Why the dive…..to 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)

https://youtu.be/hYN3gozk4fo

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.

And..so 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…

http://www.retailresearch.org/whosegonebust.php 

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.

Death of a salesman…..or not ?

Just whispering the word ‘salesman’ will send many rushing for shelter, either through fear of being sold something they don’t want, can’t afford or just being bored to death by an unrelenting sales pitch. Trust me, I know , I have been one for most of my working life.

Throughout modern commercial  history , say the last one hundred years, going from one extreme, second car sales, double glazing through to Charles Ponzi and Bernie Madoff, salesmen have not always garnered much respect within society.

In my experience the salesperson, no …’salesman’ , as even today the vast majority of those in sales are men, the ‘profession’ has gone through various cycles. The thirties through to the sixties, they  were commercial travellers. In the U.K. these were often grey striped, black coated, bowler hatted ‘gents’ with a sample case. Often travelling by van or train. Mid sixties through to the late eighties were the ‘sales representatives’, sharp suits and Ford Cortinas.  The gold standard often came from food and confectionery companies such Mars. Their training was extensive and intensive, yet when released into the field they were little more than order takers as their brands were so strong.

From the mid nineties onwards, technological developments, increasing pressure on costs saw many organisations slashing sales forces as easy financial savings . The days of how many calls can be made in a day, are over. The days of orders takers are fast disappearing.

Buyers are looking for a lot more value beyond just a binary transaction, the sale and purchase of a product. They want insight and partners who can help them grow their business. This takes a whole new level of competence.

“The top-performing companies now focus their sales on industry or niche expertise to ensure that clients get the best results. These corporations realise they have a re- sponsibility to deliver results for the client, not just make the sale.

Raconteur report: The Times, September 2017

The sales function should now seek to show the client how they can help develop their own business. In order to do this ethically and effectively the sales person must believe in the organisation and its services and products , they represent. Maximising the sale, without benefiting the client results is very short term, ineffective and sours client/supplier relationships.  In today’s climate this is not an acceptable nor conducive  way to a successful commercial relationship.

…Sales people are becoming more like business consultants and consultancies, such as McKinsey, Boston Consulting Group or Deloitte, and are increasingly having to go out there and sell their services,” . “Everyone is having to offer genuine business insight right now.”

Ian Price- business psychologist at Recludo Consulting.

 The nature of the job is changing. As it redefines itself so the numbers will decline but the professionalism is and will continue to change and improve. It must in order to survive.

So, apart from being one most of my working life, why is this of interest ? Because it has vindicated my own belief. Organisations need people to create a symbiotic and mutually profitable relationships between existing and new customers. Symbiotic because they need to learn from each other. Mutually profitable,  because that is the nature of the contract. A buys from B. If A is not profitable they will no longer be a client of B. If the reverse is true then A will loose a supplier. It is part of the sales function to understand the needs of the ‘buyer’ and match those products and services that meet those needs . Part of that process involves an element of trust. The ‘buyer’ should be able to trust the information and data from the supplier.  The supplier should understand the requirements of the buyers and the market within which they operate . Often a complex procedure if executed properly, even with basic products. It is no longer about ‘selling a load of gear!

Finally, I come back to the ‘salesperson’ rather than ‘salesmen’. It is never been a profession that has attracted many females. No doubt due, in part, to its dubious associations with second hand car salesmen, unethical practices, golf club/football talk ‘boys club’ image . Yet in my experience those women I have come across in sales have been far more effective than their male counterparts. Perhaps the redefining of the role will encourage more women to enter this, increasingly professional and rewarding career. So perhaps it is the death the salesmen , but it it is being replaced  by something very different and a ‘salesperson’ does not quite do it justice.


Much ado about nothing….


Maybe at the very end of the sixteenth century , William discovered that little happened of any importance in the Northern Hemisphere during August. Consequently, he decided to write a play so titled. Apart from Kim Jong un, everyone else sods off, or the media gives the impression that little happens apart from natural disasters.

