, they need never to be relatively poor.

I believe that a ‘good’ independent retailer has a better future than any mediocre chain .

Many Falls come before True Pride…..

This post is very ‘left field’. It has little to do with any retail market place. Or maybe it does , as any commentary on the human condition effects every aspect of society.

I make two apologies …

1. I have not written this post . Of course , I have written this preamble, which should be pretty obvious as I keep using the first person.

2. I apologise, in a sort of way, for those who will have already read the contents in a recent Facebook post. But as I know the author wants as many people as possible to read this, then if I only reach another half dozen , then I shall retract the repeat apology and consider that I have helped a little more in sharing this message.

I make no apology, whatsoever, about the rest of this post. I would just ask you to read it.

So the following is written by our daughter…..

On Being Queer in London and Essex – 1993 to 2019

I don’t often write anything personal on social media as I’m a private person however in recognition of Pride this year I wanted to share an ordinary persons experience of growing up and being LGBT from 1993 (when I came out) to 2019. To be clear and out I am exclusively attracted to and romantically love women. I don’t hate or am repelled by men in any way; I just don’t fancy them or could ever fall in love with a male. I am female in body but also identify as non binary (neither male or female) and fall on the trans spectrum. Very few people know this. Perhaps I’m still don’t feel entirely able to be open about this as gender identity is still very much beyond most peoples understanding at this time. But this is who I am.

Since I came out many things have changed, most notably the law and general society, however homophobia is still very much alive as the recent incident of two gay women being physically assaulted on a bus in central London shows. I don’t need anyone to like this post but I would please ask you to share, if you agree with the underlying message, so this reaches as far as possible.

In 1993 (my third year of secondary school in Woodford) when I came out I did so as I’m not someone to hide or be ashamed of who I am. I had been that way since I could remember and it was nothing but natural to me. At that time Section 28 (Thatcher legislation) was in full force and prevented any support or intervention to protect me in school. There were numerous other pupils who targeted me, mainly verbally but on occasion physically, during school time over the course of three years. At no point did staff intervene or show any support – I even recall one teacher telling me off for reacting verbally when a group of boys in my year taunted me openly with homophobic names in a classroom. I don’t know if the teachers were afraid to intervene or simply agreed with these attempts at bullying but not once did anyone challenge them. In fact the only intervention was a referral by school for a psychiatric assessment after I came out. I didn’t need psychiatric support, I was happy with who I was, the only reason I needed any support was because of how others/society treated me and people like me.

So I learnt to fight back and stand up for myself very quickly. I had a group of friends who were supportive, and this grew in time as I stood firm in who I was, but they were limited in the force of peer pressure and wanting to fit in themselves. I endured school but this made me more determined to be out and proud. I simply found my own community of LGBT people in London and gravitated towards them before finally leaving school at the earliest opportunity and going to a sixth form college/university. I’ve not retained contact with anyone from my educational years which is common for LGBT people, as although I always made friends easily, our pathways and experiences were so far removed from one another.

I had to lie about my age and pretend I was older from the age of 13 until I was 18 as no youth groups for under 18 were allowed to exist by law for LGBT. Due to the age of consent laws many of my male gay friends under 21 were at risk of imprisonment if they entered into any relationship that was automatically afforded and encouraged by society for the same peer group who happened to be heterosexual. Without this pretence I would have had no means of support at all. This meant I had to socialise around pubs and bars mainly and enter into an adult and very real world very early on. This opened my eyes to diversity for the first time as the community consisted of people from all backgrounds, race, religion, class and identity. I met young people, teens, who were homeless because their own families had thrown them out and abandoned them after discovering they were gay. Women and men who had survived sexual assaults because of their sexuality. People with substance issues and mental health problems because of how society and their families treated them. And just ordinary people trying to live and love like everyone else free from fear and prejudice.

Marriage, children, protection by law if your partner was to die, pension rights, and the right to enter all professions did not exist for our community. In Ireland it was an illegal offence to be gay at all until 1993; the world health organisation had only just removed homosexuality as a mental disorder from diagnostic manuals. I came out in a world where I soon learnt I was lesser and had none of those rights heterosexual people are automatically granted. The foundation and glue for the gay community existed on solidarity and love alone.

The pubs I frequented were subject to hate graffiti and groups of straight males lying in wait for us outside at night. Once the windows were smashed and glass scattered everywhere inside the pub. Several times people I knew were physically assaulted and even at risk of sexual assault in London for leaving such premises.

