Nostalgia…retail’s false friend or worse?

As two more High Street ‘favouritesthreaten to disappear, much of the media shed crocodile tears over their likely demise. The real tears will be shed by their employees and creditors , particularly the smaller ones, who in turn may also loose jobs as a consequence.

Senior management , in addition to some journalists, said it was down to Brexit and online competition. How so ?

Toy R Us appeared from the States in the 1980’s. This retail invasion created its own havoc. Many long established independent toy retailers closed unable to compete with these huge toy warehouses. At the time as a potential customer (father with small child) I found them soulless, unhelpful and clinical. So they remain. They changed little as the travails of their US parent company, already in Chapter 11 , prevented any real investment. If it was the Brexit and online , why have competitors such as the Entertainer , a private company with nearly 150 stores in the U.K. and various stores overseas in such diverse nations as Azerbaijan and Pakistan, and Smyth Toys, with over 110 stores in Eire and the U.K. flourished as Toys R us have faltered .

Maplins is a very different ‘kettle of fish’. It is a British chain, being started by husband and wife in Essex in the 1970’s . However, they have too, been strapped for cash over the last few years and were taken over four years ago by private equity. Personally, I felt their offering was very niche, even ‘nerdy niche’. My experience within store has always been excellent. I say my experience, I mean annual visit to spend £7.98p on something I needed but didn’t really know what it was. And I think therein, lay the problem. The core of the product range being very nerdy, consequently many of their potential regulars knew what they were buying and could get it off the internet. Finally, the stores did not attract the female consumer reducing their potential target audience

As with the demise of C&A, Woolworths, BHS et al, the media shrieks ‘crisis on the High St’ seeks out consumers for quotes, which are more than often phrased in some similar way to the following….

…we will miss X from our local High Street……we have such fond memories when we were 6 years old (for 6 replace with any number as long as it 5 years from your current age!)

What you don’t hear is we spend fifty quid in there every month…in other words the consumer stopped going there. The retail environment is not sustainable on nostalgia alone. Nostalgia to be successful has to be ‘created ‘ in a twenty first century environment. It has never been any different . In the late sixties and early seventies , nostalgia was crushed by the advent of the modern supermarket. Over a period of less than twenty years , quite literally tens of thousands of corner shops closed. The press, once again, headlined the loss. But it was not all bad. For many employed in small independents, were re-employed by the nationals and found a structured retail career that would not have otherwise been open to them working for local corner shop.

There are good reasons to be wary of online operations. Currency fluctuations are a constant concern for all retail organisations, throughout the world. The aberration that is called business rates, is a major bugbear. Yet many retailers continue to thrive. The reasons for failure are sometimes complex, but invariably there are common issues, over leveraged, lack of investment and the belief that because the consumer used to like coming through the front doors, they will continue to do so. The U.K. High street still has many chains that are hanging in there by their fingertips. They are often recognisable by the drab and dated interiors, inadequate stock, poor ranging , and the obvious lack of custom. Invariably if you walk into one and it feels like a 1970’s , it probably is. That’s not nostalgia.

A bizarre consequence of nostalgia is the resurgence of the ‘LP’. It is believed that nearly fifty per cent of purchases are made by people without a record player. New record shops have consequently sprung up. Which is great but is it sustainable? Most of those who have opened these shops are eager enthusiasts, not retailers. I am a child of the sixties and apart from the album covers, I never thought much of the product then. When cds arrived , most couldn’t wait to get rid of them ( the LP that is).

Nostalgia should not be confused with tradition (recent post). Tradition is doing something in the way in which it has been done for many years . Nostalgia is harking back to something in the past and having warm cosy feeling about that ‘something ‘ . The commercial danger lies in not defining as to whether there are any real benefits from either to the business and more importantly are either hampering the business.

As is often the case, the media is often to blame. Only today in the Sunday Times , a journalist (fortunately not a financial journalist) states the failure of Toys R us is due to kids not having toys anymore. What utter tosh. The market in 2017 was approximately £3.5 billion and is estimated to grow to £5 billion by 2022. That’s a load of toys, what is relevant is where they are bought.

Guns…Killing machines..or..defensive essentials?

