Retailing’s Unacceptable Faces

Of course, the week I was away on annual leave (and if you love rain, then my home country Wales, had it in buckets) the two House of Commons Select Committee investigations into those captains of industry, Sir Philip Green and Mike Ashley, or more accurately practices at ‘their’ companies (well, sort of) decided to publish their reports.  Acres of newsprint, hours of air and TV time have been devoted to them, not least as the spat between Frank Field and Philip Green exploded once more, when the former compared the latter to Robert Maxwell, ensuring yet more coverage.

The two Select Committee reports can be downloaded here (Sports Direct) and here (BHS) as well as via the Committees’ websites (Sports Direct; BHS)where much more evidence is provided, and many of the exchanges are documented.

Given this blog’s interest in retail and past views of the BHS collapse it seems appropriate to return to the reports, not in forensic detail, but rather as a snapshot of British retail capitalism.  Let’s start with parts of what I thought were good, concise summaries:

Sports Direct: “A spotlight has been shone on the working practices and business model of Sports Direct. What the spotlight revealed was extremely disturbing. Workers at Sports Direct were not being paid the national minimum wage, and were being penalised for matters such as taking a short break to drink water and for taking time off work when ill. Some say they were promised permanent contracts in exchange for sexual favours. Serious health and safety breaches also seem to have occurred. For this to occur in the UK in 2016 is a serious indictment of the management at Sports Direct” (p3).

 BHS: “The evidence we have received over the course of this inquiry has at times resembled a circular firing squad. Witnesses appeared to harbour the misconception that they could be absolved from responsibility by blaming others. The worst example was Sir Philip Green, despite his protestations to the contrary. Sir Philip adopted a scattergun approach, liberally firing blame to all angles except his own, though he began his evidence by saying he would do the opposite. The truth is that a large proportion of those who have got rich or richer off the back of BHS are to blame. Sir Philip Green, Dominic Chappell and their respective directors, advisers and hangers-on are all culpable. The tragedy is that those who have lost out are the ordinary employees and pensioners. This is the unacceptable face of capitalism” (p55).

The Sports Direct report focuses on a range of practices which can be summarised as seeing ‘workers as commodities (p12) and, the distribution centre as ‘a workhouse not a warehouse’ (p8).  It zeroes in on the use of agencies and their use of contract workers often on very ‘unbalanced’ contracts.  That many of these workers are foreign and as they don’t have bank accounts have to use company pre-paid cards (p14) says a lot.  This is reminiscent of the worst ‘truck’ systems of the 19th century.

The report finds serious failings of corporate governance, management awareness and leadership.  It concludes (p26):

Sports Direct is the country’s largest sports retail outlet, but that size and success is founded on a business model that enables the majority of workers in both the warehouse at Shirebrook and at the shops around the UK to be treated without dignity or respect….Mr Ashley must be held accountable for some appalling working practices at both the Sports Direct shops and warehouses, either for not knowing about them, or for turning a blind eye to such practices in the interests of maximising the revenue of Sports Direct”.

The BHS report has had more coverage than the Sports Direct one and is more personal and extensive.  Philip Green gets the most criticism for looking after himself/family and not the business, extracting huge value but halving the assets and destroying corporate value.  He is accused of obfuscation, concealment, lack of transparency, starving the pension fund, and playing ‘both sides of the deal’ (p34).  Corporate advisors are castigated for their lend their name, take the money, pass the buck approach.  Lord Grabiner lent a ‘veneer of establishment credibility’ (p46) whilst Chappell and RAL showed an ‘outrageous lack of good corporate citizenship’ (p52), an ‘egregious example of individual greed’ (p53) and ‘had their hands in the till’ (p55).  The details in the report are devastating and jaw-dropping – the unacceptable faces of capitalism.

Yet, despite everything, it is perhaps worth pausing.  The final chapter in the BHS report states that the law and regulation, especially on private companies is inadequate and that there needs to be stronger and more proactive regulation on pensions.

We can decry (and I have previously) the behaviour in these cases.  We can rail against the ‘circular firing squad’ and the denial of responsibility.  We can bemoan what we have come to. But, and it is a big but, at this point neither Green nor Ashley has been charged with doing anything illegal (possibly leaving aside the minimum wage breach in the latter); this may come but it has not yet, and it may of course not.  The framework that allows them to operate in this morally dubious but potentially legal way has been (de)constructed by our lawmakers and Parliamentarians.

