Retail is now technology.

Retail is all about change. Formats get reimagined, in-store merchandising changes daily, departments get increased or decreased in accordance with demand or seasonality. Our marketing campaigns move and adapt with the times. If you’re in retail in you’re in the business of change. It’s dynamic, always has been.

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Retail has been to the forefront of technological change too. The very first commercial installation of an elevator by Otis was in a five storey New York department store. Escalators followed soon after and became common place in the US in the early part of the 20th century. The first cash register was patented in 1883. Its development influenced the recording and management of data that had wider implications beyond retail. Retail gave us the price gun, the bar code, modern consumer marketing and even the widespread use of the computer. British tea chain J. Lyons & Co saw the potential for computers in retail as far back as 1947. So technology and change are part and parcel of retail, so what’s the difference with the new world of retail?

Well the difference this time around is the fact that the retailers are no longer driving the change and as a result no longer in control. The change is now being driven by the consumer. And yes that can be a little bit scary.

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Now the big guys are working hard to catch up. Getting their messaging and branding right, across all the channels. Ensuring their on line identity mirrors their in store experiencing as closely as possible. The pure on line guys with their dynamic exponential growth don’t have these issues, or not yet at least. The poor relation it seems in the modern retail age is the independent retail sector. After all as a sector it has yet to really get to grips with the new multichannel environment. The larger chains have departments to look after ecommerce. They have the resources to manage digital marketing, social media, click and collect etc. etc. The Amazons, ASOS’ etc. only live on line and don’t need to worry about the high street physical space. The independent could easily be forgiven for raising the white flag.

 

But before that happens we’d like to put forward an alternative view. Our view is the physical space has a very big future. The small independent retailer has a very big future. You might not think so if you’re to believe the press and current group think on eCommerce. Almost to underline what we’ve been saying for some time now I’ve attached a link  ( http://internetretailing.net/2014/04/most-uk-shoppers-still-prefer-stores-to-ecommerce-study/ ) to the latest research from YouGov concerning UK consumer insights. In brief it suggests that consumers still enjoy the act of shopping in a store. It also underlines another of our beliefs that given the opportunity a shopper likes to touch and see product. It’s no longer an either or question when it comes to Brick & Mortar or online retail. As far as the consumer is concerned it’s all just retail now. The consumer is now on Facebook, Pinterest, Tumble, Twitter etc. and they’re using it for browsing and shopping. Your customer is much more likely to believe a person they’ve never met over you when it comes to reading product reviews.

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Your consumer is now browsing, researching and shopping on their phones and tablets. Are you digitally invisible or will they find you where they are looking? As a retailer you need a digital strategy. Your customers are living in a digital world so it makes sense for you to inhabit that same world. Sound scary? Well it really isn’t. When you strip out the big words and tech speak it really comes back to basic retail. The rules don’t change that much, it still comes down to service, convenience and product. This brings me back to our main point which is the physical retailer will trump the online only retailer every time. If you back up the shop with the eCommerce site your consumer can choose to do business with you in many more convenient and varied ways than they can with Amazon or ASOS. We are shameless in our support for independent retail and their suppliers. We favour the diversity, personality and passion of the independent over the larger chains or online only guys. The future is unwritten, it will involve change, but rest assured if you embrace it the future is brighter than you might currently think. Embrace the technology and use it to win, after all isn’t that what retail has done in the past ?

Is financial solvency enough in the new millennium?

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Is financial solvency enough in the new millennium?

With the 20th Century now well and truly behind us is it time to rethink the way we look at our business models? One of the most important yardsticks when examining a business is whether it is solvent or insolvent. The repercussions for being insolvent are very dire indeed. A business can be cash flow insolvent or balance sheet insolvent. The upshot is however that it is an offence to trade whilst being insolvent. In current insolvency law the area of interest relates strictly to the ability of a business to repay its’ debts as they fall due. As we push further into the new millennium I would suggest that this might no longer be enough.

If we look at our most recent crisis across the globe it was once again sparked off by large financial institutions which were insolvent long before the penny dropped with regulators and governments. If we look at 1929 and the great crash it was again fuelled by large institutions and wealthy individuals such as JP Morgan, Jesse Livermore, William Crapo Durant etc. Our most recent crisis stemmed from a property bubble whilst the 1929 crash stemmed from a stock market bubble. In both cases the causes and outcomes were pretty much the same as people and institutions bought an asset class they couldn’t afford with money they didn’t own. A relatively small group of wealthy individuals and organisations over egged their positions and let their greed run away with themselves and brought the system to its knees. As always there are winners too. Look at Joe Kennedy as he sat idly by and watched the market crash only to pick up the pieces afterward and make a fortune in the process. The transfer of wealth from ordinary citizens across the globe to another relatively small group of individuals and organisations in recent times has been astounding. So can this type of incident be stopped from happening again or are we doomed to repeat the cycle with the arrival of every new generation as they look set to reinvent their very own wheel.

So here’s a thought. What if we had some new and additional insolvency yardsticks? For example what if a company or business was expected to be morally and ethically solvent? Would it be hard to police, could we come up with a set of parameters for such an initiative. Could we write some code to allow for an impartial measure of business moral solvency?