No I am not going to write about guns. ‘Cheap shot’ maybe ! Just a quick way of getting your attention. Or at least I hope it is. What I do want to talk about is perception. However, guns are what got me thinking after the recent shootings in yet another school in the USA. How is it that virtually the entire world thinks the Americans attitude towards firearms is completely bonkers ? Yet (most)Americans think the rest of the world’s attitude is bonkers. And what is this to do with retailing, High Street, consumers, Internet and the machinations of running a commercial enterprise?

Perception is the answer. Or at least in part. So I remembered an article I wrote for a trade magazine about three years ago. I don’t think I am an idle git, but others may have a different perception of me ! If they only read this one post there maybe a reasonable rationale behind such thinking, as I have reproduced it for the rest of this blog(with some minor changes)

Sir Dave Brailsford (Team GB & Team Sky cycling Head Coach) examined the effect of perception on the performance of world class cyclists. Gary Zukav (American spiritual teacher, former Vietnam special ops vet and advisor to the American security services) says

‘….what we believe is based upon our perceptions….what we perceive depends upon what we look for….what we believe determines what we take to be true…what we take to be true be our reality….

Ah well! That’s great stuff. So what has it got to do with every day life on the High Street? Back in ‘lala’ land, and talking about a bloke who probably assassinated more people than Attila the Hun and another who is responsible for a dubious explosion in lycra wearing , at this stage, probably not a lot, but hopefully, all will become clear or at least clearer . The initial relevance is that both of them need to have a very good understanding of the human psyche.

Pre 2000 , the only interesting comment about the car, Skoda, was the joke that the way to double its value was to fill the petrol tank. In 2000 it was taken over by VW. VW invested money, engineering ’know how’, tough quality control measures, and set about the enormous task of changing perceptions. Part of the strategy was the simple technique of model names eg Superb, Rapid and other seemingly daft names. A little like calling a garden shed ‘boutique’ or ‘deluxe’, it is still a garden shed. However, combined with a VW reputation, perceptions did start to change. Now, the cars regularly win ‘What Car of the Year’…’Best Car of the year’….’Motor Mechanic Nerd Award 2014..’(no it doesn’t exist). Sales are strong, there have even been waiting lists at times, yet our roads are not flooded with them. There are still perceptions. This time some of it relates to the way in which the potential buyer believes they will be perceived by other road users. Tough nut to crack.

Poundland do a very good job in telling everybody that everything is £1(actually it is no longer just a £1). They don’t claim to be the cheapest, sometimes they are, and sometimes they are not. However, Aldi and Lidl try and create the perception that they are the cheapest. December 2014 , Waitrose sold a Gressingham duck breast for £5. Lidl sent out flyers shouting about an offer for one day only that the very same piece of duck was £5.99.

Apple could be considered the masters of ‘perception ‘. They not only create a product that the consumer perceives as being the ‘best’. They create a metaphorical club to which the consumer, wittingly or unwittingly, wants to belong. Though they occasionally get it wrong. a couple of years they said that they believed the consumer did not want a large screen phone. Samsung did and introduced a model, which sold well. Apple now sells load of large screen phones.

The inevitable question is what has this to do with any of us, unfortunately everything. Everything is perhaps a slight over exaggeration, but it is critical to any retailer, in whatever format to try and have an understanding of how the consumer perceives the product and the outlet from which it is bought. Unfortunately, because our industry does not have the resources of Apple, nor for that matter does it have any spare resources least of all financial, it is a tough ask.

As to how important it is to the independent retailer, perhaps we can consider two major retailers that have the resources but may have got it wrong in the past. For years, Marks & Spencer’s dominated their market sector. They did not perceive they needed to accept credit cards, they did not perceive they needed to advertise. They were wrong on both counts and paid the price. They lost market share and they lost shareholder confidence. Consequently, they started with their own credit cards, then they accepted all the major cards. They are now one of the highest ad spending retailers on the High Street. The second retailer up for the award of not understanding their customer, could be Tesco. Dominated the grocery market for so long, thought they knew and understood their customer base, and then pop it all goes south.

Once again, if there are no resources to investigate and react to perceptions, what is the point in writing about it?