Pension problems have been with us for decades.  Working practices have been steadily deteriorating for at least the same length of time.  Yet in these areas we have continued to deregulate and turn blind eyes; governments of both colours are guilty.  When will there be action so that these gaps are filled?

Real people are damaged by this mentality of workers as commodities and companies as private piggy banks.  Deferred pay (pensions) are eroded or lost and the public purse has to pick up the pieces and pay the price.  Practices and behaviour such as those exposed in these two reports should never be allowed to happen again.  They are that devastating and important. Lawmakers and regulators also bear responsibility for what happened and the lack of action to remedy the frameworks.

Posted in Agencies, BHS, Employment, Employment practices, Governance, Pensions, Retail Failure, Retail leadership, Select Committees, Sports Direct, Store Closures | Tagged , , , , , , , | Leave a comment

From the Scottish Government’s National Review of Town Centres to the World Towns Summit

Downloadable versions of this post are available here (word) and here (pdf).

The attraction of many international delegates to the inaugural World Towns Summit in Edinburgh in June 2016 was eloquent testimony to the perception that Scotland has led the way in recent years in thinking about and producing action on towns and town centres.  That international bodies selected Scotland as the location and trusted us to deliver speaks volumes about our international reach.

At the Summit, and in the ongoing discussions since, there have been requests to understand what it is Scotland has set in motion.  The danger is that this gets bogged down in detail, so this short, personal, piece is my view of the last 5 years or so.  It is an insider’s commentary (I was on the National Review and am Chair of Scotland’s Towns Partnership), with all the faults that this can entail, but is intended to ‘join the dots’ at a high level.  Figure 1 provides a handy guide to these dots with the detail of the picture drawn available via the hyperlinks (are active in the word document).

Review Diagram

The onset of the ‘great recession’ in 2007-8 produced visible fault lines and scars across Scotland as elsewhere.  It heightened awareness of, and the urgency needed to tackle the changing nature of place and towns and our economic, social and cultural lives.  This is not to say that nothing was known or being done before this point, and indeed many organisations playing a vital role today were in operation then, or that the recession was the only problem.  But, responses in 2008-11 felt piecemeal and addressed symptoms not the cause.

In 2012, Nicola Sturgeon responded to the crisis in town centres by establishing a National Review of Town Centres, chaired by Malcolm Fraser the leading architect and urban thinker.  Rather than focusing on the symptom – empty shops and a declining ‘high street’ – this review tackled the cause – what are towns for and how do we think about and care about place?

Reporting in July 2013, the Expert Advisory Group focused on the underlying rationale for investing in, and re-energising towns.  The social and economic benefits for all sectors of the population, and the essentially sustainable attributes of towns provide the focus for the recommendations. Under an overarching ‘town centre first’ principle the Review lined up six core themes to be pursued (town centre living, digital towns, proactive planning, accessible services, local economic growth, creative and entrepreneurial places).

To a considerable extent there is not a lot new in these areas, but the Review integrated them and aligned them in such a way as to set up a blueprint for action.  To the Scottish Government’s credit they accepted the Review and in November 2013 published their response and call to action as the Town Centre Action Plan.

There are many implications of this at a detailed level, but in terms of policy implementation the Town Centre Action Plan, in my view, stimulated five lines of activities, sometimes producing new things, sometimes aligning existing approaches.

The first of these was a public commitment, pursued firmly by the Minister, Derek Mackay, with COSLA, to implement the Town Centre First principle, not only for retail but for public and other private investment where possible.  Whilst not formally or legally binding the public nature of the commitment has focused attention and actions to stop developments outside existing town centres, where alternatives are clearly available.

Secondly, and more privately, the Minister also pursued internal government alignments and actions in support of the Town Centre Action Plan.  By challenging government departments to pursue actions in support of the Plan, the Minister focused behaviours and thinking.

The various themes of the Town Centre Review and the Action Plan also received attention through a variety of demonstration projects, funded in an attempt to work out what could best deliver change against the themes.  In some cases capital investment was made, whereas in others it is pump priming and revenue coverage.  Not all demonstration projects neatly fit one theme, but the intention was to try things and assess impacts.

