Customer behaviour has completely changed, borne out of:

  • Necessity – closure of brick and mortar restricting choices.
  • Scarcity – panic buying of national brands forcing private label substitution.
  • Accessibility – avoiding exposure to large groups of people is steering them to new channels. 

The pandemic has increased demand for private label products across many sectors, outpacing sales of national brands, creating an opportune moment for retailers to define (or re-define) their private label strategy. 

Success will elevate profits, whilst failure could wipe them out totally.

________________________________________________________________________

Julian Grindey is an energising and inspirational MD| COO| Trading Director, skilled in leading profitable change and transformation, inspiring strategic vision and commercial delivery and in driving retail and digital growth. Proven in delivering exceptional growth from turnarounds and scale up, in key omni-channel operators, including private label and international product sourcing strategies.

_________________________________________________________________________

In 2020, private labels in UK grocery retail grew to 46% of the £205b sector sales*, up over 4%pts. in the latest 12 months, and 40% of those who switched brands are likely to continue purchasing a new brand post lockdown.** leaving traditional brands in fmcg, consumer electronics, and apparel exposed to threats from distinct private label retailers, poised to drive sales and margins.

Private label retailing is a skill which many don’t fully appreciate, mastering it will:

–      motivate customers to switch to you.

–      boost gross margin contributions.

–      enhance your value credentials.

–      cultivate brand loyalty.

–      increase brand advocacy. 

The common mistake retailers make is they don’t define their brand purpose, culminating in an inconsistent proposition across product development, merchandising and marketing. They fail to build customer trust. 

Their price positioning is too frequently focussed on entry level, failing to promote overall brand quality. All of which leads to poor cash profit performance and reputational risk.

Critical steps to a winning Private label Strategy;

1.     Brand Strategy

Define your brand purpose – Don’t develop a private label until you have established a distinctive customer need and worked out how your private label will meet it. The resulting ‘customer value proposition’(CVP), must capture;

–       who is the target audience? Understand their motivations. 

–       Why they should buy your label? 

–       How will you make the proposition ‘distinct’ from others (e.g. price, value, quality, sustainability, premiumisation, innovation etc). 

–       What, when and where will you serve them? 

Once tested with customers, the CVP must be used as the operating framework inside the business to manage, review and control.

2.     Assortment Planning

You are searching for missed customer opportunities to fulfil. Resist assortment ‘flooding’ and price ‘bottoming’. Instead, start with an assortment plan of your existing products and employ tags (or attributes) that you will use to identify gaps in price, quality and innovation. Flag poorly performing secondary and tertiary brands to replace with a private label, then re-define the assortment architecture. 

Your private label product must not simply rely on price to sell, it is an opportunity to differentiate through design features and benefits. The ‘3D’ product purpose framework (Defend, Delight, Disrupt) will help to guide merchandise teams to curate balanced assortments.

3.      Product Development and Sourcing

Whilst guided by opportunities identified in the assortment plan, product development will differ with category dynamics, customer and market maturity. Category management means skilfully interpreting the brand strategy and developing products and sources from cradle to grave. Options for product development should include:

–      Developing a ‘me too’ brand copy to improve gross margin or enable a disruptive price that generates greater demand.

–      An innovator that offers features and benefits that are unique to your label that ‘delights’ the customer by filling missed needs and aspirations. 

Replacing your reliance on national brands for profit with private label expands the sourcing funnel and creates opportunities to differentiate on price, value and innovation. 

4.     Organisation and Operating model

The operating model calls for new competencies in; brand management, sourcing, product and packaging design, quality assurance, supply chain fulfilment and customer insight. 

Deciding whether to centralise development will depend upon the skills maturity of the existing team. If you are starting-up then centralisation will bring control and consistency over brand identity. As you develop maturity a decentralised structure will enable faster expansion across categories. 

5.     Customer Communication

Traditionally Private labels have relied upon price alone to sell. With maturity the retailer should also use private label to develop differentiated products that win by competing in different ways.  

The retailer needs to become the ‘storyteller’ for an authentic brand story- it could be about innovation, creativity, quality, value, or sustainability, but it must ‘bring own brand to life’ and the story must be told consistently across your;

–      Packaging: developing a brand language which articulates the CVP.

–      Social proofing: influencer endorsements, awards, reviews.

–      PR: identifying the customer’s destination for researching product purchase and meeting them there. 

–      Positioning: Web or in-store, you must control how your product ‘stands out’. Page or gondola prominence.

Conclusion

A surge in private label sales is good news for retailers. It’s an opportunity to differentiate the customer value proposition from all other competitors.

