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.

Syte for sore AI’s…..

Or rather Artificial Intelligence, as I am indulging in a little bit of ‘ Red Top’ headlining. For those of readers who are not from the U.K., and I think there maybe two, it relates to headlines created by the more ‘popular ‘ (a phrase I use with a certain amount of reservation) newspapers . But I digress. This is one technology, that I suspect, will have the biggest impact on retailing in the the both short and medium term future.

At the forefront, in terms of retailing, is a company called Syte. They are an organisation based in Israel that has created a product that I suggest is quite simply extraordinary. It is so very simple in its execution yet undoubtedly highly complex under the ‘hood’ . The basic principle is you take a pic of an item, you are then showed where it can be bought, are there any equivalents ?are there different versions ? Where’s the best price? And the list of possibilities goes on and on. The images below are examples of  articles of clothing ..

syte

They currently hold a data base of analysed images of over 112 million. This number is updated live on their web site. This is by no means exclusively clothing. This is reflected in the organisations that are currently working with Syte , ranging from Samsung through to Argos and Boohoo.

I am not a spokesperson for this company nor am I  qualified  to make judgements about the efficacy of Syte.ai. So I don’t want to go on about them too much.   But what I can see is that this is the immediate future of retail or at least a significant part of it.

There will be those who say that is ‘all well and dandy…but I can’t afford this form of technology….’ . Of course,  however  I think there are two important considerations …

  1. Being aware of what the big players are doing and how they are doing it.
  2. Today, high-end technology has a habit of trickling down the chain very quickly , and much more affordable versions are likely to come into play making it more accessible and useable.

There is a third factor concerning technology and that is some of it has a very short shelf life. In the absence of a ‘crystal ball’ we can only make judgements on what we have and know. As most major IT organisations are sinking vast sums of ‘dosh’ into AI, we must assume that it is at very least part of the short-term future of retailing.

For those who are not convinced that his holds any relevance for them, I will finish wth a qoute from Sun Tzu  (a Chinese military strategist from over 2.5 thousand years ago , who is strategies are still used today).

“If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.”

 

It ain’t half crap Mum….*

Empire pie was a product launched by Marks & Spencer’s, a couple of years ago. Much lambasted at the time not for its taste but its imperialist sounding title. It seems to have seen that one through. Both Julia have since had experience of this beast and seek to lambast it because of its taste or rather lack of it. Driving back home late one night on our venerable motorway system , we bought one (two actually, as they are singles) knowing there would be nothing in the fridge when we got home . What we did not know was that there was nothing in the pies either (in terms of taste rather than filling).

We had long been a follower of Marks & Spencer’s food , since they first developed the concept . Then it was innovative, tasty and a place to seek out when looking for something a little different to eat . But, in our opinion, no longer. Whilst Food still shows growth for the nation’s ‘favourite(?)’ multiple it is being chased rapidly by its competitors.

Their food offering has become just another player, whereby the competition has caught and in many cases overtaken them . There is no research (that I know of) it is subjective opinion. Yet I think their financial performance sort of supports the comment that products like empire pie are symptomatic of many of today’s multiples. They are just not trying hard enough. If you are going to succeed in the market place you have to be ahead of the game not catching up. I think M&S have lost their Mojo.

The recent tie up with Ocado, is not radical, it’s just catching up or at least trying to. It’s catch up, which in today’s climate is just not good enough. It’s probably good for Ocado(not that convinced about that either) but I can’t see it being that great for Marks. It’s well and good having super efficient fulfilment centre but you still ‘gotta’ have the product.

That’s enough of having a dig at M&S. The point is these very same issues exist in many of the U.K’s multiples. They will have to reinvent the wheel or rather the way they retail. It will not be an exercise for the faint hearted, but regrettably the faint hearted have, by definition, faint hearts and eventually pass away. I believe the tools are there to make change and most of them(but not all) are technologically driven . But Innovation implies creating your own tools.

So let me paint a picture. You are a CEO just appointed to a major national retailer, in order to ensure the company’s future. You are about to present to the Board your findings and recommendations….

Hi Guys and Gals(not a good start as there are probably no gals, but guys are ok as I am sure the boards of many Nationals are full of ‘hipster types’) these are my two possibilities to ensure the continued existence and of course ‘growth’ of this amazing organisation

1. We introduce currently available technology , which will enable the consumer to take a pic of the terrific jacket they have seen somebody wearing on the bus to work. The app will identify the brand, equivalent alternatives , plus ad ons then tell the consumer where to buy it. Of course there will web sites offered but it will also show stores where these items can be purchased. It will then tell the consumer how to get to the stores from where they get off the bus. As the consumer enters the store, which will know that the consumer is coming and what they are looking for and can then suggest other similar items in the store………….