I was attacked physically twice. By a group of men. I was asked to renounce my sexuality to save being hit. I wouldn’t so I was held over the train platform in Hackney. I was scared out of straight pubs especially in Woodford where I lived and even now I have a fear of entering any bar which isn’t LGBT. I was verbally abused 100’s of times, beyond count. I maintained a list for a while in 2000 (which I found recently) but gave up after recording 20+ incidents in three months. I’ve been threatened by a gang of 10+ men in Leyton and challenged them alone resulting in an apology. I’ve been called names and jeered at by children and whole families in supermarkets, from cars, in parks. Summer meant, and still does, a higher risk. Winter is safer due to the cold and darkness. I’ve been called a queer, a faggot, a f-ing dyke, a poof…any gay slang term you can imagine. I’ve been spat at the first time I held hands with another female in Soho. I’ve been threatened with death by a gang if I continued to ride the Walthamstow to Liverpool Street train line. A passerby intervened (a woman) and I will never forget her act.

There were no laws to protect us and criminalise this behaviour. I reported it for a while but heard nothing from the police ever. The only time the police approached me in East London were to suspect me of joyriding (my own car) and burglary (of my own flat).

Teachers, the police, organised religion, the state, the government, people. I grew up thinking they were all against people like me. Family values meant the exclusion of gays – family was, and still is, who has my back and I have theirs regardless of blood or DNA. I felt excluded, alone and it was frightening. In the UK in the 90’s and into the 2000’s.

As time went on things got better as I moved from Waltham Forest back to Woodford then to Buckhurst Hill. Society started to change, laws protected me and I felt safer. Never safe but safer. Some neighbours took time to warm to the presence of LGBT on the street and every single holiday (until this day) has to be planned with great care around location. I have experienced holidays were everyone would stare at me with my partner and make us feel unwelcome. Comments made and threatening looks in some areas. So for now I can’t visit countries that many other people take for granted…parts of the USA, some Caribbean islands, parts of Asia, Africa and even Europe. Simply because I am at risk of imprisonment or death at worse; at best a holiday of pretence or discomfort.

Sadly in the last couple of years I’ve been reminded of how homophobia still lurks beyond the surface. On public transport, people close to me. Public toilets are a daily concern – I’ve been asked to leave many toilets or gendered spaces. I’ve had a whole group of middle aged women congregate outside a toilet I was in in Ilford asking the attendant to ask me to leave. I’ve experienced recent direct homophobia at my gym in Chigwell including not being able to use the changing room for two years after one incident making it clear I’m not welcome. I will always challenge and stand up for myself but it gets tiring and exhausting. People still think it’s okay to make light banter of ‘gays’ but it isn’t – this is all part of what leads to more serious incidents. Like any prejudice. I’ve had white straight middle class men comment that they need a straight pride as heterosexual men are they are now the oppressed party. I remind them that the National Front may still exist if they feel the need to rally in this way. I would never think it okay to comment that a White Pride is needed or joke about colour, the majority have their own culture reflected and validated every single day as I do in my skin tone. I don’t know what it’s like to be an ethnic minority but I do know that they will face barriers I will never know exist. I know they will feel that same sense of exclusion at times and fear in certain parts of the country. I know being both an ethnic minority and gay is even harder.

I would give many examples of people close to me and how they face prejudice and discrimination today. But I won’t because in the LGBT community we understand the need for discretion and respecting many of us can’t still come out for fear. We still don’t have any role models above us in day to day life to guide us. We have no template for getting old yet. We have very scarce resources for older people, I hope that changes by the time I get there.

I am still expected and asked to be patient and sensitive towards people who need to adjust to being around someone like me (LGBT) who may feel discomfort. I’m not sure we would feel it is acceptable (although I’m sure people like this exist) to ask a person from an ethnic minority background to be sensitive to a white person who needs to adjust to the visual difference in skin colour. I would refer to the experiences in this post and question why I am still expected to be sensitive to people’s fears and prejudices – surely the onus isn’t on the minority but on the majority to be sensitive. I don’t need to be liked but I do ask to be respected and not pre judged. I would ask anyone reading this to understand the huge courage that people take to come out and to attempt to live freely. The fear that never quite goes; the daily risk assessing of every room and situation you enter. The daily effort of always having to prove you are a positive representation of being Queer so as to change peoples views slowly. Pride isn’t about having a party and dressing up; it’s about being visible and safe for a day, remembering our shared history and learning from this.