Fourthly, and in recognition of the fragmented landscape of bodies operating in the broad ‘towns space’, small-scale funding was provided to Scotland’s Towns Partnership (STP).  The aim was to promote STP as the ‘go-to’ body for towns in Scotland, collating learning and activities from others, providing a single voice and amplifying the activities underway, whether undertaken by STP or by other bodies.

Finally, a Cross Party Group (CPG) on Towns and Town Centres was established, chaired by Margaret McCulloch, a Labour MSP.  Meeting quarterly the CPG provided a Parliamentary forum to debate progress and activities following the Town Centre Action Plan.  Attended at least once a year by the Minister, the CPG reinforced the cross party interest and support that towns and the Action Plan had governed.  It provided a more continuing forum than the annual Towns debate initiated in the main Parliamentary chamber by the Government.

One of the key tenets of the Action Plan was that there is no easy top-town solution to towns and that places are very distinct if not unique.  As such, towns need to be able to understand themselves by self-analysing their situation, assets and opportunities.  Allied to a focus on community and the need for community ownership of the issues and solutions, support was given to a series of tools and mechanisms to aid understanding and change.

A number of tools have emerged from this investment including the Towns Toolkit, The Place Standard, Understanding Scottish Places (USP) and various Town Audit approaches.  Consistent approaches and applications of these tools provides a focus for self-analysis of places and towns and provides a method of beginning conversations about change.  In many cases these conversations have been enabled via an enhanced programme of local charrettes, as a new engagement focus.

Mechanisms to enable change in some cases pre-dated the Action Plan, but received a new stimulus and focus from it.  Business Improvement Districts and Development Trusts are mechanisms that enable new management of assets and places and have expanded since the National Review.  More directly political, the community focus was legislated via the Community Empowerment Act which gives various rights to local communities and helps asset transfer and ownership for community and social good.  The rise in interest in social enterprise, crowd-funding and social investment schemes have assisted in this.

With all this activity and various towns across Scotland trying different things to meet their needs, there is a real question over the impact of the Town Centre Action Plan.  Recognising this, the Government produced, in November 2014 and November 2015 respectively, the Town Centre Action Plan One Year On and Two Years On.  These capture and describe much of what has been taking place generally and specifically through demonstration and other projects.  Each publication has been the subject of a parliamentary debate on the broad topic of towns.  A more formal and structured impact analysis of these activities is currently (summer/autumn 2016) underway within the Scottish Government.

Our towns and town centres have been steadily altered by decentralisation and changing economic, social and technological capabilities and behaviours.  This has been going on for at least 50 years and has culminated in our present situation.  Scotland is not unique in this.  Expecting radical transformation and reversal of these macro-trends in the short time since 2013 is clearly unrealistic.  But where Scotland is distinct is in having a coherent, aligned and formally recognised national plan for how to attempt to reverse the situation, by placing community at the heart of the process.  There remains much to be done but the World Towns Summit was recognition that the first steps have been made and potentially provide lessons for others.

All this effort has gone on in the knowledge that some macro-economic alterations might help the processes, but they have not yet been politically achievable.  Two particular examples are the self-imposed Scottish Government restrictions on non-domestic rates alterations to assist town centres and the (reserved powers) of setting different VAT rates on redevelopment and new build or spatial areas.  There are other levers which might become available to the Scottish Government, and as new post-Brexit and post-election thinking addresses issues of local and other income and taxation, other opportunities to support town centres may emerge.  We are at the start of a journey, with a lot to do, but at least in Scotland we have a road-map or a sat-nav.

Posted in Bids Scotland, Charrettes, Community, Cross Party Group, Development Trusts, Government, High Streets, Place Standard, Places, Planning, Policy, Proactive Planning, Regeneration, Retail Change, Scotland's Town and High Streets, Scotland's Towns Partnership, Scottish Government, Town Centre Action Plan, town centre first, Town Centre Review, Town Centres, Towns, Understanding Scottish Places, USP, World Towns Framework, WTLS16 | Tagged , , , , , , , , , , | 2 Comments

Navigating The New Retail Landscape

Readers of this blog will be aware of the occasional use of guest bloggers and of book reviews.  A couple of weeks ago my colleague Steve Burt showed me a new retail book he had bought, authored by two contemporaries of his and mine.  Both Alan Treadgold and Jonathan Reynolds will be well known to many academics and retailers.   A couple of days later an e-mail flier from Alan hit my inbox, ‘selling’ the book.