2. We develop some new fairly bland tasting pies with slightly contentious names…..

Chairman’s(probably not a hipster)response…

Pies…it’s what we know best….

Perhaps a slight exaggeration but I think it’s a reasonably accurate illustration. And yes, this technology does exists. And I am not talking advanced pie making.

Time is running out for many of the more established national retailers. Part of their problem is their size . To make radical transformations will cost a huge wad of cash. For the newer innovative retail entrepreneurs, it is part of their organic growth. For those who think that new embryonic retailers will never threaten nationals, think on. Amazon started from scratch less than twenty five years ago. So those seeking a more immediate and less drastic fix, as you are not selling as much you would like, try looking at what you sell . Sell stuff people want, not what you think they want. If you don’t others will and are…..

* for those who don’t quite get the title, and think it is just the ramblings of an old fart. You are right. But if you are inquisitive, replace the word ‘mum’ with ‘hot’ and google…

Ten predictions for IT developments in retail, during 2019…..

Hands up ! These are all US based and originate from the Forbes Technology Council . However, their development will , for the most part, impact way beyond the shores of the ‘Good old US of A ‘.

1. Voice shopping in cars. This does not mean lowering your windows and some ‘geezer’ at a set of tragic lights trying to flog you a bottle of coke. Most new cars are now sold with installed apps allowing you to use functions such as Amazon’s Alexa. There is the likely suggestion that in America, billboards will start displaying ads prompting you to scream at your dashboard and the item of your dreams will be delivered by the time you get home .

2. The return on investment for AI investment can be clearly understood. Now I am not entirely sure I understand the statement let alone the concept. Probably the best way to explain it , is from a site called http://www.kidbox.com. They sell boxes of kids clothes. You complete a ‘quiz’ , select a price and they send you a box of kids clothes and you pay for what you keep. Now the key is the quiz. It is a series of questions that help them decide what you may like . The secret here is not a group of kid box employees sitting down and deciding the answers to the quiz that child in question would like to wear Harry Potter hats and pink trainers . The results are determined by artificial intelligence.

3. Computer vision may move to less exciting parts of retail. Computer vision is the ability of computers to see images in much the same way as humans. An unpleasant thought, if you took it literally, such as when you walk into the store cctv blares out …

Oy! you ugly git, you are wearing one lousy shirt go to aisle 4 and caste your eyes on these beauts’

But it is not that far removed. A confectionary store in the States called Lolli & Pops, uses facial recognition to recognise loyalty customers when they walk into the store. Amazon Go takes images of products put into the basket of consumers in store and avoids the need of a check out . Then there is the tracking of footfall in store , seeing the pathways and actions of their customers. There is a whole lot more involved, but I think it paints its ‘own picture’.

4. Direct to consumers growth maybe muted. This is something that most can relate to and that is a brand selling directly to the consumer. The brands are finding it increasingly costly to find and maintain the channel to the consumer. It is an area that I know most retailers of both types, online and high street and increasingly wary of. That is to say suppliers going directly to the consumer. So, maybe, there is a shaft of light here.

5. Instagram could challenge Amazon’s dominance on mobile shopping. In the States Amazon has 140 million followers whilst Instagram has 100 million and they are about to launch their own shopping app. I can understand the theory because of Instagram’s influence on the consumer but I can’t say I completely agree with the analysis. For starters, Instagram does not have the infrastructure. It does not have the database (twenty years of Amazon trading) and quite simply I don’t think it has the comparable knowledge. Maybe in five years but not in 2019.

6. Cross border commerce may no longer be a choice . I think this heading is slightly counter intuitive. It means that because so much trading is done cross border. It cites Amazon once again , where their revenues cross border have increased by over 50% in the last two years. The suggestion is that all online operators must consider their cross border activities. To be really frightened, just examine how much product via Amazon is sold into Europe directly from China (over 40%).

7. Social media platforms could become e-commerce platforms. This is already happening, so I am not sure why this is such significant development. Yes, they have huge numbers (instagrams 1 billion active users) and yes they they may well take small slices from the likes of Amazon, but they don’t have the structures, as already but more significantly they don’t have the data and analytics that Amazon has accrued over the last twenty years.

8. Click and collect will come of age. This an economics issue. The cost of delivery is increasing and eats into margins particularly if the first delivery fails. Retailers will focus on increasing their ratio of clicking and collecting.