Delivered poorly it will risk your reputation and incur financial losses; done correctly it will build customer loyalty, brand advocacy and improve your profits too.

Julian Grindey can be contacted at juliangrindey@aol.com or on 07969 397916

Sources

(*Statista, Jan 2021).

** McKinsey- Global private label report. Oct 2020.

True customer centricity must reach far beyond the roles of‘Chief Customer Officer’ and ‘Data Scientist’ to avoid organisations being ‘data rich’ but ‘insight poor’. 

Many who create these roles are often merely following a competitor who got there first; adding a‘customer at our heart’ slogan to the company mouse matt or corporate coffee mug, whilst failing their customer time and again. 

The best retailers see these roles as enablers to an intimate, more profitable relationship with their customers.  

__________________________________________________________________________

Julian Grindey is an energising and inspirational MD/COO/Trading Director, skilled in leading profitable change and transformation, inspiring strategic vision and commercial delivery and in driving retail and digital growth. Proven in delivering exceptional growth from turnarounds and scale up, in key omni-channel operators, including private label and international product sourcing strategies.

__________________________________________________________________________

The pandemic is gifting many retailers with new customers, filling their basket because their competitors have either been forced to close or haven’t evolved in a digital world, exposing their customers to short comings across the entire customer journey.  

Winning trust, by demonstrating alignment, brings long term commercial advantage. This crisis is favouring those who demonstrated the importance of their customer some months before covid-19; for the others their fortunes might be short-lived unless they act now. 

Delivered well, customer insight improves decision making and creates a defensible advantage, but it’s complex and must be driven right through the organisation to be embraced by everyone, not a specific individual or department. 

Successful organisations display three important traits:

1.     Customer Obsession:

Culture drives performance. It enables successful transformation but requires an enterprise-wide mindset, role-modelled by the most senior leadership and manifesting in a collective obsession to understand nuances in customer behaviour and satisfy them with a compelling proposition that wins loyalty over the long haul.

First, the business must have realised that commercial success is a bi-product of customer centric decisioning, with all departments aligned to this agenda.

Done well and the organisation will:

–      have an intimate understanding of their customers behaviour, both descriptive and prescriptive.

–      prioritise the customer’s needs before all other stakeholders.  

–      drive the creation of new products, with less waste and inefficiency.

–      eliminate pain points within the purchase journey that lead to promiscuity and attrition.

–      develop mature business strategies, built upon trust and be difficult to imitate.

–      recognised that customer retention is far more important than acquisition. 

2.     Owning the Customer Experience (CX):

In the last decade, it has been increasingly fashionable for retailers to appoint a Chief Customer Officer (CCO). Introduced with best intentions, but too often becoming powerless figureheads, creating a silo for CX in separate kingdoms isolated from the rest of business.

The CCO will make a lasting difference if they have the power, influence and resources to engage the entire workforce; creating collaborative company-wide decision matrices, aligning goals, dis-aggregating data, and co-ordinating customer performance standards. 

Jeff Bezos proclaimed the purpose of Amazon is to become the most customer-centric organisation on earth and; “every single employee must own the CX”. 

The CCO must not dilute the individual’s impact on CX; they must instead champion it in delivering the customer proposition.

3.    Insight Based Decisioning:

On-line trading, loyalty programmes and advanced CRM platforms gather customer data in volumes never known before. Converting this data into the meaningful insights, used to take ‘next best actions’, should be a collaboration between the scientist, the marketeers and the product teams.  

What’s required in the process:

Data Gathering– 

Start with a detailed understanding of what customer data you need to collect and what decisions you will take with it:

–       Getting the right data is much more important than gathering every last scrap. 

–       Think pareto; 80% of the best insights will come from 20% of your data points.

–       Prioritise the data before scaling up.

–       Define broader customer segment understanding before focusing on micro-segments or personalisation. (walk before you run).

–       Customer metrics. e.g. counts, measures, and ratios can give you enough to make meaningful decisions, remember to iterate your insights as you learn from them.

Forming Insight –  

This involves clustering data into themes. Traditionally segmenting was done by life-stage and wealth (social demographics), but as insight intelligence matures there are moves towards behavioural and attitudinal insight;  the basis for predictive analytics. There is a common purpose irrespective of the level of insight maturity reached;

–      identify customers’ value triggers and then score and rank them to facilitate effective targeting and personalisation.

–      start at a Macro (broad group segmentation) and master those before advancing to micro or personalised insights.

The Action Playbook 

Guided by your data purpose, build a library of offers, a few hundred is a good starting point to focus on the customer basics:

–       Acquisition.