But it’s not all bad…I’m fortunate to have parents who support my choice in partner, to be relatively comfortable financially (lower income areas can be higher risk of physical attack), to be confident as a person and to have some very good close friends who I consider my family (all LGBT). It’s also taught me the importance of standing up for others, questioning everything including those in power, the need to be focused and determined, to seek respect not a wish to be popular, to not be afraid to stand out, to fight my corner and those around me, and to never judge until you know someone. I am happy and comfortable with who I am and who I love.

I will end with a quote that I will never forget seeing on the wall of someone close to me many years ago when I was 19. I truly believe in these words and feel they apply to any minority or oppressed community. Indeed they apply to everyone. “First they came …” is the poetic form of a prose post- war confession first made in German in 1946 by the German Lutheranpastor Martin Niemöller. It is about the cowardice of German intellectuals and certain clergy (including, by his own repeated admissions, Niemöller himself) following the Nazis’ rise to power and subsequent incremental purging of their chosen targets, group after group.

First they came for the socialists, and I did not speak out—

Because I was not a socialist.

Then they came for the trade unionists, and I did not speak out—

Because I was not a trade unionist.

Then they came for the Jews, and I did not speak out—

Because I was not a Jew.

Then they came for me—and there was no one left to speak for me.

How Green is the Retail Valley?

I have previously described my dislike for Philip Green, and I have also used the image of the valley above, but I have never combined the two until now. The result is not the finest piece of digital manipulation but neither is the subject matter. A fine bit of digital manipulation, that is.

Rents

There is a lot PG has to answer for the problems facing the Arcadia group, but there are other factors that are also affecting other major High Street multiple retailers here and abroad. The internet is one of course, but much has been said about that already . Rents, a singularly U.K. problem is common to both small and big retailers. I believe that the biggies actually have a bigger problem and a lot to answer for .They are part of the problem. If they had not been happy to pay the huge figures involved, during a more buoyant retail environment, and I suspect they were very happy, they would not have created a huge rod for their own back and that of their smaller colleagues. They knew how the landlords borrowing models were constructed and by subconsciously (maybe) funding this model they knew that it would be very difficult to reverse . The consequences have come home to roost.

Debt

Debt is how markets work. Without debt, the banking sector, would not exist . No banks no debt, no debt no business. Yet debt is good, bad, bad, good, good, bad there are no half measures. In my opinion it is was what an organisation does with its borrowings. Bad debt is another problem facing many of the big players. Some may say Arcadia’s problems have come about because of the way it has used its debt . That is to say huge dividend payments to the Green family, instead going to a major future investment programme ( ignoring any pension deficits) has left the group struggling. Another different example is that of Boots. They are having a tough time , the entire estate needs a massive investment in virtually every outlet because to me, they look tired and out of date. Yet part of the purchase of Boots by the giant American Walgreen saddled it with an additional £1 billion of debt. Now Boots having tough time, tired old shops, all it can do in the immediate future is close a load down especially where there are two or three in one town. What was that all about. The list is virtually endless Debenhams, House of Fraser and many others laden with debt, and the need to reinvent themselves without the means to do so.

Big Ships

For many years, multiple retailers seemed to think that the way of continuing success was to just open more stores without looking at why was that necessarily the right thing to do. When the sea got a bit rough they found that they did have the resources nor the time to turn these giant ships around before crashing into the rocks. Not only was and is there the question of long expensive leases but the huge costs in redeveloping the stores. The constant quest for ‘world’ or in this case U.K. dominance is more often than not, a cause for eventual failings within the retailers business model . We only have to look at Marks and Spencer’s and Tesco’s as perfect examples. Ironically both organisations sought to expand overseas which was when the problems in the U.K. started to come home to roost .They are not, of course, complete failures but they were both the ‘darlings’ of the High Street both now facing major structural issues. The biggest of ships have to go into dry dock for renovations, there is no dry dock for retailers they have to carry on trading . At the same time they seem to not look at what is going on over their shoulders until it is too late.

The Internet , debt, big ships and rents

I said I would not go over old ground. So I will . The retailer cannot keep complaining about the internet. It has been there long enough . Best part of twenty years, if not a bit longer and it accounts for approximately 20% of total sales . Of course, if you take 20% off any one business it is a huge chunk . Yet there are still many successful High Street multiples eg Next, Uniqlo, Zara, Lidl, Aldi, JD Sports, Dunelm, The Entertainer (toys), and Lush. And the common factors are that they have rents to pay, business rates to pay and there is online competition. As to their debt levels this is slightly more complicated . For example JD Sports has increased theirs over the last 12 months and Dunelm has decreased. But both are considered to be in safe parameters as they generate plenty of cash to cover their relevant ratios. But they are succeeding within the same markets as those who are not. Which is how it has always been.