Treadgold

It is summer, I’m feeling lazy, the book looks interesting but I don’t have the time to read it just yet.  So, I’ve asked Alan Treadgold to blog about the thought process behind the book and what he hopes it delivers.  His post is produced below; the only problem is that he makes so much sense that I have decided I have to read the book before the summer is out – I could do with some of the optimism about retail that Alan claims to provide and I also like being considered as a thoughtful person (though others will no doubt disagree, Alan sent me an email so I must be part of the target market)!  Getting beyond the ‘internet is here’ axiom is also really attractive and very necessary.

So when you buy or read the book then let myself or Alan know if he delivers on his thoughts below.  Over to Alan:

“Leigh Sparks was kind enough to ask me to write a piece about my new book, “Navigating the New Retail Landscape: A Guide for Business Leaders”.  It has just been published by Oxford University Press and I co-wrote it with Jonathan Reynolds, Academic Director at the Oxford Institute of Retail Management (OXIRM) at the University of Oxford’s Business School, and my long-term friend and periodically colleague and collaborator.

Perhaps the first thing to say is that I’m not an academic.  I have been in the past at Oxford and in Melbourne but both roles were a very long time ago now.  I’m an adviser to companies and senior executives.  I’ve worked in ‘blue chip’ management consulting firms around the world and I’ve been CEO of national advertising agencies and run large pieces of business for global ad agencies.  Retail is the industry that interests me most and, within that, it is the relationship between retailers and their shoppers that is where most of my work is done and my interest and expertise lies.

The idea for the book came from working with and engaging with a lot of senior retailers in a lot of sectors and countries during the course of my advisory work.  What was so striking to me back in 2012 / 13 was that so many senior executives running retail businesses seemed – frankly – lost about how to operate them in a manner to survive, let alone grow.  It really didn’t seem to matter much at all where I was in the world or which sectors of retailing I was working in, the issues of CEOs and their leadership teams were always very similar.  The narrative that retailing was digitising rapidly and that whole sectors were migrating online at accelerating pace was pretty well recognised.  But how to re-engineer and indeed re-imagine entirely a retail business to be successful in this very changed reality seemed to be not at all well understood.  Oh, and at the same time that profound structural change was underway, many leaders also had the far from insignificant challenge of trying to trade their way through one of the deepest consumer recessions that many of us have lived through.

I wanted to write something that I thought could be of genuine usefulness to business leaders tasked with delivering success in radically changed and often, to them, very unfamiliar environments.  I wanted the book to be structured and written in a way that was accessible to that audience but also rigorous in its approach and coherent in its arguments.  That was why I asked Jonathan to be my co-author and bring to the process the discipline of an outward looking academic at a highly reputable business school.

It’s a book in two parts because the narrative is in two parts.  We’ve tried in Part 1 to define the nature of change in the retail industry globally, to describe and define the main drivers of change which are radically and permanently reshaping the landscape of retailing.  Technology looms very large, of course, but it is not the only driver of retail sector transformation.  Part 2 puts the focus on the enterprise capabilities and structures and the personal leadership skills that we feel businesses and their leaders will need to have if they are to successfully transition their enterprises such that they are equipped to be successful in these very changed worlds.  A wide diversity of case studies of varying lengths appear throughout to illustrate the themes under discussion.

Treadgold 2

I hope that what we have written is a book for thoughtful people who understand that the world of retailing is a complicated place and the answers are not simple.  (Anyone who wants to read about the 5 or 12 or however many steps to achieving success in retailing should look elsewhere.  Or better still not waste their time at all.)  Perhaps, above all, two points about the book are important.  Firstly, this is an optimistic book.  It is implicit across the book and in a number of places explicit on the page that periods of great change are also periods of great opportunity.  Opportunity to radically redefine businesses, engage with shoppers in very different ways and leapfrog the competition.  It is not a book about how to mitigate against the risks of failure and business collapse; it is much more a book about how to realise opportunities.  Secondly, while it is not a book with a GPS-style “Roadmap for Success”, it is very definitely a book with plenty of points of guidance for business leaders (Hence the subtitle)  I hope that we have moved far beyond the endless tedium of being told that “we’re all living in an omni-channel” world and instead offer clear guidance on what types of enterprises, what types of skills and what types of personal leadership attributes will be defining of success in the new landscape of retailing.”