–       Purchase conversion.

–       Retention-loyalty triggers. 

–       Spend development–cross selling and up selling.

Collaboration-

For many retailers, siloed processes and organisational models prevent effective collaboration and make it difficult to align the data science, marketing and merchandising teams. There is a strong case for a CCO to break down silo’s and align departments around the common cause.

Conclusion:

Digital customers are promiscuous when demand is driven by price and availability. Switching is simple and takes place with alarming regularity.

Customers yearn to be recognised by their retailer, but most retailers are only just starting to appreciate the power of insight. Full potential will only be realised when totally integrated into a customer centric culture within a perfectly aligned organisation.

Done well; the retailer earns loyalty, advocacy and optimises life-time value. 

Done badly; it becomes costly tokenism, exposes a lack of authenticity and destroys trust.

Julian Grindey can be contacted on 07969 397916 or at juliangrindey@aol.com

Cataclysmic events have accelerated digital growth; jumping from 18% to 28% of total retail sales*, and whilst the re-opening of non-essential retail will re-balance this mix, we will never return to pre-covid levels. 

Retail leaders are being forced to re-focus their digital strategy and re-visit investment plans.

__________________________________________________________________________

Julian Grindey is an energising and inspirational MD/COO/Trading Director, skilled in leading profitable change and transformation, inspiring strategic vision and commercial delivery and in driving retail and digital growth. Proven in delivering exceptional growth from turnarounds and scale up, in key omni-channel operators, including private label and international product sourcing strategies.

__________________________________________________________________________

Customers are visiting retail websites in record numbers to browse and buy, but shoppers still abandon baskets on average 1.27 times/week**, and they are promiscuous; 73% of customers declaring they are channel agnostic*** when searching for an item to purchase. 

The appeal of product and price will always be important, but the digital experience is crucial to generating traffic, improving conversion and nurturing loyalty. 

Increasing the digital customers’ propensity to buy depends on satisfying a sequence of needs, with five clear elements that can funnel customers from searching and browsing to becoming purchasers and loyal advocates. 

Understanding each element, and what to focus on is important;

1.     Functional:

We live in a Convenience culture- If it’s not easy to purchase then your customer simply won’t bother. Focus here on; 

  • Browsing- Navigation, ease, speed and clarity.
  • Buying- simplification. Safe storage of payment details yields repeat visits. 
  • Delivery- Integrity, expediency and choice.
  • Returns- Must be flexible and frictionless.

Customers are intolerant of ‘average’. It’s important to understand the impact of website Speed and ease; how flexible and convenient are your payment options and how rapid is delivery. Using pre-filled forms for payment and delivery and conducting regular UX tests for convenience in the design and continuous improvement will help. If a website is not functional then it’s essential to re-think and/or re-build. 

2.     Safety and Security:

The customer needs a secure checkout experience, and to feel confident with the brand they are buying from; their trust in the retailers’ reputation for value and service is essential. Communicate how you are handling their data and payment protection; use logo’s, icons and present your credentials clearly. Use product reviews; this type of social proofing is proven to increase conversion.

3.     Trust and Engagement:

Good customer service – making sure that help is on hand at every point of the digital journey, by removing the need to ask – leaves no room for doubt. 

Good communication methods including; website self-help, email, chat, phone support should be tested through regular ‘Voice of the customer’ feedback to determine whether expectations are being met. Acting promptly will avoid customer attrition. 

4.     Recognition and Status:

Everyone has a natural desire to feel needed, and customers are seduced by recognition. They reciprocate with visit frequency and spend. 

A data strategy starts to help categorise customers for segmented or personalised shopping experience, through instruments including; loyalty programmes, discounts, curated propositions, personalised offers, promotions, and community attachment.

5.     Sharing Enriched experiences:

If the retailer can master the previous four attributes then the customer is prepared to engage in new or enriched experiences. These are be the most valuable drivers of loyalty, and brand advocacy. 

Trust is high, and the retailer can focus on new ways to interact. Examples here could include; Using AR to overlay a product in an environment (Wayfair),enrolling in a conversational community (Game workshop), selling diverse products, and introducing them to affiliates or new services including Financial Services.

Conclusion

Investing in the array of features outlined above is costly. How you benefit will depend on how well you understand your customers purchasing psyche. Investment must be prioritised in the order presented here; focusing on recognition and status through personalised communication for example will be far less effective at delivering increases to customer spend if the website suffers from slow page load speed. The result is high levels of abandonment, and a wasted investment. 