With no financial resources, perhaps a little time and thought could be expended. The First thought would be accepting that maybe the retailer’s perception of itself is different to that of the consumer. Discovering any difference, could be a pleasant surprise, equally it could be unpleasant. Either way, it is perhaps worth investing a little time to find out if your concerns are unwarranted or are some changes needed.

A suggestion would be to try and step outside of your business, whether it is retailer or internet , and try and look it at from your customers point of view. It maybe even worth a shot at asking a few friends or relatives , who have no connection to, or knowledge of, the business, to visit your store or site and make purchases(you may have to fund this !)ask questions, seek advice and generally be a purposeful yet needy customer.

Whatever the results, it would be a useful exercise, as it will confirm you are, either,on the right track, or you are way off beam. The likelihood is that you will find opportunities for change and be somewhere in the middle. No matter what industry we work in, we all work in a slightly cosseted environment. The majority of independents are always looking to improve their business, but not always sure of how to do that. The areas that first come to mind, are store refits, staff training, new product, product display, and pricing policies. For online operators change store refit to redesign of web site. Yet how many can really say they know what their customer expects when they come in store and what they feel like when they walk out. Even with the regular customer, who you assume is happy with everything because they keep coming back. Are they buying some stuff elsewhere as well because you don’t stock it? Or maybe they perceive you to be expensive in some areas? This being a perfect example of perception.

Simplistic, perhaps, but because of the word limitation of these articles, simplistic it has to be. So back to the King of Lycra and the Trained Killer. What do they know that is of interest the retail market? Well, with the King of Lycra, he is evaluating how his team can best understand and alter their perceptions, when necessary, in order to beat their rivals and create the best performance. Which surely is what most retailers aim for in one way or another. The Trained Killer makes for a more exciting start to this article.

If you don’t like the results of any research you may conduct with your customers, you can always shoot them…..

Do I think the American President ‘s view of having pistol packing teachers is just a different way, of looking at things ? Do I ‘eck!

I think that the short piece below, taken from a web site about English language and its usage , sums up perception in everyday lingo..

When I used to work as a florist, by the end of a busy holiday there would be only mismatched dregs to make arrangements out of. So, we had a little game: Someone would make the ugliest flower arrangement possible, and we’d put a giant mismatched bow in the middle of it, and we’d watch to see who bought it. Invariably, a customer would pick it up, deem it “exquisite”, and buy it. And, invariably, an older woman we worked with would say,“There’s a seat for every ass.”

Why the dive… the bottom?

Image result for cartoon images diving to the bottom

No matter what the market, no matter what the product , no matter what part of the chain , and for the most part it does not matter where in the world, eventually organisations follow the same self imposed self -destruct mechanism of the pursuit margin reduction.

In a climate of overinflated high end salaries, and obscene wealth, profit, in itself has become a ‘dirty word’. Yet no matter how philanthropic an organisation a clear margin of profit is essential even if it is only   ‘to philonthrangate’ (I’ll save you the time-it doesn’t..).

Image result for graphs showing reducing profits

Yet we are all guilty of, at some point, chasing the ace to the bottom of the pack. The image above shows profit reducing as the demand declines.However, my issue is with declining margins before demand hits maturity. In many market places we have the strange habit that the higher the volume, the market chases the price down, even at times when the supply is not great. History constantly repeats itself with playground crazes . As the demand starts to fly, the price starts to plummet. Then supply starts to exceed demand and most players end up with stock and no profit . The trick here is always to get out just before the top (like any commodity) the general principle is do not place that last order ! Or as one (sanctimonious) customer said back in the days of the millennium

I had a great year for the millennium celebrations…

How so? When everyone else had such a terrible time….all being left with unsold stock

I replied…

I didn’t buy anything!

Was the rapid retort ….

Crazes ,are unique in their behaviour patterns and perhaps not the best example. so put them to one side, I will also avoid cliches involving the words ‘profit and sanity’. Invariably those who most quote it are the biggest offenders. And we can comfortably ignore the mega brands such as Apple, as they tend to be the exception to every rule.

Take some of the U.K’s High st giants : M&S and Tesco.