There was and is a danger of this becoming a bit wordy, convoluted and lacking in detail . Yet I am constantly frustrated at large retailers looking for excuses, when often the reasons are right in front of them, particularly when looking into a mirror. Moreover, their own mistakes, lack of foresight or commercial vanity impact on the small independents. I am not a financial analyst nor am I retail expert but as an interested observer I believe there are certain common factors that make a lot of valleys unsuitable to ‘greening up’ and in this case I mean that in a sense relating to green shoots et al, rather than a particular person who at one stage was hailed as the messiah of entrepreneurial retailing. The really unfortunate feature of this, is that those at the top of these valleys never suffer, at least not financially . Those at the bottom(employees and suppliers) invariably always do.

Lookalikey or knockoffs?

Julia will prostitute her pride for the sake of cheap gin. Yet her home diffuser of choice is set on the other end of the scale being that of Jo Malone. Or so I thought .

On my fortnightly trip down to our local Aldi, to fill up the back of our car with cheap gin, a new item has been added to my Aldi shopping list , no 1, or if out of stock a number 3. So what may these be ? I think a picture tells a thousand stories, but in this case you need just two pictures….

nuff’ said. Nah, think it deserves another two…

I have got to say when the option is …£3.99 or £62.00 , the word option goes out the window. Now I am sure Jo Malone is not that fussed as she carted away her millions, when Estée Lauder bought the company twenty years ago. But Estée maybe.

So what is this ? A knockoff ? A copy ? A counterfeit ? Or just a plain and simple lookalikey. The only definite, is that it isn’t a counterfeit. Or at least I think it isn’t. So how are the rest defined and what if any are the consequences ? I need to be clear that there is a difference in the product . The Aldi version is smaller and carries less liquid scent. It probably doesn’t last quite as long, although we haven’t tested it . But the difference is not a factor of fifteen. Oh yes, the Jo Malone stores are a tad swisher and in more salubrious locations. So maybe we are now up-to fifteen quid RSP. Yep there are development and marketing costs . So maybe at a push another tenner. Now we are at £24. Of course , you are buying into a lifestyle that adds £0 . Still £24. The much higher retail attracts a much higher cash value of vat (at £3.99 inc £0.67 vat , £62 inc £10.33 vat) . Hurrah ! at last a winner….for the exchequer!

The law being doing its usual ‘ as clear as mud impersonation ‘ I don’t know what really defines ‘counterfeit’. One key aspect is the branding or rather brand name, and of course the products above make no reference to the brand name. Seemingly clever stuff. Yet I have some sympathy with the brand. Jo Malone/Estée Lauder will have spent trolley loads of cash developing the product, marketing the brand and maintaining its awareness with their targeted consumer. Aldi pop along with no added costs apart from the product cost and reap the benefits.

Aldi seem to have a bit of a ‘lookalikey’ history . The image below is one of many that suggests that the product development at Aldi is very fond of major brand packaging design (Lidl is not that far behind) or rather that of other major brands

Courtesy of Dean Williams – print to print blog, April 2015.

Dean continues in the blog…

so how have they been allowed to get away with blatant copycat packaging without being sued.?

Intellectual property partner Jeremy Hertzog, of law firm Mishcon de Reya, says: ‘Brands are cautious about taking legal action in situations like this.

The brand would need to prove that the copycat product is deliberately out to confuse the buyer into believing that the similar-looking product is actually connected economically to the original in some way.’

Well blow me down with a pigeons feather. If they are not deliberately out to deceive then if you pick up a bottle of Magnum in Aldi don’t expect it to taste of ice cream.

Within our own market , as with others, we are plagued by ‘fakes’. If major High Street chains are able to get way this practice, and continue they will continue, unless the consumer stops buying them, then we shall all carry on knocking our heads against the proverbial.

Some suppliers have tried their day in court, and some who can’t afford a long legal battle, have protested to no avail . So it is unlikely to stop.

Will I stop filling the spare space in my car with lookalikey smellys ? No, because we save fifty eights squids and more importantly it is legal , at the moment. I comfort my conscience, by thinking we still buy the odd Jo Malone, or rather our daughter does for a pressie on mother’s day.

I would also like to add Julia has forbidden me to prostitute myself in anyway unless it was to accrue considerable revenues, enabling us not to have to visit Aldi anymore for cheap gin et al… So pretty safe ground there .

It’s all a bed of a roses..

.