Understanding and applying these principles goes a long way to guide investment priority from the outset, but they are not a panacea. 

Other  pre-requisites for success include the development of ‘intimate customer insight’ coupled with a ‘test and learn’ mindset, a comprehensive dashboard of data measurements at critical points of the customer journey, must be supplemented with ‘Voice of the customer’ feedback to develop a prioritised digital investment plan and an agile method for reviewing returns.

Getting this wrong could be fatal, costly and embarrassing to the brand. 

Julian Grindey can be contacted on 07969 397916 or juliangrindey@aol.com 

Sources/ References 

* Statista Jan 2021.

**survey of 2,000 UK shoppers, commissioned by Censuswide. The survey ran from 20th-25th March 2020

***Channel advisor survey Winter 2020.

Non digital retailers face catastrophic failure in the evolving competitive environment. 

E-commerce giants Amazon, Alibaba and ebay owe their meteoric growth to marketplace models, and in this new era retailers and brands are chasing with their own platforms, responding to their customers expectations on choice, value and service.

Digital marketplaces are accelerating faster than other areas of e-commerce*; leaving the traditional retail supply chain dead in their tracks!

Harnessed correctly, its agility can extend assortments, accelerate sales and improve profits at speed.

Managed badly and the retailer faces reputational and financial chaos. 

__________________________________________________________________________

Julian Grindey is an energising and inspirational MD/COO/Trading Director, skilled in leading profitable change and transformation, inspiring strategic vision and commercial delivery and in driving retail and digital growth. Proven in delivering exceptional growth from turnarounds and scale up, in key omni-channel operators, including private label and international product sourcing strategies.

__________________________________________________________________________

Marketplaces are evolving as retailers and hosts create new variants to suit their customer and commercial needs, but at its core are two basic forms; Digital Marketplace and Drop Ship. A common trait amongst all forms is for the retailer to manage the customer sale but not the stock fulfilment. Choosing the most appropriate model requires an understanding of each:

–       Digital Marketplace – Multiple competing vendors join the platform, set their product selling prices then they pick, pack and despatch their orders and receive the value of the selling price minus the hosts commission charge. 

–       Drop Ship– the host takes more control; curating a vendor list, setting the product selling price and negotiating the cost price. Once sold to the customer the item is still fulfilled by the vendor, after which time they are paid by the host. 

The benefits of both include;

–       An unrestricted product assortment – the assortment can be infinite and agile. In contrast to the limitations of space, location and speed to change of traditional retail. 

–       Rapidly Scale-able – adding products to the assortment only takes minutes. Leaving few other digital initiatives that can grow revenue streams as rapidly. 

–       Low financial capital requirements – traditional supply chain required massive investments in distribution centres and stores. These models require neither.

–       Reduced working capital pressure – for inventory, as stock is not owned by the retailer until after it is sold.

–       Removing overhead – by simplifying supply chain activities.

If you are looking to extend your retail supply chain then carefully consider:

1.     Your Customer and Commercial strategy:

Selecting a ‘best fit’ format requires an understanding of how customer expectation meets your commercial ambition, and platforms can be modified for acquisition or retention by serving; B2B, B2C, C2C and C2B. Options for use include:

–       host your own platform where your customer is seeking more choice.

–       sell your merchandise on a hosted platform where it reaches a new customer segment you want to serve. 

–       use a platform to source or sell your product to another business (B2B). Frequently used as a disposal outlet. 

–       allowing your customers to sell to each other on your platform (C2C) is increasingly used in the emerging circular-social commerce. (e.g. magpie, depop and Afound).   

2.     Protecting your brand:

Marketplace models change the way you deliver your  customer value proposition (CVP) and your supply chain to meet evolving customer expectation. You have to re-asses and adapt your supply chain, customer service and enterprise controls to cope with scale, speed and diversity. Start with a pilot to prove concept, control and capability and then scale quickly at a pace that won’t put customers trust at risk.

3.     Assortment Planning:

Marketplace models bring infinite possibilities, capped by the vendor base and the platform you choose. It is tempting to overload your platform with options to realise the commercial gains quickly. The smartest retailers resist this in the short term; guarding against reputational risk for quality, choice, value and service, and building considered Assortment plans that align with your brand identity. 

4.     Be collaborative:

Choose your ‘Platform partner’ carefully- A small number have now addressed the challenges of controlling the product, service and supply chain delivery, with elaborate performance dashboards that surface problems in real time. If you are starting out then buy, don’t build, you can learn so much more from the platform provider and risk far less.