In the early part of the 21st century M&S started to suffer from more agressive competition. one of their initial responses was to introduce lower priced and poorer quality product . This failed dismally, rapidly and just as importantly, continues to fail, shown in poor sales figures and lower profits. Of course there are other factors involved , but in essence they got involved in a game they could not play and still cannot. Don’t get me wrong they still make healthy profits but not to the level they had been in the past. It may seem rather arrogant, but I firmly believe they did not really understand their own brand or at very least they misunderstood and misread consumers perception. Against this backdrop competitors such as Uniglo and Zara have blossomed. Yes, agressive pricing but very acceptable margins and constant product development.

Tesco, when suddenly faced with the likes of Lidl and Aldi tried to fight back on price alone (as with other major supermarket chains) and failed to capitilise on their own USP. Only now are they all starting to reaffirm their positions but they have lost a lot of time and margin in doing so. Now I have just read that they are starting their own discount chain!

Carillion (aka Tarmac – didn’t know that !) is one that baffles me. Once again a monster that could not have known what it was doing . Pitching for government contracts at presumably very low margins in order to grow their turnover. Yet, they knew their debt levels, they knew their costs, they knew  what their immediate commitments were (the contracts they had won) and they knew virtually to the penny their cash flow situation ….and they still screwed up….commercial madness.

For small independent organisations, whose resources are far smaller , the rationale is far more understandable. Yet, unfortunately, the consequences are similar if not quicker and more final. I come across businesses in our market place who are sinking under the weight of decreasing margins plus decreasing turnover. They are relying on trying to stem the fall with price alone. They tend not to look for alternative and new product, new routes to market and additional service levels .

Major airlines such as British Airways decided to pursue the budget operators on a price to price basis. The result are lower margins and a damaged reputation , consequence of cost cutting .

And then of course there are the online traders, the ‘divers’ extraordinaire ‘. They can do that standing on their head – (diving is easier that way). Well at least those selling on the Amazon market place as the system drives the price down to lowest acceptable price by any particular seller. This is an over simplification, but as Amazon is the world’s second biggest (Walmart is still king) retailer, this has a huge impact on prices.

Within our own industry we have examples of the perfect response to the ‘dive to the bottom ‘. About seven years ago,every independent retailer (entirely uncoordinated) decided they could compete with discount operators and supermarkets at Halloween . They decided to select, stock and sell product that the consumer would not find in the multiples at margins , both cash and percentage, which provided healthy returns. Yet there appears to be a reluctance to repeat this with everyday operations. Some may say, justifiably, it ain’t that easy….no it’s not, but it has to be better than diving to the bottom.

To enjoy being in the sea you don’t have to dive under it . And if you do, you have to know what you are doing ……

Online operators….all that is glitter is not gold…

Anybody who thinks that putting their unwanted Christmas pressies online and making a fortune , need think again. Well not quite true ‘cos if they cost you nothing , you will make something. That’s if you sell them. You, then, have to think if you don’t want them, why would anyone else? Ten years ago it may have been different . You still wouldn’t have made a fortune, but you would have probably made something.

The pattern is similar for online retailers. Five years ago they would have made good, relatively, easy money. It is a very different story today. There are few bricks and mortar retailers, in any market that would not say when asked ….I am being affected by online traders…In the U.K. online accounts for nearly 19% of all retail expenditure (world’s highest percentage). This means that for every £100 that used to be spent in shops ,£20 is now spent online. What is more , now £11 out every £100 is spent via a mobile device.

Retail life is very different. Online retail is even more different. There are a number of major issues, now facing online operators, that have arisen within the last five ‘plus’ years.

Stand alone web sites that were successful in the early days are now struggling against much bigger competitors who have much deeper pockets. A reality that is little different for any retailer.

The costs to market have dramatically increased. To keep yourself in front of your consumer has become a very expensive exercise. Furthermore, it is constant. The investment for back office structures and technology is high and constant as the technology changes , virtually daily, and becomes increasingly costly.

The costs of service have risen dramatically as have the consumer expectation. Today, the consumer expects next day delivery, 24 hour customer service and more often than not free or very low delivery charges.

The World Wide Web is exactly that. Your online competitors maybe based in Bristol or Beijing.