Perhaps we don’t need to. Perhaps we could just get the thought out there to the consumer and allow them to decide which business they think morally solvent. Moral solvency might be a bit of an abstract concept right now as was the idea of breaking up monopolies in the 1800’s but that’s not to say it might not have some merit. If we had a guide for moral insolvency could any of our bankers run riot for the benefit of their own bonus packages. Investors in the main really don’t count for outside of the individual investor by and large the institutional investors primary goal is maximise return largely regardless of where the funds go.

So as you know if you’ve followed previous blog entries I’m all about diversity, the beauty of independent businesses and especially the diverse nature of an independent high street. If we look at the recent corporation tax issues, especially the highly public reaction to Starbucks in the UK and Apple in Ireland, then we might see an opportunity for small businesses in all of this. I would suggest the small independent high street business has much less opportunity to move funds around when compared to the multinational giants. The small business is also highly invested in its locality as opposed to a multinational which views their store as just another cost or profit centre. So could the small locally vested business be more morally solvent than their larger competitors. Again I would suggest yes. I would trust my local credit union more than my local banks, I would trust my local fashion store rather than the larger chains in my town. Why? Because I know them, I see them dropping their children to school, I see them at local sporting events, I see them shopping when I’m shopping. I see them investing in local sponsorship, reinvesting in their businesses and working hard to survive. I don’t believe they are working towards their next bonus but they are working towards getting revenue in to pay their business rates. Rates that pave our roads and keep the street lights on. I’m not altogether sure if Moral solvency would catch the imagination or could be turned from an abstract concept into a business practice. I am sure however that my local high street independents have it in bucket loads when compared to their larger multinational competitors.

Perhaps there’s a thesis or dissertation in this idea or maybe someone has already completed one, if so I’d love to read it. Thanks for reading.

Let’s make multi-channel retailing a by line for a strong independent retail sector.

I’ve just had sight of the latest eCommerce Europe press release and it makes for exciting reading. It gets really exciting if you’re a retailer and even more so if you are getting, or have plans to get, your slice of the pie. The question though is how many retailers are getting their share and if they are not then why not?

Five years ago for many independent retailers the web and eCommerce were asides and worthy of note but it seemed little else. Those that did venture online usually did so by getting a web site built and in all probability collected customers e mail addresses. They did this because it was what you were meant to do and let’s face it, it was fashionable. But what about a return? What about the fact that getting a site built was the easy part and maintenance and management was really where the skill set was required?

Here we all are in 2013 and it seems many independent retailers are more aware than ever of the need to get online. However the game has changed and it’s no longer enough to simply get a web site developed. What is required is a full multi-channel approach to retailing. This can all get a bit scary if you’re an independent retailer without the expertise or budgets of the larger operators who have whole departments given over to eCommerce. But I’d argue that because the Tesco’s, Next’s and Debenham’s of this world have placed such importance on the sector it is now a necessity for independent retail to do the same.

This is where it gets difficult however and insecurity and doubt can enter the equation. Do we have the budgets, do we have the expertise and, in all probability the biggest limiting factor, do we have the time?

Well I believe we do. If you buy into that then we can move the debate forward and start focusing on what makes independent retail great and the many advantages it has in the eCommerce sector.

Let’s start with the fact that independent retail is operated by people who are passionate about retail. That passion might wane for individuals periodically but overall I believe that to be true. If retailers were not, then in all probability they’d put all the hassles behind them and go work for a large multiple and draw a wage every week. That passion usually means they possess product knowledge and service levels superior to the larger chains and online only operators.

Independent retail is not just about commerce as they populate town centres and high streets as opposed to the larger out of town centres. They provide a social hub and fabric as opposed to a giant grey box on the edge of town.

If we look at independent retail as a group then the advantages it has over the oft times bland and uniformed approach taken by the chains is indisputable. But how do we get that message across? How do we let the consumer know that independent retail can offer individuality, range of product and price as well as service levels that leave the chains and large operators in the shade? We would say by taking a strength in numbers approach. Independent retailer’s competition is no longer the boutique or corner shop down the road it’s the multi-channel giants such as Debenham’s et al and the online operators such as ASOS. By taking a new collaborative approach then independent retail can package and market themselves to a wider audience. As I always believed I’d much rather have my largest competitor next door then two miles away. At least then I can compete and even take advantage of their marketing and footfall.

Independent retailers need to play to their strengths, of which there are many. I’ve only touched on a few. The new and exciting world of multi-channel retailing is not a threat but a great opportunity. Okay so you’ve only got 1000 sq foot on the high street. Well guess what that’s a 1000 sq foot more than ASOS. To me that means it’s easier for you to become a multi-channel retailer than it is for them. Did you know the fastest means of fulfilment for consumers whilst shopping online is click and collect? You can do that easy. Did you know 80% of all online searches start out as local searches and that 96% of UK and 94% of US consumers research online before purchasing locally? You know who these consumers are, they’re your bread and butter. Did you know that 87% of UK and 85% of US consumers felt that multichannel was influential on their shopping habits? Well now you do and you can start influencing them.

In short and to make a long story a little longer, independent retail needs to be more proactive and confident when it comes to eCommerce you hold more cards than you realise. Let’s make multi-channel retailing a by line for a strong independent retail sector.

http://www.ecommerce-europe.eu/press/2013/05/press-release-european-e-commerce-to-reach-312-billion-in-2012-19-growth )