Aligned Vendor Management is critical, but new scale possibilities can overwhelm the under prepared. Introduce ‘balanced scorecards’ and review in real time. Create a new structure to collaborate with your vendor and control how your CVP is delivered by them to your customer.  

Conclusion:

The Digital Marketplace is predicted to grow by 28.9% CAGR between 2019 to 2025 worth an additional $250b.** Adoption barriers are low, and opportunities are great for the retailer who understands their customer, the landscape and the risks. 

E-commerce is serving the customers appetite for choice, value and immediacy. Traditional retail supply chains have to change for a retailer to thrive. Mastering marketplace platforms is essential for retailers and brands to succeed in the e-commerce sprint race.

Julian Grindey can be contacted on 07969 397916 or at juliangrindey@aol.com

Sources:

*Matt Coode. International Head of Retail consultancy firm O, C&C.

**McKinsey research report; Digital marketplace growth 2020.

Based on Retail Executives Retail Breakfast Presentation January 21st 2020

Retail trading in each of the past five or six years has been more challenging. I see no evidence to suggest this year will not continue this trend, and next year. In almost 40 years this is by far the most difficult market I have seen. It is clear to me that most retail business models are not fit for purpose. The extent to which fine tuning is needed will vary, but the old model will no longer work in the way it did.

The key source of this growing pressure is the evolving change in the relationship between supply and demand. Over the past 15+ years, online has grown to now account for almost 30% of all non-food retail sales. Meanwhile, physical space has actually grown, slowing in recent years, but still expanded. Supply has therefore increased hugely. Demand over this period has failed to keep pace, especially in the post debt crisis period, and then dampened further by uncertainty around Brexit. Twenty years ago, UK retail was physically immature. Today we have chronic over supply and this is progressively hitting trading economics.

Against this background, we inevitably see growing distress. Many businesses unable to cope with the demands of an increasingly overcrowded market. But there are some retailers (a minority) who are trading strongly. There is much to learn from these winners. This is not about copying but identifying different approaches and applying aspects to one’s own business.

In this increasingly tightening market, over expansion becomes an increasing drag on performance. Over expansion has pervaded most retail businesses. Too many stores, many or most of which are much too big. Product offers have also become too big. Significant editing is required. But the key to all this is the customer. Too many retailers have been chasing a widening customer base and forgetting their core customers. In every business I know, there are some customers you don’t want. Some sales you should reject. Core customers should determine what you sell.

Today’s winners include businesses as varied as Aldi, Primark, Selfridges, Home Bargains, Costco and Reiss. Each has a clear target market and does not allow peripheral customers to dictate the offer. This focus allows them to deliver strong availability, fast stock turns and a consistent experience for customers – a virtuous circle. While people love to pigeonhole, this market is not about what you do but about how you do it. No sector or type of retailer is immune from trading pressures. Execution is everything. Sam Walton (founder of Wal-Mart) and Jeff Bezos (founder of Amazon) have both readily acknowledged studying competitors for inspiration. If it was good enough for them …

Richard Hyman, Board Advisor Retail Executives Limited and RAH Advisory Limited

We have all grown up in an era of upward-only economic growth. The rate has varied and we have had the odd short-lived recession. But in the consumer economy, growth has been almost guaranteed for generations. For most of this period consumers’ spending power outpaced capacity growth. Today, many of the fundamentals have reversed. This is the background to where we are today and helps to explain the widespread turmoil we are seeing. 

Whatever the increasingly unbelievable official data might say, we are in a retail recession. Strategies that have generated reliable growth in the past, are often now nooses gradually tightening around retail necks. Every retail sector is oversupplied, with too many stores, units are too big, and ranges far too wide and deep. All this was designed to attract a widening customer base. And for generations of growing demand, growth was relatively easy. Naturally, some businesses grew more than others but even quite mediocre retailers were able to report modestly positive numbers. 

This is all now in the past. Against the background of massive online growth, physical space has continued to expand. With deep uncertainty and Brexit looming, demand is increasingly softening. Market forces are exposing the fundamental weaknesses of many retail businesses. 

The industry has become increasingly corporate. Smaller, niche brands developed by entrepreneurs were grown to a size where they attracted attention and usually floated or sold, sometimes to trade buyers but more often to PE Houses. The overwhelming majority of teams at the top of our industry have skill sets that are more managerial and less entrepreneurial. And in a trading market where the depth and rate of change is accelerating all the time, this is a critical point. Successfully dealing with change on this scale is foreign to the vast majority of today’s leadership teams. And this in turn is why the overwhelming bulk of our industry narrative today is around cost cutting. 