Politicians, journalists, independent and multi national retailers suggest believe that is how commercial life is for online operators( image of a sunlight over a green valley, seemed to be somewhat more positive than the images I could find for ‘beds of roses’ they all looked rather funereal) Stick it up on the web and it sells , piece of p……for them, what chance have us High Street retailers got…Special online taxes, a more level playing field are a couple of the more lurid suggestions.

It’s a bit rich coming from retail multiples especially the supermarket chains, who had an equally devastating impact upon the High Street, during the sixties and seventies. Some would argue that their impact was quicker and more devastating . Especially as the demise of the High Street was a direct consequence of their actions, rather than online purchasing being only one of a number of factors having a negative effect .

I approached this subject back in December ’17. Whilst the problems facing online operators that were around then, still exist, there are bigger problems today.

One of those problems, whilst mainly effecting clothing and shoes is consumer expectations. Or rather how the consumer has altered their behaviour because of those expectations. Returns within the shoes and clothing sectors have become such a big problem that it is impacting upon retailers conditions of sale. It is not just about apparel not fitting, or rather it is,but in a skewed manner. Consumers are buying two or three different sizes and only keeping the one that fits. ‘Obs’ you may say. But it is worse because of the increase in purchase by mobile, shopping is sometimes done by a half smashed consumer in a bar, realising 24 hours later they don’t want it. This don’t ‘appen in shops (does it? Please let me know if this is a frequent occurrence in your shop!)

Product returns and exchanges have been the nemesis of the direct-to-consumer industry going back to the mail-order catalog days. For products that are fit and/or fabrication sensitive (think fashion, intimate apparel, shoes) returns often exceed 30%, and rates north of 40% are not unheard of. Back in the good old days, while high return rates were definitely an area of concern, the fact that the customer often paid “shipping & handling” costs helped soften the damage to the bottom line. In fact, for some brands, shipping & handling was actually a profit center.

Today? Well, not so much. Forbes magazine 2018

The next biggie is online fraud.

It is hard to feel sorry for websites. But if you think about them as being a bit like shop owners, it is worth considering that 63 per cent of online merchants are struggling to keep on top of fraud attacks, according to research by payments processing firm Worldpay.

Some have had very public struggles. At the end of 2013, US retail giant Target had 40 million credit and debit card account details stolen by hackers. The upshot was it cost the company $162 million in costs not covered by insurance.

The chart above illustrates the rising rate of e-commerce card fraud in the U.K. upto the end of 2014. The number is now somewhat higher . Some may suggest that Stores suffer from theft. Yet there is a critical difference. Both the online retailer and their customer are victims. Yes, stores factor shrinkage(shoplifting) into their pricing but this is not comparable to the potential losses with online fraud. The additional effect is that the consumer can lose confidence with online purchasing. Most consumers don’t care a toss what is nicked in a shop.

The third problem are counterfeits . However I have posted about this before and I look at again in my next post. But the reality is that whilst all forms of retailing suffers from its effects, online it is insidious and a lot more difficult to monitor and pursue. You only have to read an audit by Apple in 2016 which showed that 90% of Apple accessories sold during that year were counterfeit(of course not all was online but I believe a major chunk was). If Apple struggle with the problem what chance does anyone else have?

The trouble with Beds of Roses and sunny valleys, is that eventually the roses wilt and clouds cover the sun. We have to be very careful how we approach the level playing field that bricks and mortar stores clamour for . The future of retailing lies with good e-commerce and good physical store retailing. With the emphasis on ‘Good’. We can’t go backwards and hope it will work out eventually.

For Arts sake!

Or Farts. Quite simply, it illustrates my entire knowledge of the art world, the sum total is equal to a small amount of escaped wind, very little, nix, nada, rien …whereas Julia does. Does know some stuff that is. Over the last couple of weeks we have visited a number of galleries from the Tate Modern through to a small local gallery. Apart from embellishing my little knowledge we discussed pricing. Why so? Because Julia sells some of her stuff and we discussed how to price her Art. Well I thought I knew a little about pricing but when it comes to Art pricing , I don’t even know à farts worth.

Well so I thought . But it was not the Art bit that disembowelled my pricing knowledge. It was discovering what I thought was a little knowledge was once again barely a farts worth.

So what fountain , did all this accumulated lack of knowledge, gush from. Well it started back in the last century (l liked writing that …last century…), when the U.K. was economically under the inflation cosh pushing 20%. I confidently predicted that price points such as 99p and £1.99 would rapidly disappear. They did not . At about the same time we were offered a distribution possibility of a major range of foil balloons. Great item, but when the retail price goes over £1, I think it will have an impact on the market…. well I got that right at least , the impact that is . I predicted they would tank . I got that wrong.