And of course, the elephant in the room , Amazon (and to a lesser extent eBay ). Let’s not forget that the elephant has been an extraordinary enabler for many successful online businesses. Starting over twenty one years ago, growing exponentially year by year, but in reality not really coming onto the radar in a more general sense until ten to twelve years ago, Amazon has become a retailing ‘behemoth’. Through the next six/seven years they developed their market place putting the consumer, very much at the forefront of their focus. Amazon suddenly became a huge cash generating machine and big players ignored them at their peril. Now few can afford to ignore the beast. Quite literally, there are few parts of our everyday life that their tentacles do not reach.

Being a huge cash generator does not necessarily equate to profit. Far from it. As a legitimate operator it is extremely difficult to create a working margin, especially with low priced items. As many will tell you, if your product costs you ‘zilch’ you would be hard pressed to earn any money on any item retailing for £2-2.50 . After commission, VAT, postage and operating costs there is nothing left . Yet items still appear for less, which is why I used the word ‘legitimate’ traders.

Therein, lies a further obstacle..non legitimate traders. I would rather not use the term illegitimate, as many are on the ‘edges’. Much of what they do may not be strictly illegal but is highly questionable. Because of the ‘world widelyness ‘ of the web it makes it very easy for these traders to dip in and out of whatever market they like, virtually with impunity, with little chance of any authority having the resources or inclination to investigate.

Amazon, itself, whilst panned for paying minuscule amounts of tax, for many years made no profit at all, it was all ploughed back into the business. Closer to home, Ocado, the UK’s leading online grocery site, established over seventeen years, took over ten years before making an operating profit.

What to do? There is no doubt that online will continue to harvest an increasing share of the retail market. But what is also true is that within the next two-three years that market place will be very different to that of January 2018. The technology will continue to develop, logistical challenges will increase , the consumer perception and expectation will change, costs are likely to increase and margins will be squeezed further. The latter is quite simply the continuing cycle of any retail development.

I am not expecting bricks and mortar retailers to shed any tears. However, there are many who think that all online operators are ‘thieving gits!’ or as one customer very recently said in a rather more restrained manner ‘the authorities should stop Amazon and anyone who sells on them…as they are ruining everyone’s business ….’

I have no doubt that within ten years ‘traditional online retailers’ will be bemoaning the fact that their business is being desecrated by ‘dronetailers’ who are sending ordered product down to a device around your wrist(no it won’t be a watch because that will be imbedded into your other wrist) which will 3D print your order within ten minutes….and then replace it every 12 months with an updated version…or, maybe someone will get a building, fill it full of stuff and get people to come along and buy the stuff….don’t bet against, Amazon aren’t.

The problem with glitter is that most of it gets blown away or hoovered up….

Traditions….what are they? …and are they of any use?

Over the last 18 months many have expressed their dismay at the demise of many of the UK’s traditions. Apparently many of these have been lost to outside influences and there is a desire to reclaim them.

What exactly are these traditions? And more to the point why are they being missed ? It maybe a lazy technique but I feel the burning urge to list some of those that have gone..

  • Bear baiting
  • Cock fighting
  • Persecution of catholics
  • Persecution of Protestants
  • Colonialism
  • Serfdom
  • Slavery
  • Lousy pub food
  • In many cases, lousy beer, as well
  • Criminalisation of homosexuality
  • Bastards (in this case-illegitimate children)
  • Duelling
  • Child chimney sweeps
  • Unchecked child abuse
  • Kids working in coal mines
  • Corporal punishment within schools

I am in no position to judge what is good or bad, yet all of the above would have been active for extended periods of time during the last six centuries, some , obviously, would have been more recent than others. I am in no doubt that there would be some who wished a number of the items in the list were more prevalent today.

The type of traditions that I prefer to reflect upon are

  • Bog snorkelling
  • Queuing
  • Humour
  • Tolerance
  • Cream teas
  • Believing a ‘cuppa’ is best first response to any problem(despite now being a nation of coffee drinkers)
  • Politeness
  • Innovation
  • Irony
  • Creativity
  • Honesty
  • Independent
  • Democracy
  • Supporting the underdog

Some of these maybe over egging the point , but many have a dewy eyed view that Britannia was one big pool of milk and honey , from which everyone drunk. It was never so, far from it.