The biggest issue for most retailers today is not around their costs being too high. It is that their propositions are not good enough. They lack focus and have lost sight of who their core customer is. The fact I mentioned before is killing them, slowly and painfully. Retail is a high fixed cost business. Cutting costs relatively fast almost always involved cutting people. My view is that most of the remedies currently being employed in “rescues” are very short term at best. Most actually diminish a retailer’s ability to generate sales growth. In today’s retail/accounting vocabulary, the word restructuring only applies to the cost line. CVAs never make the company a better retailer. Restructuring must apply to the top line to have a real chance of success. 

There are no silver bullets and in fact there is only one way a retail business can secure its future. Sell more product. And doing this in a sustainable way requires a clear, focused and relevant proposition. I think this is the essence of entrepreneurialism. Understanding your market, what it wants, and investing in delivering exactly that at a price that represents value and allows you to make a competitively defendable return. 

This requires true leadership. Very few retailers out there today are investing in their top lines. Stakeholders need to understand the new reality. Historic returns are exactly that – history! The quality of leadership is vastly more important than in the past. And leaders need to have the courage and vision to critique their offers and invest in making them better. Invest in customer service, don’t cut it. Focus much on your core customers and much less on the others. Be more entrepreneurial. 

Richard Hyman is a world-leading expert in the retail industry, having provided top-level analytics, insight and thought leadership on retail intelligence to hundreds of businesses over the past four decades. Richard Hyman gives strategic advice across all the elements of the Retail Executives business including, executive search, business advisory, board placement and training. 

Retail Executives Limited is a specialist Executive Search firm, providing senior executives to the Retail & Fashion sectors. 

Please do contact Richard Hollister, Managing Partner on: Richard@RetailExecutives.co.uk +44 (0)7970 010101 +44 (0)1494 590404 www.RetailExecutives.co.uk 

Small business lender, 365 Business Finance, has created a timeline detailing the appearance and disappearance of retail stores on the British High Street from 2008 to 2018.

The timeline serves to provide a visual depiction of a changing high street against the backdrop of recent media coverage of store closures.

The timeline lists 46 retailers; some old, some new – all at some point in time are or have been a household name. They have been grouped into five categories according to their concluding circumstance: ‘buy out’, ‘ceased trading’, ‘restructuring’, ‘clicks-to-bricks’ and ‘offline-online partnerships’. The list is by no means exhaustive, but through it we see how the landscape of the high street has changed over a 10-year period. As the timeline progresses we also see new retail players have made their mark on the high street with new business models and concepts.

Navigate through Recovery Road by scrolling or using the up and down arrow keys, to read each retailer’s story.

https://www.365businessfinance.co.uk/recovery-road/

STATS SHEET

  • [2008] 54 large or medium retail chains went into administration, with 5,793 stores, employing a total of 74,539 [source]
  • [2009] 37 large or medium businesses failed with 6,536 store and 26,688 staff [source]
  • [2010] Nationally, 13% of shops were vacant, up from 12% in 2009 [source]
  • [2011] UK retail chains closed stores in this year at a rate of about 20 a day [source]
  • [2012] Online sales made up 9.3% of all retail sales [source]
  • [2013] High street vacancy rates fell to 15.1% by the end of 2013 [source]
  • [2008-2013] 30 per cent increase in the number of charity shops on the high street
  • [2013] There was a net loss of 264 fashion stores from our high street [source]
  • [2014-2017] The number of fast-food outlets on UK streets rose by 4,000 between mostly in deprived areas [source]
  • [2014-2017] High street vacancy rate 11% (percentage of empty premises) [source]
  • [2017] The UK’s high streets suffered 5,855 store closures, at a rate of 16 stores a day [source]
  • [2018] Online sales accounted for 21.5 per cent of the country’s total retail sales [source]
  • [2018] 21,355 retail workers being laid off in the first six months of 2018 alone [source]
  • [2018] 44 companies failed affecting 2,594 store and 46,014 employees [source]
  • [2018] High street chains experienced their worst December on record as store sales dropped 1.9% year-on-year, the sixth successive December to record negative sales growth [source]

Online – Offline

  • UK click and collect market is forecast to increase by 55.6% over the next five years [source]
  • Clothing & footwear will drive the click and collect channel, accounting for 61.2% of spend by 2022 [source]
  • On experiential shopping: A survey found that 78% of Gen Y respondents would rather spend money on an experience than a thing, and 77% say their best memories come from experiences [source]
  • 84% of shoppers expect technology in the store to create a better shopping experience [source]

The Future

  • By 2030 e-commerce will account for around 40% of all UK retail sales [source]
  • Between 2020 and 2030 half of the UK’s existing shop premises will have disappeared  [source]

About 365

365 Business Finance offers a merchant cash advance product to small and medium-sized businesses across the UK. Our finance products are designed as a fast and flexible finance solution for businesses that accept credit / and or debit sales.