There was a glimmer of hope, when during the late nineties, Asda (I think there were the first) got rid of obvious price points such as 99p. They introduced very odd numbers like 87p , £1.29, and £1.47p. There you go, price points are not relevant anymore… I said to my loyal, yet disbelieving customer base. All that this move actually did was to increase the pressure on price points as Asda started to sell items that were 99p at 87p instead. Most independents and smaller chains could not compete with that and were under even more pressure to at least maintaining 99p and not go above it. Wrong again.

The rest of my time has been consumed with responding to customers queries as what is the suggested retail price. For goodness sake , you know what the cost is , you know what your costs are , what margin do you want to earn? Actually I never said that but I did and do still think it sometimes. Not always as things are a bit different now. But I will come back to that.

So back to the here and now. I was very recently in a meeting with a customer who is a confectionary wholesaler. He told me that about ten years ago, many of the major brands, such as Nestlé, introduced pre-priced product. At first there was much anguish amongst the independents but apparently that’s all they sell now (nearly all). I sort of understand why, but not completely.

I have regular discussions with customers about retail pricing and one thing is quite clear and that is nothing is clear . Price points still have a relevance, but I still don’t understand . If you think something should sell for £1.45, will you sell any less at £1.49. It’s a big question as that 4p is pure net profit. Some will say it takes too much time to drill down into every product. But I would ask can you afford not to.

The advent of online shopping has hit the margins of many a retailer. Price points are irrelevant as it is all about the price itself. However, in an industry such as ours there opportunities available to look at increasing margins on low value items with which online traders struggle to sell as they are not cost effective. But that is for another day.

Back to Julia and our art pricing discussion. After much focused , detailed and professional deliberation on my contributions, Julia shrugged and responded…

Yeah, ok , why don’t you go back to the kitchen and pluck the salmon or descale the rabbit, or whatever it is you do in there ..

I had suggested that perhaps if she priced a piece at £9999 instead of £10k it might just close the sale …..

Wrong again..for F….sake

The Last Straw….or is it ?

I dunno I can’t drink me coktales wiv one of dem paper straws … they go soggy…

I’m not an expert. No that’s not true I am. I use a straw nearly every day. Julia and I make fresh fruit smoothies most days and we now use a paper straw. I can’t see the problem as I bet our straws hang around in our smoothies much longer that most people take to drink their ‘Coktales’.

I am not a climate change denier nor am I climate change apologist. There is a problem out there and it needs to be resolved . But part of that problem is ‘people’.

I am not one to lecture on what you should or shouldn’t do. I shan’t be given up my car soon, nor shall I stop flying . I won’t become a vegan and I will wear leather shoes on occasion.

On the one hand climate activists are not going achieve their aims of hair shirt today or we are all doomed before the next Olympics. As that is not a message the public will really listen to or more importantly act upon. Nor is it any good suggesting the ‘capitalist system’ is also to blame as it’s all about profit. As that is not a good sell or is especially true. Actually, it is true to a degree. The profit bit is right but the market ie the general public created a serious and consistent demand for ‘eco’ products then the capitalist would supply it. But in general the public don’t ! Ergo the opening sentence.

If I sink back in the annals of time or rather my memory, I am taken back to a period, probably fifteen to twenty years ago . The Stationery Industry created range after range of eco friendly stationery products. But they did not sell. “But why?”. Because they were slightly more expensive. What you may ask is not eco friendly about writing pads ? They did not come from sustainable wood sources.

I believe that one of the problems the consumer has, and I very much count myself as one of them, is that of confusion. Being on the old side of age groups, I do have the benefit of little (yes, that is not a typo of ‘a little’ which would confer a completely different meaning) knowledge. I can remember the first use of nuclear power. It was hailed as the saviour of future power sources. Then it was not, today it is by some, seen as part of the solution. Diesel was bad, then good and now it is bad again. In some quarters even solar power has its critics. I have just been told that in Australia solar power is taxable https://www.solarcitizens.org.au/suntax

We rely on science to inform. But science is an ever changing beast. Butter is good, butter is bad and butter is good again. A glass of red wine a day is good for you, then it is bad for you, then good for you. Statins are good, bad, good. Coffee is bad,good, bad. You get the idea . For crying out loud, asbestos was once used as insulation . It is not as long ago as you think, some builders were still using it up until 2000. Blue and brown asbestos was not banned until 1985 and white in 1999. A recent report suggested that if you wished to eat meat then you should eat beef or lamb, rather than pigs. Cows and sheep eat grass, pigs eat soya and grain. Grass is good, soya and grain are bad. Yet cows give out the most methane. I can’t be the only one who is confused.