Alan Treadgold can be contacted at alantr10@gmail.com

Alan Treadgold & Jonathan Reynolds (2016) “Navigating the New Retail Landscape: A Guide for Business Leaders” Oxford University Press (OUP).  ISBN 9780198745754.

The book can be purchased at the OUP website.

Posted in Academics, Books, Consumer Change, Consumers, Customer engagement, International Retailing, Internet, Multichannel, Retail Change, Retail leadership, Retailers, Strategy, Technology | Tagged , , , , , , , , | Leave a comment

Retail Branding: it’s not (just) private label

Over a long period, retail branding research, led by Steve Burt, has been one of the main areas of research for my colleagues and myself at the University of Stirling.  I have written a couple of things on branding in collaboration with Steve and we have just had a book chapter on retail branding published.  It contains themes I feel quite strongly about.

There were, for me, two motivations in agreeing to write this book chapter on retail branding.  First, I felt strongly we had something to say, as I have become increasingly frustrated and annoyed by the myopia being exhibited in this field.  And secondly, the ability to state this case better suits a book chapter than the ludicrous constraints on journal article publishing now apparent in the parallel universe that is ‘REF world’.

Routledge companian to brand Cover

So our book chapter on retail branding has just been published this month in the new Routledge Companion to Contemporary Brand Management and we thank the editors for providing the space for us to say again; retail branding is not private label.

Branding in retailing is not new, but the modern retail conceptualization is far removed from the original ‘name on the product’ brandmark.  Retailers as brands go far beyond a simple ‘product label’ by positioning the retailer as an organisational entity in consumers’ minds or even developing a personality, ideology or mythology.  The conceptualization and operationalization of the modern retailer brand develops a broad, integrated, brand architecture embraced by consumers, products, stores and the company itself.  It is not ‘private label’ and we should stop calling it that beyond a narrow band of activities which are directly private label.

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Our chapter presents the development and implications of modern retail branding, through the consideration of four issues.  We begin with an examination of the retailer’s identity and the scope for differentiation in an increasingly crowded marketplace.  This sets the scene for a review of retail product brands (private labels) followed by a discussion of the emergence of retail store branding and corporate branding.  The final section examines contemporary issues in retail branding.

Our concluding section covers two aspects of modern retail branding; brand experiences and relationships and retail internationalisation.  As retail brands have become more sophisticated and holistic, so the concepts of the brand personality and the brand experience have become more significant.  The meaning of the brand becomes the driving force for the retailer.  Retailers thus create a brand ideology, personality and impression.  For many the retail brand has become an experience with the flagship store at its apogee.  The internationalisation of retailing has added another dimension to the research on brands and retail branding, exploring brand transference, embeddedness and cross-border interactions.

Retail branding requires careful consideration of how the image and brand are developed and delivered, how they relate to consumer needs, demands and perceptions and an understanding of the importance of economic and symbolic dimensions of activities.  It is not just about sticking a name on a product. And sometimes it does go wrong – how much of the elements of the slide show below (from mid 2000s) has survived Tesco’s problems and failures to live up to the claims?

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We hope the chapter does convey something of the sophistication of contemporary brand management in retailing and how and why it has emerged as it has, together with some thoughts on future issues.  If you are interested (and it is not only food we consider) the submitted word copy is downloadable.  Looking at the contents of the volume as a whole, it looks really interesting and it will be good to read it.

Finally, why am I a little agitated about this and want to restate my denial of private label as retail branding?  It is because of the myopia I referred to earlier; I recently had to amend a journal article in order to get it accepted by an editor, as a referee was insisting that retail brands did not exist, but only private labels do.  It was not a core issue for the article, so we moaned but complied when it was insisted upon.  But as they say in these and other parts – that’s bollocks; this chapter sets out to show why.  Modern retail branding is a sophisticated strategic approach; it is not a label on a product, though that is a part of it.