Website: 365businessfinance.co.uk

Facebook:365BusinessFinance

Twitter: @365BizFinance

Linkedin: 365 Business Finance

Everything in retail is turning upside down.

For generations, the key to growing a retail business was to open more and more stores.

Getting physically bigger was what it was all about.

The size of a retailer’s store estate was a proxy for its strength – several hundred stores or more always impressed, and ensured you were taken seriously.

Today, the opposite is true and what were once thought of as assets are increasingly liabilities.

Most retailers have far too many stores and exiting leases is so much harder then signing up.

Being publicly quoted was another indicator of strength and importance.

Having access to (relatively cheap) capital was often critical if you wanted to grow fast.

Acquisitions could be relatively cheap. I would say that today, being quoted is a growing disadvantage.

Being a hostage to quarterly trading updates to a market that expects you to always beat your past performance come what may.

Retail is a business that can never be judged quarterly because it cannot be led or managed against such a short timeframe.

or most of us, the retail industry we have grown up in has been characterised by relentless growth.

While the wider economy has seen ebbs and flows, and the odd recession, retail demand has known only growth … until now.

The predominantly used management tool has been the rear-view mirror,
assuming that the past will be repeated going forward.

It won’t, and not knowing what the future looks like is the major source of industry challenge we see right now.

Looking behind you makes it so much more difficult to see what lies ahead but many decisions are still being made this way.

Every aspect of today’s retail business requires review.

Most retailers don’t just have too many stores, they are mostly too big.

And they mostly carry far too many products aiming to please too many different customers.

Many have sacrificed some of their engagement with core customers in pursuit of peripheral ones.

In other words, chasing sales growth at almost any price.

The consequences of this are clear: poor availability, constant promotions and deteriorating trading performance.

Despite this backdrop, there are plenty of role models demonstrating how it
should and can be done.

And while simply copying will not work, aspects of success can be incorporated and fine-tuned for your own business.

Selfridges thrives while most department stores are struggling.

This is a company that executes innovation brilliantly. Not technical innovation but constant change in the offering and service, giving customers a compelling reason to visit regularly.

While as a rule it will become increasingly challenging to build a
retail business selling someone else’s products, Selfridges is brilliant at doing this very thing, truly curating an offer whose sum is greater than the parts.

A lesson to landlords, as well as to retailers.

Lush invests heavily in its staff, training them to deliver immersive, empathetic service to a very loyal customer base.

Aldi offers a finely edited range c5% the size of its typical superstore competitor, producing hugely superior trading economics.

More recently, it has invested in developing a more segmented
offering, gradually adding more upscale products. Customer profile today is classless, very far away from the cheap and rather one dimensional Aldi of 30 years ago.

Primark obviously leads on very low prices but has very cleverly added layers of increased fashion and complementary ranges to build around what remains its core basics offer.

Ted Baker is an excellent example of brilliant branding.

If you took the labels out and removed the store name, everyone would still
know exactly which store they were in.

Ted may have lost its founder but I’m sure that it will remain true its culture, brand values and distinctive handwriting.


This is by far the most challenging market we have ever seen.

The market is forcing an industry shake-out.

There are too many mouths to feed. But the death of stores/the high street etc has been hugely overdone.

We are seeing the beginning of an end game for mediocre retailers but for there will be more room for the truly outstanding players to make excellent returns.

Retail Executives, a specialist retail executive search and advisory firm, has appointed Richard Hyman as board advisor.

Richard Hyman is a world-leading expert in the retail industry, having provided top-level analytics, insight and thought leadership on retail intelligence to hundreds of businesses over the past four decades.

Hyman’s role will include offering strategic advice across the all elements of the Retail Executives business including, executive search, business advisory, board placement and training. The prolific retail analyst will work alongside the Retail Executives team to build strong C-suite relationships and facilitate its event programme.

Hyman said, “There has never been a more challenging time for the industry and the right leadership has never been so critical. I have known and worked with Richard and Darren for many years. I’m looking forward to helping them build Retail Executives as the pre-eminent source of retail talent and senior management support across retailing.”

Hyman has worked with the majority of the leading retailers in the UK, their product suppliers, landlords, bankers and institutional shareholders, over the past 30+ years. During this time, he has built up unrivalled insight into every sector of the retail industry, its leading companies and the management teams that lead them.

