It never ceases to amaze me the extent of the coverage the retail sector receives in the media. This is probably down to many reasons, not least of which is that everyone shops at some point and therefore has a view on who they like and who they don’t. Retail is also the most obvious bellwether of economic and consumer confidence. It also gives a very quick reading on how shoppers are behaving.
Then there is the increasing interest in the profound changes affecting the retail industry around the world. It was a topic and theme that was at the heart of this week’s annual Retail Week Conference in London which brought together over a thousand retail professionals. It is one of the best ways to get a snapshot of one of the most challenged retail markets in the western economy. For me, one of the retailers to best sum up where we now are was the Chairman of the John Lewis Partnership, Charlie Mayfield. With one of the best performing department store and supermarket businesses in the UK, he would appear to be well positioned. Indeed he is, but he was quite categoric that retailing was at a point of “profound change”.
Change is being driven he said by the economy, the ending of the retail space race and the threat of the property bubble bursting, technological change and changing consumers. Other retailers were clear that we are at a point that looking back from five years time will show retailing to have changed dramatically.
Charlie Mayfield set out some of the ways they are investing for the future with a different approach to stores and a major investment in online and mobile platforms. But with his background in consumer goods brands, he set out a compelling argument that retailers needed to adopt a new way of thinking about their businesses. Of course, the traditional retail matrices for measuring and forecasting business still have to apply but he said he believed we were now living in a brand world. In a brand world, consumers are driven by brand values, brand trust and product innovation. Retailers should therefore plunge deeper into understanding more about their customers and more specifically their best customers because they are shopping you across all channels. Your best customers are far more likely to increase their spend with you if you communicate more effectively with them.
The brand world is also therefore an omnichannel world where shoppers don’t think twice about which channel they use: the store, mobile, online, catalogue etc. But all have to resonate with them and work for them. As Charlie Mayfield said, it is highly dangerous to conclude that because online sales are increasing, you can cut costs in your stores. That will ultimately destroy the brand because it is undermining the brand experience.
Your best customers want it all - but why shouldn’t they? They are saying they like your brand and want it to be consistent. Sounds simple, but so many retailers appear slow to respond. As Peter Fitzgerald, head of retail at Google UK stated with frustration in his address at the Retail Week Conference, the number of retailers with a web site adapted for smart phones and mobile interfaces had increased only marginally in 12 months. Consumers are increasingly unforgiving. It really is time to be customers right at the heart of all your thinking.