Burt S and L Sparks (2016) Retail branding, Chapter 33 of Dall’Olmo Riley F, J Singh and C Blankson (eds)The Routledge Companion to Contemporary Brand Management, Routledge, London

And if you are interested, then this file has details of some of the other recent work on retail branding by Stirling retail staff.

Posted in Academics, Brand Extension, Brands, Consumer Change, Corporate branding, Labelling, Loyalty, Private brands, Private Label, Retail brands, Retail Change, Retailer Branding, Retailers, Retailing | Tagged , , , , , , | Leave a comment

An overview of (UK) retailing

One of the common questions that I get asked, generally and by journalists and students, is ‘what is going on in retailing?’  There are many ways to answer this, and in the various presentations I do, some of the themes I feel are key get developed.  But I don’t always write down the thinking or the description academically.

However I have written a couple of chapters in books which are being published this year (one is out and one is due out in August) and they do tell the story of retail change in slightly different ways.  They might be of use to students and perhaps others, so versions are downloadable at the end of this post.

The first is a chapter on Retailing in the latest in the long running sequence of books entitled ‘The Marketing Book’.  Now in its 7th edition, edited by Michael Baker and Susan Hart, this text has become the ‘go too’ book for many introductory courses on marketing that want a non-American point of view.

My chapter – last but obviously not least – examines the key components of the practice of retailing and seeks to investigate the distinctive and changing nature of the retail sector.  As befits a chapter in a book on marketing, it begins with the cultural and consumer aspects of the retail environment.  It then moves to the places and locations where retailing occurs.  Interrelationships linking retail businesses with other organisations are examined, before a consideration of the internal operations of retailers themselves is presented.  The people who take on the running of retail businesses and individual shops, the nature of the selling and retailing processes, and the supply and sale of goods, are introduced and discussed.

Some of it will be familiar territory for those who have seen my presentations.  In putting it together the chapter I did reflect on the key issues today:

  • The transformation in the role of retail location
  • The changing meaning of retail formats
  • The scale and power of retailers
  • Internationalisation
  • Winners and losers from these changes/trends.

I conclude that

‘as retailers are more challenged across platforms and as volatile, restless and demanding consumers seek out what satisfies them, so too the control and power in the situation inexorably moves more towards the consumer and the range of services and options has to more closely fit individual consumer’s needs.  Consumers are perhaps more in control of the retail channel than ever before’.

The second, much shorter chapter, appears is a new volume entitled ‘A Stakeholder Approach to Managing Food’ and aims to provide an evaluation of the development of the food retailing sector in the UK.  It considers the rationale, implications and trajectory of the spatial-structural changes that have occurred (and are discussed in the Marketing Book chapter at a general level).  It situates retail businesses within a network of supply and demand chains and emphasizes dimensions of change, power and competition.

Food retailing today is undergoing a major change.  Discounters, recession, price have collided with large formats, store chains, health and the rise of convenience and the internet.  Local (in various guises) has become a key attribute.

The chapter concludes:

Food is a major component of consumer spending and of consumer life, and food retailing is a reflection of the social culture of a community or a country.  As society has changed and values alter in importance, so too food retailing reflect these changes.  The professionalization of food retailing and its radical reinvention of the post-war trend provided a dynamic country with the retailing it desired and the product choices it valued.  This expansion of possibilities has proved a boon in many ways for many consumers, although it is not without its adverse implications on choice and accessibility, especially in certain locations and for some categories of consumers.

But economics and societies change and values continue to alter.  Food retailing in the UK is at the moment on the edge of change with various competing tendencies.  How these play out in the coming years will be a fascinating story, subtly (and in some cases not so subtly) configured by the decisions of governments (is ‘unhealthy’ food the next tobacco or alcohol?), retailers (can the hypermarket be reinvented?), technology (where can the internet, digital and other technologies take us?) and, of course, consumers (what price/quality balance will become dominant and how do we remove food poverty?).  Food retailing is used by each and every one of us and its significance in our lives, and in patterning our lives, cannot be under-estimated.  Food retailers’ (re)construction of this market is thus a vital component of our food lives and looks likely to be more differentiated than has been the case over the past 60 years.