9. Independent subscription continue to lose subscribers. Well this comes as no surprise . Apparently the fall off rate is 40% within the first year. This is where you you give a load of dosh every month and you get a free razor and a bit of shaving gel. Or a ‘surprise box’ of organic veg , a good chunk of which gets chucked away . Personally, I have thought for some time , or ever since we were offered a fresh flower subscription of about £12 a week (£500 p.a.!) that this was an unsustainable model. Well it seems to be panning out that way .

10. The aisle could become more interactive. This comes as no surprise. It will enable retailers to become interactive and enhancing the ‘retail experience ‘. It will also involve the tightening of the online/offline experience.

Me thinks Forbes set their ‘technical council’ a brief of a list of ten and they started to struggle at nine and ten as they aren’t uniquely technological . Eight looks a bit like a combination of two and three. That said some might thing all these bear no relation to their own business. This is clearly not true , as they may be techniques that are not within your budget but they are all developments that will affect your business. If we don’t see them coming we won’t know what’s just smacked us in the face.

Where are the Leaders when we need ‘em ?

Churchill, Corbyn, Thatcher, Stalin, Napoleon, Philip Green, Beckham, Gandhi, Pol Pot, Che Guevara, Ernest Shackleton, all have something in common. In some form or other, or by someone or another,they have been seen as leaders.

I suggest that there are three types of ‘leaders’

1. Those that are appointed, anointed or elected eg heads of state, heads of organisations.

2. Those that inherit eg natural progression through an organisation.

3. Those that have carved their way through an organisation, such as by dint of personality ,and wisdom or other ‘personal combinations’ like personality and violence.

Anyone who goes on a course to learn leadership skills may in some quarters be defined as a leader. But, in my book, this does not qualify anyone as a leader anymore than someone who goes on a language course automatically becoming a linguist.

There are no doubt other types but I reckon that in general they are just subsections of the above.

If you ‘win’ a war but loose an election. If you are successful with one football club but not another. If you have been involved in a number of bankruptcies and then a successful venture does it make you any the less a leader?

Captains of industry, is a term often used to refer to the head honchos of major businesses. But I am not convinced this immediately makes them Leaders. I cannot consider that the likes of Philip Green is to be defined as a leader ( I will not apologise for not using his correct title, cos I don’t think it is his correct title). Some would argue he created a successful organisation employing thousands of people . I propose he created a vehicle to make as much dosh as possible. Nothing wrong with that. The acid test would be how many of his employees would follow him out of the trenches.

Politics is littered with the term ‘leader’. Leader of the opposition, leader of this group or that group, leader of the house, leader of a party, suggesting that most politicians are a leader of some sort. Whereas the truth lies nearer that very few of them are not, and those that have a variation of the title are there by a convoluted electoral process, including in some cases nobody actually wanting to do the job as it is toxic.

The media revels in headlines concerning weak or strong leaders without reference to the circumstances or the relative strength or weakness of the organisation they lead .

It’s unlikely that Alex Ferguson would have been a great leader of Southend United. Gandhi is unlikely to have created such a massive following if he had been brought up in Ireland. Bill Gates might never have created any empire if his parents had been farmers.

Some leaders are undoubtedly ‘born leaders’ . The likes of Genghis Khan, who was born to a family of leaders. Of course, he lead by fear, yet, according to historians, he was respected and those that who followed him, including the conquered, were well rewarded. The term ‘captains of industry’ was first used in the USA in the 19th century . It referred to commercial success but also philanthropy and attitude to the workforce . Latterly the term has been hijacked for those who only tick the commercial success box . For Captains of industry read more Bill Gates than Phillip Green (more robber baron, and that’s being very polite). I am not just picking on him, but he is very easy pickings.

‘Great’ leaders, such as Gandhi, Mandela, Napoleon, Churchill and Lincoln, were also seriously flawed. But often it is the flaw or flaws that make them ‘great’ in their time. Whether stubborn, vain, or just very focused, whatever their belief they were able to convince large numbers with similar beliefs that their path was the one to follow, and were the ones to follow .

I would suggest that the world’s current turmoil is aligned with a lack of leadership in many fields, industry, arts and media, spiritual guidance, and sport. Of course there are highly successful individuals in all walks of life but there are very few(currently I can’t think of any ) that large chunks of society would see as a true ‘leader ‘. So I can’t even begin to define something that currently does not exist in its true form. However, I feel that is, also, very disingenuous. I think there are many out there who are true leaders but operate in micro scenarios whether it is the coach of some local kids football team, or the manager of a small department in a large organisation, the leader of a local church, temple or mosque. These, and many others, are leaders who inspire and nurture those they lead. But they all keep their heads below the parapet. Society needs leaders that can be seen, in order to be inspired and nurtured, but I can’t see any…..