“Whatever!” Referring to a more recent verbal tradition …”what has this to with the price of bread?”. A lot as it turns out.

Very recently, within our local shopping parade , a bakery has just closed . This Baker was part of a small chain that was first established about 65 years ago. For many years it was the ‘go to’ bakery and even made and supplied Winston Churchill’s 80th birthday cake (perhaps more to do with him being the local MP) . However, during the last ten to fifteen years it failed to adapt. It relied upon the wrong traditions (thinking customers wanted more of the same), failed to invest, innovate and create. The product was just not good enough, the staff were poorly paid and poorly trained . It allowed its customer base (it is the perfect customer base for high end, high margin artisan style baking) to go elsewhere.

On the flip side, Julia and I have just spent a weekend in 14 century house(hotel), where the owners have managed to develop a modern successful business, by combining over six centuries of tradition, with 21st century techniques, through investment, creativity and innovation.

All organisations, big or small gain, from looking at traditions, and learning from them . What traditions should be discarded and what traditions help shape and develop their future . The usefulness of a tradition can be defined as to whether its continuation, or reintroduction is to the future development of an organisation or that of society.

Know your customer!or lose them….?

Handing over my customary packet of biscuits (2 this time, nothing to do with Christmas, but will come back to that later) and the customer responded

Thanks, it surprises me that the majority of our suppliers don’t understand what they need to do to get an order ….

We, then, had a discussion about knowing your customer. I have to point out that this is the only customer to whom I give a packet of biscuits anytime let alone every time . Moreover, if I didn’t do it all it would not effect the level of business I get from this particular customer but the rationale underlines the need to knowing the customer. This knowledge is probably one of the most important part of any business , especially within retail and at every level of the chain.

For many years retailers have invested vast amounts trying to find out more about their customers. Whether it be via market research, focus groups , consumer panels, loyalty cards, and more recently ‘algorithms’. Yet, I believe they all have their failings . The first three, plus other similar techniques are flawed in many ways. They are an artificial construct. They are driven by the information the retailer asks for , and they work on relatively small samples. Admittedly ,these samples are then subjected to statistical analysis but as we all know with political polling this is a science that is not a particularly accurate one . Consumers or customers of any sort are prone to respond to questions and discussions in a very different way when not faced with real decisions.

Great example of market research being ignored

Market research indicated that consumers would never buy sony’s Walkman cassette player that didn’t have the capacity to record and users would be irritated by the use of earphones. The Walkman went on to sell 330 million units.

I strongly believe that algorithms plus massive data analytics, whilst being very powerful tools, have a degree of unreliability built in, because they rely on patterns . We, as humans, very often make decisions that are not the consequence of patterns or that pattern may not actually relate to the apparent purchaser. My Amazon order history is a case in point.

I would suggest that Amazon’s analytics would offer a number of potential profiles such as

  • Married with young family
  • Married with older children
  • Married with with grandchildren
  • Married with no children but has wider family
  • Married with no children but close friends with children
  • Any of the above with eclectic music and reading habits, plus outdoor recreational interests

The truth none of them are really comes close to an accurate customer profile relating to me or my purchasing preferences.

The point I am trying to make is that no matter who or what (organisations) you are aiming to trade with , you have to engage with them. Which is why many organisations are looking at the way they relate to the partners in their particular chain. I have always questioned the rational behind most multiple retailers policy on not letting the buying departments develop relationships with their supply chain. It says more about their inability to train and trust good professional buyers as opposed to a patronising, and insecure view that every buyer is going to be corrupted by the evil temptations laid before them by suppliers . As a consequence it leads to a lack of real product and market knowledge within certain product sectors . I believe that many of them are now paying the price.

Steve Jobs of Apple used to quote Henry Ford ….

If I had asked my customers what they wanted, they would have said ‘faster horses’

Apple use a technique called ‘ethnography ‘, which translates into watching how people react to product in their stores. Now there is very little actual selling activity within their stores. It seems to be more about interacting with the consumer and getting to know more about them.

With all this accrued data, they then create product that the consumer didn’t know they needed. That surely is really knowing your customer.