We have to given achievable goals. If they are not, most will give up. Moreover, it has to go beyond these shores. If Western Europe becomes an eco paradise and the rest of the world continues to castes a metaphorical smog over us , then it will have all been for nothing.

Back to straws. There are alternatives to paper, such as stainless steel and bamboo. Both of which I think have hygiene issues. That is to say if reused in bars, hotels, restaurants etc and are not properly cleaned (more water being used and probably hot , more problems ) they are a hygiene hazard. But more to the point (nice lead in) they are potential weapons . Doorman may well pat you down for a knife only to let you get your hands on loads of sharp pointy things once inside, and stick them into your fellow clubbers until your hearts content. The Red Top headlines will scream

Sharp pointy straw mania grips our major cities…..

So perhaps paper is the last straw. And I thought I would stop there, but straw is too tempting. Politicians of all shapes and sizes are clutching at straws , whichever ever way you look. Be it Climate , Brexit, NHS, Social Care, policing and that’s just the U.K. Actually straws are the only area they have been decisive bout (plastic ones that is). Yet they nearly screwed that up by adding product that was to be straw despite being the complete opposite . Members of our industry will be very aware of what I speak. Idioms come thick and fast…straws and camels, straw houses, clutching at straws, drawing at the short straw….. None of them good.

What is a ‘Bad Deal’?

The Guy in red with the tail and horns is marked A, and the plastic Guy with a briefcase is B . This saves me chundering on about a red guy with horns and a plastic with a briefcase.

Most deals will benefit one party more than the other . There are few ‘win, wins’. In my experience there are a varying degrees of ‘goodness and badness’ in every deal.

I suspect that most seeing the image above will assume that A is getting the better of the deal, and the B guy is getting a really bad deal. Well if B is a major drug syndicate boss , then they might think they both have a really good deal . Assuming A doesn’t have a problem with drug dealing (stop there , never judge a book….)

In business , I think there are three types of deal.

1. Where both sides of a negotiation are already in a commercial relationship.

2. Where one party is seeking to start doing business with a new partner.

3. One off purchase.

There are, undoubtedly, many variations but broadly speaking all three categories cover the majority of commercial ‘deals’.

Despite having been doing it for a long time I can’t say I have cracked this deal business. I would go further and say I am probably pretty rubbish at it. But I won’t say that in case there are some potential customers who may , by default, come across this post. I can recount one incident, where the negotiations were all one sided, in that the customer (type 1 in this case) did no negotiating whatsoever or so I thought.

Myself and a colleague spent half an hour in front of said type 1 , presenting product and prices . He said absolutely nothing, until the end. When he simply said ‘pick up your order from the printer in the next room‘.That man is now one of the U.K’s most successful retailers and is listed in the Sunday Times Rich List. The closest I get it to it , is reading it.

In most cases type 1 deals are not really deals or rather you can rarely classify whether they are good or bad, which in my book means they aren’t actually deals . Let me explain.

You can have a meeting with a customer, with which you come away with an order, contract or promise to buy blah, blah,blah. You feel fairly satisfied or in rare cases ‘very’ satisfied in that the margins are acceptable, the quantities are good , terms are fair and more blah, blah. Yet over a period of time there are loads of things that can impact upon what you thought was a deal.

  • They don’t buy anything like what they said they would
  • After a period (could be a lengthy period) and say thank you very much but we would like some historical financial contribution to help with something like help with marketing
  • They don’t pay to terms
  • They go bust
  • They use the sales data to go and do their own thing

The list is endless (truly endless) . The point I am trying to make is that you never really sure what the ‘Deal’ ever is.

Type 2 is the same but different.

Generally, involves a protracted courting of the potential ‘client’ prior to any negotiations. Followed by lengthy discussions involving terms of trade, finally culminating in an agreement allowing trading to start. You don’t actually ever have a deal as generally it is a dynamic process. The culmination of this process may allow you to look back and say ‘that was a successful relationship ‘ but I would be hard put to describe it as a deal, for the all the reasons described in type 1.

Type 3

I can lay claim to a recent, nay solitary, success here. I wanted to be buy a replacement base layer (something you wear for the ‘non rugged’ outdoor type ). Eventually I found what I wanted, but at a price I was not happy with. I would love to say I then spent three hours haggling until finally, due to my extraordinary talents in negotiating skills, I got it at the price I wanted. But I can’t . The ticket price was £35. The guy took it to the till and removed the security tag.