“Where have all the ‘leaders’ gone ?

(For anyone who might be interested the song was ‘where have all the flowers gone by Peter, Paul and Mary).

Undaunted by the big beast….

James Daunt , formerly one of societies ‘ pariahs’ (investment banker) decided in 1990(aged twenty seven, I think) to open a book shop in central London. He opened not one but five. He loved books and he loved bookshops even more.

In 2011, the ailing High Street book shop chain Waterstones , on the verge of bankruptcy, was bought out by an investor who asked Daunt to be come MD. He took the chain from the verge of bankruptcy to a vibrant and highly profitable portfolio of over two hundred and ninety stores. Furthermore his methods are, I believe, worth considering by many multiple and independent retailers.

‘It was a strong culture, born of the [former owners] HMV and WH Smith mindset, and to my mind it was utterly bonkers,’ he says. ‘You were trying to run the same bookshop up and down the land; it was centralised. Coming in as an outsider, I thought, “How do you change that, and then change it without breaking it?”

These two former owners tell their own story ie one has gone bust and the other whilst profitable, it is with little thanks to their High Street stores . However that was part of the problem and he needed to change that.

‘I came from an independent bookseller in a world of chains, and I loathed chain retailing. I needed to survive as an independent in a Waterstones world. And you rely on quality and creating shops customers want to be in.’

Being a bit on the lazy I shall continue to quote Daunt himself . In this case it is not only easier but his words tell the story better than I can .

‘Staff are now in control of their own shops. Hopefully they’re enjoying their work more. They’re creating something very different in each store. We have a lot of different markets.’ In what way? ‘Much as Asda sells different things to Waitrose. If you pile up the latest celebrity thing in Hampstead for 1p, it ain’t going to sell. And if you pile up an esoteric history in Gateshead, it isn’t going to shift. We have different books on display in Harrogate than we do in Kensington, for blindingly obvious reasons. There’s a different economy outside London. In Middlesbrough half the high street is vacant and there isn’t a lot of money. It’s a town that’s in big trouble, but our shop has reinvented itself there; it’s got rocking horses and pretty much all day long pre-school kids are sploshing about with paint. It’s not the most profitable shop, but it’s got spirit.’

In the Kensington branch they sell a lot of Scrabble and Monopoly. In St Pancras it’s novellas that you might finish on your journey: ‘Those sell in huge quantities.’ In Trafalgar Square it’s Union Jacks; in Walthamstow, they shift ‘a ton’ of camera-lens mugs (left). Huh? ‘It’s a mug with a lens on it. We sell billions.’

 

He got rid of centralised buying and created regional buying which immediately reduced returns(unsold books are returned to publishers) from 25% to 4%. This lead to a huge reduction in shelf space not being taken up by product that was not selling .

A particular favourite of mine is that he stopped stores having tables at the front with ‘bestsellers’. An especially brave move as they accounted for the best part of £27 million in revenue. However, their bottom line contribution was minimal and ‘best sellers’ in any product category (apart, maybe, from food) is often a very artificial construct.

His view of Amazon is of interest and once again I shall use his own words …..he is talking specifically about Jeff Bezos…..

……..driving the most enormous beast of a company that is getting bigger and dominating the world. In that crude sense, it is extraordinarily impressive. Just unbelievable. The drive, the quest for perfection, the sheer audacity of it, the chutzpah.

He goes on to explain that whilst Amazon accounts for 30% of book sales in the U.K. they are not booksellers. They are, essentially, a platform for selling books to people who know what they want .

But, and there is a biggish ‘but’ ,can this be done with other retailers ? I think it can and what’s more , I think if High Street multiples are to survive they have got to embrace localisation. Or at very least create innovative and interesting environments that actually make the act of shopping pleasurable, informative ,interesting and above all profitable.Product areas such as food are more difficult, yet I have already posted about a small convenience store chain that started in the financial crisis and has developed into a highly successful chain by focusing on an extreme form of localisation.

James Daunt has succeeded in an era which is very hostile to the very existence of a ‘shop’. He has rejuvenated an ailing retailer in a period of financial instability and in-spite of the world’s newest and most potent online behemoth. I think the model is worth looking at , albeit will need adapting for different product areas.

He may not physically (there again he may for all I know) climb rocks however in terms of retailing, what he has achieved makes climbing Everest seem like a walk in the park.