Post War Britain has been predominantly a consumer led economy. So instead of a retailer’s paradise, why are so many retailing giants and established brands falling by the wayside, and why do a few seem to have the knack of surviving or even thriving?
Rather than laying the blame at a lack of investment, being left behind in e-commerce or consumer trend changes, the truth is much simpler – many retailers have become complacent, having lost the connection to their brand, their values or worse still to their target customer base. The roll call of fallen retailers is impressive, household names in many cases who have closed their doors, forgotten by many except a few loyal customers: HMV, bath store, Evans Cycles, L K Bennett, House of Frazer. Of course, this is not a new phenomenon. Go back 20 years and you’ll dig up stories about C&A, Freeman Hardy Willis and Blockbuster Video. What’s different today is that business failures will have had a much shorter shelf life and often a higher frequency of management / ownership change.
So, if a household giant like M&S can struggle with all the resources and following its brand had, how is it that others are thriving?
Aldi, one of the twin German Discounters as they are known, are at it again. They have recently chalked up a 1% market share increase and 15% sales increase https://bit.ly/2Oj2vjo. What’s driving their continued success? It’s the simple things that matter. Aldi knows itself and where it fits in our lives. It’s not fancy but it’s highly effective. It remains fixated on value for money pricing. It does that through exceptional buying and supply chain. Its customers know there are special lines and when it’s gone it’s gone. But they also know that whatever they put in their basket it will be of a good quality and there will be just enough choice. As a result, the small and medium format stores stay full of customers while its stock flies off the shelves. And finally – they are well managed. They typically have efficient and motivated staff and are super vigilant when it comes to queue lengths and other store experience bottlenecks.
Primark, the jewel in the crown of AB Foods empire, continues to buck the trend. Primark is another value for money brand, putting good quality fashion and basics into the hands of the many. How has it done it? Primark has broad appeal, attracting both the young and trend conscious as well as young families and older shoppers alike. It has not spent £100Ms on a fancy ecommerce website but it does pay a lot of attention to social media, opinion formers and communicating with key audiences. Primark’s team are highly adaptable and agile in their responses to market trends and public opinion and mood. Talk to their staff at the till and you are likely to have just as good an experience as you would at M&S or John Lewis. They seem engaged and genuinely interested and bought into where they work and brand.
The point is that these are not one-off examples or the lucky ones. There are several thriving retails from Lush to Toolstation, Pets at home & JD Sports and they are not all driven by online sales. Retailers would do well to get back to some of the basics of their profession while adapting to the changing world around them and not relying on their legacy or perceived loyalty from the past.
Here are our top six basket fillers for management teams to consider adding to their shopping list this summer:
- DO Focus on Brand. Make sure you are clear on what your brand stands for and what it is promising that’s unique or different enough to be noticed and attractive to the right people. Ensure that everything in your organisation supports that brand no matter how small. Reputation and brand take effort to create, but is quick to be lost.
- DO Remember the Customer Experience. Customers have so much choice these days including online. If you don’t make the experience with you compelling, they will simply walk (or click) away! Remember to create some theatre, the right atmosphere and pay attention to detail through the eyes of your target audience.
- DO focus on your own people. Your people are your brand; it is through them that you are experienced. Look after them and give them support to understand and buy into who you are. The internal culture is a big barometer and measure of how successful you are likely to be. Train them, treat them right or you’ll simply end up with a ‘Minimum Wage – Minimum Effort’ mindset.
- DO look at the whole value chain. It’s obvious for any retail stalwart but get your basics right. Look at the entire Supply Chain, ensure partners are partners, get them to buy into your vision, be commercial with them but with respect. Look at your cost base and question everything about your income per sq. foot but listen to your consumer insight specialists and your floor walkers and visual merchandising experts. Use your Management information but bring it to life with stories and examples when you want change. Work hard with your fixed costs like rental, rates and work hard to adapt.
- DON’T forget to sell. It’s retail dummy. Selling is OK. Too many businesses expect the product to do all the talking. Sales is a profession and therefore takes effort and skill. If you have a clear brand and engaged people, let them get to work.
- DON’T simply compete on price unless it’s a key part of your strategy that is supported with a much broader plan and approach. You are likely to simply eat your margin and permanently damage your reputation.
The UK’s high streets have been struggling for some time. It’s set to get worst with the closure of many betting shop outlets (some may argue that’s a very good thing) adding to vacant plots and shops. As the new season of Retail Executives enter (Kingfisher – B&Q owner sees the arrival of a new CEO later this year) we hope they get back to the floor and back to the basics of retail first principles. It’s what customers want, what our economy needs and their people will thank them for!
Steve Bernard e: [email protected] – Director