Full details of the chapters are:

Sparks L (2016) Retailing, Chapter 25, P598-626 of Baker MJ and S Hart (eds) The Marketing Book, 7th edition.  Taylor and Francis, London. [chapter downloadable here]

Sparks L (2016) Spatial-structural change in food retailing in the UK, Chapter 14 of Lindgreen A, Hingley M, Angell R, Memery J and Vanhamme J (eds) A Stakeholder Approach to Managing Food. Gower. To be published in August. [chapter downloadable here]

I recommend both books to you, hope my chapters are of interest within them, and that they put a little flesh on the bones of my presentations.  Comments always welcome.

Posted in Academics, Books, Consumer Change, Education, Food Retailing, Internet shopping, Retailers, Retailing | Tagged , , , , , , | Leave a comment

And now for some good news: Dixons Carphone and Dyson Openings

As promised, after my rather pessimistic review of some recent retail stories in the last blog, I want to turn to something a little more positive.  The stories below that caught my attention are in one way the other side of the restructuring coin that the last blog commented on.  Disruptions in food have come in the form of hard discounters, convenience and home shopping.  In clothing it’s been in supply chains, styling and home shopping.  Technology therefore is a theme as a disrupter, but what about those that sell us the kit?

Two recent openings on Oxford Street have been in the news.  I’ve not been to either, but will do on my next foray to the Brexit-denying capital (London- Scotland solidarity, who  would have thought it?)

Dixons Carphone opened its flagship store in Oxford Street,combining PC World, Currys and Carphone Warehouse, in late June.  It claims to offer new store concepts and features including:

  • Digital feature wall, is the biggest screen on Oxford Street with over 20 sqm of LED screens delivering aspirational 4k content reflecting product categories, brands and offers through 4.3 million pixels
  • Curated product range, featuring premium 4K televisions, an improved interactive camera display, enabling customers to experience and compare cameras and new Dyson and Nespresso stores-within-a-store
  • Greater range of accessories and wearables, with a new Headphone Wall and Smart Watch Wall giving customers a more enjoyable and easier way to choose the right product
  • Focus on Services, with the first combined PC World Business and KnowHow consultation space, which is also fitted with charging points for customer convenience
  • Dedicated Multiplay offering, serving customers’ connectivity needs, including TV and broadband bundles, connected devices, and on-demand content, all in a dedicated space offering Multiplay expert advice

The claim is that the store will combine ‘convenience, curated products and the connected world in the most innovative store yet, acting as a lab to test new ideas and concepts…we need to promote an exciting, engaging and connected shopping experience’.

A week or so late, Dyson opened its first physical store in the UK – the Dyson Demo – which will allow users to try out the full range of electrical products.  Following on from stores in Tokyo, Moscow, Paris and Jakarta (students of international retailing, work that pattern out!), this store stocks 65 Dyson products but is really about science, engineering, design and explanation, as well as testing, demonstrating and using.  Yes, you can buy (in store or for home delivery) but it is a flagship store in the broadest sense of the word.

The Dyson Demo encourages people to be hands-on and to think about the products – following on from the founder’s lifelong mission to meld design and performance in new ways of thinking and ‘bringing engineering to life’.

I am curious to see both stores and to see how customers and visitors react to, and in, them.  I am not sure, for obvious reasons, whether I will make the Dyson Supersonic salon – my time has passed in that regard, but it sounds engaging, if not a little hair-raising.

Further details and photos on both openings can be found in media reports including The Guardian,  Retail Gazette, Retail Week and Design Week. Retail Week also has a nice video of the pre-opening day of the Dyson Demo.

Broadening out, perhaps a couple of further points could be made:

Firstly, despite the doom and gloom and the downturns in many retailers, there are others that are doing pretty well in even these austerity times.  There are lessons to be learned here in terms of the product and consumer focus and it is no coincidence that these technology-based examples are following in Apple’s footsteps. We are seeing the closer merging of in store selling and entertainment, perhaps with added information (and that could challenge the nature of retail employment).