Richard Hollister, managing partner of Retail Executives Limited said: “Richard Hyman brings an unrivalled depth of knowledge and an abundance of relationships to our firm. His ability to give detailed insight into all things retail will also be of huge benefit to our firm and clients. I have known Richard for many years and we have collaborated often, so it’s a huge pleasure to be working with him again.”


Darren Topp, chairman of Retail Executives Limited said: “Richard Hyman is another key appointment and moves us closer towards our goal of building a world class recruitment and advisory business. Like many CEOs, I have used Richard’s insight into the world of retail to help build and articulate a successful strategic plan – he will be an invaluable member of the team.”

Hyman started his career as a researcher at the Financial Times in the 1970s. He went on to work first as an analyst then as a director of Mintel, the global market research and market insight provider. In September 1984, he left to launch his own business, Verdict, created to focus on delivering a new breed of insight and analysis of the retail sector. He sold Verdict to Datamonitor in 2005 and later went on to be strategic advisor to Deloitte.

Hyman most recently set up his consultancy business, Richardtalksretail, in 2015 providing access to this insight and opinion.

Retail Executives recently announced the launch of its retail advisory division, Retail Executives Advisory Network (REAN), headed by Sarah Curran-Usher MBE.

For information on the Retail Executives executive search business or its advisory network, please visit www.RetailExecutives.co.uk.

ENDS

For more information, please contact the Retail Executives’ press office on:

E: press@retailexecutives.co.uk

Notes to editors

Retail Executives, was formed in 2018 by Richard Hollister, a veteran of the recruitment industry, previously having worked at three of the top global executive search firms. Unlike other executive recruitment firms, the company is chaired by senior c-suite and non-executive directors of the fashion and retail industry, who bring a wealth of knowledge to the business and its clients. The company has already placed a number of senior retail and fashion executives on four continents the firm and, has rapid growth plans with its modern-day approach to fulfilling its client talent needs.

Retail Executives Limited a specialist retail executive search firm has appointed Matthew Parry as Partner.

Having started his career as a graduate in the UK retail sector, Matthew joined an international executive recruiter to help launch their retail business. He subsequently joined a prominent International search firm to head up its Consumer Practice in the Middle East. On his return to the UK, Matthew joined Dixons Retail and was responsible for the appointment of both Board and senior executives during one of the country’s leading retail turnarounds. He has since worked with prominent businesses in appointing their Boards and Senior Leadership teams.

Parry’s main focus with be expanding the retail executive search, covering all areas of retail, hospitality and leisure in the C-Suite and board recruitment.

Jean-Pierre ‘JP’ Gadsdon along with Jane Carver commence as Associate Directors. Gadsdon has a long and accomplished history within the Talent Acquisition domain, working with some of the UK’s leading Retailers and Hospitality brands, working for George at ASDA, moving on to FatFace, Carluccio’s and River Island.

Carver trained in Retail Buying with Arcadia Group and Etam, before transferring her skills to HQ talent acquisition. With 11 years agency recruitment under her belt, Jane moved in house to lead the talent teams of Calvin Klein, Jaeger and Clarks where she specialised in growing and developing their direct talent acquisition strategies, executive recruitment and partnering with the people teams to support their retention and succession planning both across the UK and Europe.

Richard Hollister Managing Partner of Retail Executives Limited said; “Matthew brings to the firm a wealth of invaluable experience of not just executing senior board levels roles but acquiring and retaining client and candidate relationships. Matthew has the same ethos as the rest of the team in making this the number one Retail Executive Search firm and being candidate focussed. Matthew will build up a team of highly skilled recruiters to grow the firm.


Darren Topp Chairman said; I would like to welcome Matt, Jane and JP to Retail Executives. Richard is building a world class team as we look to build the retail executives business with our clear candidate focussed strategy which delivers the very best talent to our clients.

Retail executives will be announcing other senior industry hires over the coming weeks. Parry, Carver and Gadsdon will start with immediate effect.

Retail executives recently announced the launch of their Retail Advisory division, ‘REAN’ Retail Executives Advisory Network. Headed by Sarah Curran-Usher MBE.

Other recent hires include, Sarah Gillett an experienced Human Resources Director within the retail and hospitality sectors, who has been appointed Non-Executive Director.

Retail Executives Limited was formed in 2018 by Richard Hollister a veteran of the recruitment industry, previously having worked at three of the top global executive search firms. Unlike other executive recruiters the firm employs senior fashion and retail executives.