I go back to the 2 packets of biscuits . I bought 2, not because it is Christmas but because I like nuts. For the infrequent visit to our biscuit tin(actually sealed plastic container) I try to ensure there is a biscuit with nuts, despite our visiting daughter having a nut allergy , they are there for me. However, I know that the majority of the staff at this customer prefers chocolate. On proferring both packets on my arrival , the chocolate pack was politely whipped from my hand…

Thanks very much that one will do nicely , you can have the rest …

Not quite ethnographic, but I try to know my customer…

Good day sunshine…..

There is a lot wrong with our society, there is a lot wrong with our economy, however , occasionally the negatives should be put into some perspective in order to shine a little Sunshine into our lives.

It could be said that this does not have a lot to do with detailed retail analysis. Loads of people might suggest that neither do any of my blogs. Yet the emotional state of an economically developed nation has a huge impact on consumer expenditure. Consequently anyone who as a consequence of reading this feels even marginally more positive and spends anything, no matter how small, I get to be personally fulfilled as having done my bit for improving the economy. For starters I am quids in, as I have just spent £8 I wouldn’t have otherwise spent !

I make no apologies for lifting some of these small shafts of sun directly out of an article by Times journalist – Alice Thompson.

The UK is still the fifth largest economy in the world. In 2016, it achieved its highest level of foreign direct investment, beating Germany, France and Spain, up 7 per cent on the previous year.

Unemployment is lower than at any time since Harold Wilson was prime minister.

We remain the most generous country in Europe in terms of private charitable donations, according to the World Giving Index.

While the Paradise Papers may make it sound as though the superrich are avoiding all tax obligations, most are not: the wealthiest I per cent of Britons, earning over £150,000 are paying 27 per cent of all income tax.

Education is improving. Britain is now home to the world’s top two universities, Oxford and Cambridge. The most deprived children are 43 per cent more likely to go to university than they were in 2009. There are also 1.8 million more children being taught in good or outstanding schools than there were in 2010.

In the arts, British musicians and singing artist singers , accounting for 17.1 per cent of the global music market.

In a world dominated by male political leaders we have a female prime minister and an array of high-powered female politicians, including Ruth Davidson and Nicola Sturgeon in Scotland, Arlene Foster in Northern Ireland and Amber Rudd at the Home Office, with Cressida Dick running the Metropolitan Police, and London has a female fire chief. One of the world’s highest earning female business women, lives in Stoke and is the joint owner , with her brother of BET365 (albeit an online betting firm), earning nearly £200 million in 2016.

This country has become more integrated and cohesive in many ways. Our capital city has a Muslim mayor, Sadiq Khan, whose father was a bus driver(which he is keen to tell all who would listen-my words).

There were other items in the list but rather more subjective. But I can add a few objective facts of my own.

Approximately 1.4% of the U.K. landmass is covered by buildings, as defined by houses, factories, schools,hospitals, public buildings, shops, in other words virtually anything that is has been constructed and raised from the ground. A figure, I would suggest is well below most peoples perceptions.

The U.K. is the highest producer worldwide of wind energy , currently accounting for 11% of our total energy needs in 2016.

The list of British actors that dominate American drama seems endless…Damian Lewis, Idris Elba, Chiwetel Ejiofor, Hugh Laurie, Judi Dench, Colin Firth, Dominic West, Keira Knightley, Ben Whishaw, Helen Mirren, Christian Bale………

Over 44% of London is covered in green ie parks and gardens etc, making it one of the greenest cities in the world. Last month Europe’s largest urban wetlands opened in East London.

Even in politics, whilst constantly under public scrutiny, the strongest impact by any extreme right wing Party is that of UKIP, which polled at most 12-13% prior to the EU referendum, dropping to under 3% when it was deemed to have done its job. Whilst in the most stable of our neighbours , France, Germany and the Netherlands, the current level of the extreme right wing parties swings between 12-20% of the electoral vote. Furthermore, with the possible resurgence of Berlusconi in Italy, it makes our current political scene look relatively benign , despite its somewhat inadequate performance.

As measured by deaths per million, alongside Sweden we have the safest roads in the world (by a large margin).