Secondly, the focus here on Oxford Street points to the disruptive nature of our retail and consumer change.  The flagship nature of these stores, at this iconic (though often rather disappointing) location illustrates the changing retail pattern and the alterations underway in terms of the need for, the locations of, and the use of, retail space.  It is also clear that Oxford Street itself is seeking to capture the sense of some of these changes – “first seen on Oxford Street” for example and its own repositioning.What is the balance between flagship(s), other stores, presence in other retailers (shop in shop) and online?  We are all still working this out.Retail space requirements are being rethought place by place and company by company.

And in pondering the space need question, I offer a final store opening via a tweet from The Grocer (@TheGrocer): a Tesco Finest wine bar pop-up in Soho.

Tesco wine Bar

 

Posted in BrickMeetsClick, Consumer Lifestyle, Design, Dixons Carphone, Dyson, Electronics, Engineering, Experiential, Flagship, London, Multichannel, Oxford Street, Pop-Up Shops, Space, Tesco | Tagged , , , , , , , , | Leave a comment

A quiet few weeks in retailing (not)

The last few weeks have been really quiet in retailing – no, just kidding.  What with Brexit – and the uncertainty it has generated – beginning to take hold in the markets, the unfolding BHS and Sports Direct scandals putting retailers in a very bad light, the cost pressures piling up on retail businesses and if you live up here in Scotland, the seemingly endless winter, even my well-honed capacity for doom and gloom is being taxed.

So I thought it was time for a quick roundup of recent things that caught my eye:

Sainsbury and Netto divorcing: the plug has been pulled on the Sainsbury’s great discount experiment, with 16 stores being closed. In one sense it did not surprise me; trying to catch up with Lidl and Aldi was always going to be a tough ask.  The need for Sainsbury to focus on the Argos acquisition makes some sense, but one also has to have some concern here given the apparent Argos reliance on paying for products in dollars.

My Local going into administration: another disappointing end for a retail ‘start up’ though in this case it emerged slightly more fully formed from the wreckage of Morrisons convenience chain. Only in place since the end of October, My Local has not even made it to a year. Morrisons will still be on the hook for some of the costs one presumes; though the Co-operative Group seem to be picking up some sites.  Start-up convenience in a really pressurised market shows how difficult food retailing is currently and the need for focus and scale.

The human factor in both stories needs to be remembered, as these chains employ quite a lot of people directly and support others indirectly – as of course it has to be in BHS and its large scale impact (more on this is coming in our next Town and County Planning column due in August/Septmeber) on people and places.

The Asda Changes: Finally joining the club to make a full set of all of the “Big 4” changing their leaders in the last two years, Asda is about to change its top man (yes, they are all men) after some less than stellar performances in recent years. A restless Bentonville (and other parts of the empire are also having problems) has been linked with a massive price war leading to brokers’ sell recommendations across the sector, but most notably in Tesco and Morrisons.  No idea if the rumours of such a massive price war are true, but the sector really is in a tough place – unless you are a leading discounter, but could this be about to change?

If we move from food to clothing, then the big story is the Marks and Spencer clothing performance.  Well, let’s not look, but rather draw a veil.  Clearly it is not quite a twitching corpse but the latest figures are the worst yet (given the comparisons) and with seemingly no end in sight, the new team (another one) will have to get some quick wins or the last rites will be getting too close for comfort.  Marks and Spencer can’t continue like this and hope to remain intact. The whole let’s focus on “Mrs M&S” is just so misjudged, which is a shame as some of the other ideas about stabilising the business are simply good retail practice (and did contribute to the decline at this point) – but may be coming when people are just about beyond caring. Time will tell. The inability to add up the numbers for the results presentations is unfortunately symptomatic of a business in stumbling mode (group sales were initially claimed to be UP 1.3% but in fact were DOWN 0.4%)

And that brings us full circle.  We can read the Brexit result and the political fall-outs, break-ups, resignations and stand-offs in all sorts of ways.  But it does feel rather  ‘fin de siècle’ with the old order under threat of being swept away.  Chilcot adds to this feeling of things have gone too far and there is momentum to a major re-alignment or new approach.  Much the same can be said about the UK food retailing scene.

Maybe that’s enough ‘we’re doomed’ and it may be overdone as I write this in the aftermath of Wales going out of the Euros, so the next blog will pick up on a couple of store openings that also caught my eye. Promise.

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