Shit …..he made a tiny hole in the neck.

We will go to plan A

He tapped into the till resulting in

I can do it for £10.50

Deal ….I replied

So there you are that’s what a good deal is….unless , of course, it falls apart because of the hole or I get a permanent stiff neck from the draught. Then it would be a ‘bad deal’. I am going to have to wait to find out.

So what I’m driving at is that there is lot a chat about good or bad deals. Whether, of heads of state, politicians in general, leading industrialists, even clergy, and a load geezers in pubs, they all bang on about them. But they don’t really exist . Rather they don’t exact in a pure form . The Oxford English Dictionary defines a deal as

An agreement entered into by two or more parties for their mutual benefit, especially in a business or political context

Note the mutual benefit bit. That’s the problem . It’s not possible to walk away from a negotiation assuming there will be mutual benefits. A Deal is a process and it is not until the end of the process , that you find out if it was good or bad . Then, both parties will have their own opinions as to when that process ends.

Here’s another problem. I never know whether I am talking to A or B . The snivelling ‘gits’ never dress in red and always cover up the pointy bits on their heads. Should I be ‘bovered’? Nah…’cos you just don’t know whose got the best deal. Or at least that’s the impression I get from some my customers…..

Can you have too much data?

Yes. I think so ?

For those who remember the days of telephones and telephone directories(especially if you lived within Greater London) that filled an entire bookshelf. Here was a mass of data, which you probably accessed , and I am grossly over estimating, a fraction of one per cent of the data available,during any one year. Moreover that information was out of date the day the directory was printed.

Well jump forward a generation and just take a peak of the following stats….

Everyday …..

294 billion emails are sent

65 billion WhatsApp messages are sent

3.5 billion online searches are made

90% of the last 5000 years of humanity’s data has been created within the last twenty four months. Are we benefiting from it ? At this very moment in time , I would err on the side of No.

Having said all this, businesses grow, develop and prosper by accessing and analysing as much information as possible ……”information is power”. Yet there is a ‘but’. It is the efficient and effective analysis that makes it of any use. Too much data creates confusion, inefficiencies and above all can lead to poor or just downright ‘wrong’ decision making. But we still have to make those decisions and I feel that many organisations, ironically especially the larger, misinterpret data, quite simply because there is too much. I, also, suggest that this is one of the current problems of our supermarkets . They have had a cumulative mass of data over many years and failed to properly decipher their customers psychology and behaviour. Other leaner, newer and sharper players have made better use of their information consequently have a much better understanding of the shopper and their behaviour.

Every day decisions become increasingly complex by the quantity of data available in making those decisions. A visit to any coffee shop is a perfect illustration…what milk would you like?semi-skimmed, full fat , lactose free, goats milk, vegan milk ……? Ok , thanks and which blend….there are twenty seven if you would like a quick look at our blend menu, which is on the other side of our syrup flavouring menu….

Fake news, albeit much clichéd, has been around a long time . In years gone by, there have been many occasions when all aspects of the ‘then’ media exaggerated or used bogus or ill researched facts to back their stories. But today there is so much access to data you would think it easier to verify fake news, yet the opposite is true. When questioning one piece of information there are so many potential sources that if we were honest with ourselves we don’t know whether the source we feel is the ‘most genuine ‘ is indeed genuine or fake.

Yet things ain’t going to change. Or rather they are, in so much as the amount of data will increase exponentially.

The following 2 images are taken from a report by PWC (Price Waterhouse & Coopers)

So what about us ‘littl’uns’. No one gets away with this. Supplier, independent retail, online, and even Jo Public. We have to develop our own coping and analytical methods. It’s as simple as suppliers working out that just because they sell a hell’uve lot of an item that it is a bestseller. It is the retailer making use the most efficient use of their epos systems, looking at social media and being aware of what is really happening out there. It is the consumer understanding what is a deal and what is not. Being aware of ‘influencers’, is the product they are being offered on a web site, what they think it is and do they really know where it is coming from.

Very recently a retired member of the Bank of England Board, was caught by a telephone scam. Although, retired he believed he was pretty clued up on all manner of scams. Yet, the information being given by the scammers seemed genuine. But it wasn’t and he got fleeced straight from his bank account.

Our mobile phones are said to hold more data than early spacecraft. Yet they were able to talk to earth from outer space. Sometimes, I can’t use my phone at the back of my house. In 2014 when NASA launched their Mars probe it had less computer power than your mobile. ‘Why is that?‘You may ask. Answer is quite straightforward. They planned for reliability over performance. Probably says all you need to know.