We have a world champion formula one racing driver, world champion heavy weight boxer, women’s cricket World Cup champions, both women’s football and rugby teams are amongst the world’s best . Many of the world’s best cyclists both male and female.

This is all well and good, it does nothing to address the disparities we have within our society and some of the bizarre political shenanigans that go to shape the country we live in. There are, however, sections of the U.K. population that believe life was much better during the 1950’s and 1960’s. Many of those were not actually born then and a large clump of those that were, have a very distorted view of the way things were . I think there is no harm at, occasionally, looking at what is good now, as well as examining and trying to right what is wrong.

I make no apologies to non U.K. readers( of which I know there a few) as it may seem like flag waving . But I believe it is true for nations to look to their strengths in order to help right the weaknesses and to help the weakest .

Be afraid…be very afraid….or not ?

Is this the future of retailing ?(click on link below)

Or is it this….

Or even this…

The first is a ‘staff’ free convenience store ,being developed, in China  . The second is vein (yes, as in ‘blood’) scanning under trial at Costcutter. And the third is a 17th century book shop in Canterbury. No , I don’t think so. Or rather they will be only a part of the future of retailing . Apart from not be able to build anymore 17th century shops, as I am sure loads of high street would want one, change is so rapid within retail it is not easy to see where it is going .

Visualising the air space just above your home stuffed full of drones delivering all manner of items, is not that comfortable. Online shopping, after twenty years, still under 20%.

Apart from the UK and Germany, market shares were comparatively low in many European countries. In 2015, the average online share of the European countries surveyed was 7.0%, 8.0% in 2016 and is expected to reach 8.8% in 2017. Figure 1 shows the UK online share was 16.8% in 2016 and is forecast to be 17.8% in 2017 (in 2010 it was around 9.4%). The countries with the highest online shares of their internal markets are: the UK (17.8% forecast for 2017)..

It would be naive to suggest that this will not continue to grow but it would also be naive to suggest that it will wipe out the High Street store.

The three examples have their own usp’s that should help reinvigorate the high street environment.

China Store 

The main benefits accrued are cost

Vein scanning

Security, convenience and cost saving

Canterbury book store

Environment, experience and expertise 

Quick puzzle….what do the first and last, potentially, have in common? Answer: they could both use the same technology as in the second .

Whilst knowing that the consumer is looking at spending more on experiences over and above product, they will still need to buy ‘product’. New shopping centres are adding more eating places, cinemas, casinos…..attracting the experience spend. Without the shops they cease to be shopping centres. Which may happen.  If it did some of the consumer spend will revert back to the High Street . 

Now here is my next theory. Within five maybe ten years, the best online operators will have reached their maturity , operationally and  consumer acceptance. Assuming they can all deliver a nano second after you order, even if you live in the Scottish Highlands, what would be the main point of difference amongst them ? They will all be selling the same stuff, they will have accumulated similar amounts of data analysing their target consumer, which surely only leaves price. If this happens then I can see that the creative retail entrepreneur will start to look at alternatives . I can see this alternative being a very different yet exciting High Street retail environment.

I have always welcomed and embraced  change (most of it). Retailing is going through, perhaps, its biggest change since the advent of the supermarket. There has been much pain, and there is pain to come. Yet I believe there will be a complete regeneration. Those who fear change tend to harp back to the ‘good old days’. A time when there was widespread discrimination of every type, women knew their place, housing with no inside toilets, awful pub food, rubbish coffee, sliced tasteless white bread, black and white tv,smog , only able to take fifty quid when you went abroad on holiday. Oh! and less I forget the ability to drive without worrying about drinking, no awareness of domestic abuse….ignorance was bliss…….‘Bloody ‘ell life wer’ great’.

We have a penchant for nostalgia, especially when society is undergoing much change . We can refer to the retail market to look for examples, the recent surge in demand for vinyl LPs(when many of those buyers don’t have turntables) , increase in the sale of printed books and old style confection . Traditional shopping has a future, I do not believe traditional retailing has .

Some of the very big high street retail fish in the U.K. market place have many problems. Much of which is embedded with the company culture and infrastructure. They are the ones who should be  really afraid.

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.