So here are some of my picks of ‘nothing much adoing…’

Health

Up until the last few weeks the government has banged on about five a day healthy eating. At the beginning of August a study , said this was nothing like good enough and we should have ten . By the end of August, the following was in  The Times

If you obsessively count every piece of fruit and vegetable in pursuit of the magic “five a day” it seems you can relax — one of the largest studies of its kind has concluded that there is no point having more than three.

People who ate three or four large portions of fruit and vegetable a day were a fifth less likely to die early than those who had less than one but eating more offered no extra protection, research in 18 countries found.

Then there was ……

Low-fat diets could increase your risk of dying early, according to a large study that adds to confusion over healthy eating advice.

Those who ate the least fats were a quarter more likely to die during the study, suggesting that what people eat instead of meat and dairy products could be even more dangerous.

Those who ate the most carbohydrates were 28 per cent more likely to die during the study. The Canadian researchers called for global dietary guidelines to be revised to warn against white bread and rice……

“When you emphasise lower fat people replace fat with carbohydrate and the harm of refined carbohydrates has been shown by our research,” said Mahshid Dehghan of McMaster University in Ontario, who led the study of 135,000 people in 18 countries over a decade.

So that’s all straightforward then….until next week. Can say I have  not seen anything about red wine recently. That is often touted as the biggest health seesaw , one day good, one day bad. Four glasses a day, half a bottle …or nothing, who knows ? There has, however, been a pronouncement on prosecco. It’s bad for your teeth.

Society

Next up are driverless cars. following Gove’s pronouncements on electrifying anything that moves by 2040, Oxford University August gushings (or rather one of its professors. That is what they do when the office is on holiday, academics that is) are pontificating the impact of driverless cars.

Driverless cars will lead to the creation of huge urban sprawls as lengthy commutes become painless and workers flock to the suburbs, an academic has claimed.

Timothy Hodgetts, from Oxford University, said reduced travel times in vehicles that allowed passengers to work, combined with high property prices in city centres, would cause ever-spreading “suburbanisation”.

He doesn’t specify whether they will flow out to the suburbs from inside the city , or ‘in’ from the countryside. Well, whatever, presumably it would be good for wildlife because driverless cars will be taught not to flatten hedgehogs, foxes, squirrels, badgers,cats and the odd magpie.

Brexit

UK Govt

We need EU workers…we need to cap EU workers….EU citizens are welcome…except on Tuesdays….we need to think about what we need …aah thought about it and we need to do some research…there will be no hard Brexit barrier between Northern Ireland and Eire…we are talking to Trumps Mexican wall planners…we will borrow supermarket scanners to check the border posts on incoming goods …

The EU

No..maybe…no you can’t …you need to pay us 42 million trillion wongas….no of course it’s not that much… we don’t need to tell you anything …..if you except elderly Germans with dementia, ex French presidents’ mistresses and retired polish jockeys , we are sure the freedom of movement can be sorted….do the British Government always take so much time off..

In short, little has happened . Can so many achieve so little….
Korean Kim and his arch enemy ‘The Donald’ , have to their credit not taken August off. The former firing off his favourite toys and the latter firing off his favourite tweets. Or maybe they have taken August off…..

What happens in the Southern Hemisphere in August ? Don’t know …nobody in the North tells us…

Natural disasters 

Natural disasters have no concern about whether people are having time off. The horrendous storm that struck Texas, killing up to fifty, displacing tens of thousands and destroying billions of dollars of infrastructure has dominated the world’s media . The storms that have hit the Indian sub continent, killing at least fourteeen hundred and displacing over forty million , has also been covered….just .

My point here is probably blindingly obvious . Despite the fact that a bucket load of the world’s media (or at least in the northern hemisphere..it is winter in the south ) are in Tuscany, Thailand, or idly frittering their down time in their back gardens (all members of the media have back gardens ), there are still a load reporting much about nothing. 

So if it is not about shortage of resources, what is that deems we are more interested in a relatively less impactful natural disaster in the US as apposed to a rather larger one in Indian sub continent ? This is a question, not a judgement ….