The Trouble With Retail

Firstly, is there any trouble, well that depends on the type of product you sell and the channels which you sell it on. It would be unfair to say that for every CFO walking a tightrope of financial jeopardy there is another ordering the new office chairs. However some have thrived, and others have not.

Shades of being online

The explosion into more digital working, shopping and meeting has meant that we have now accelerated the growth of all online retail channels significantly. Not just pure online, but also the connectivity between online and the physical stores. There is a much less talked about factor that sees the physical stores build a presence online through social media. This extends the offer and offers another channel of selection. Sometimes in fashion retailer this has been to extend to a transactional site. Few, if any, are not online, even the much talked about Primark are online, they just do not transact online. The fact that they have 8.8M followers of their Instagram accounts suggests they are online savvy. They have just chosen a profitable route to being online, one that eschews delivery and messy returns processes and concentrates on driving traffic to its stores.

Retail Sectors

Some of the large Grocers have spent a lot of money on keeping Covid at bay and invested in a home shopping growth that has seen the largest expansion since inception to an area where frankly they do not make money. The benefit of having numerous product groups selling, when prime retailers of these goods ( fashion, electronics, housewares, dinning and drinking ) have not been able to open, has been lost. Disposable income now blooming will unfortunately wither on the vine and living standards are expected to grow by only 0.3% over the course of this parliament, this is very very low. Even those retailers benefiting from the boom time house renovation rise will see a slowdown, as Covid diminishes and its macro financial impact is more apparent. 

Time to look in the Mirror

So is it all doom and gloom? No not on your Nelly ! There are some key things retailers need to do to make the most of a transforming retail landscape. In one word it is called SEAMLESSNESS. Here are our bullet points for continued success.

  1. Embrace cognitive diversity. Stop listening to the same people, look around your decision team and ensure they represent your customers !
  2. Think like a customer and be in every channel they are (even if it is not transactional).If you did not do #1 then this is difficult.
  3.  Eradicate Silo thinking, you may have talked about this a lot, many have, few have really done it. If you have not embraced #1 then you will not be doing this.
  4. Have a single source of truth for all data and reporting to re-enforce one team approach.
  5. Audit yourself and your team on your strategic goals, milestones and tactics, ensure you have complete objectivity in this.

When all these are done you can then look in the mirror and say you did all you could to take hold of the opportunity that so many of your competitors who no longer exist did not. Time to celebrate each milestone.    

Digital Future Interview with Emma Reed

Personal Growth, start as you mean to go on.

Retailers should look to a much more optimistic future, saying goodbye to a year of tactical shifts and landscape challenges, the wiser ones will take some time to look not only at their own business, but their own personal growth. Often these follow appraisal reviews with a need to “show willing” to develop skill sets required by the business.

Very rarely delivered alone, they need good line management and/or mentoring. Without this it is starts to gain that late January Gym membership feeling; great intentions, super start, tailing off to poor attendance, excuses, and the inevitable guilt. This annual trip of shame happens more in retail than other businesses. Many other businesses have not the huge customer interaction in which to hang some blame or excuses on.  If the first issue is lack of follow through, the second is the complexity of the challenges set. I recall reviewing a PDP from a marketing director last year and this well meant and earnest individual had a task pad on her PDP as big as her job, daunting was not the word for it.

Keep it simple, but relevant.

There are many great models available to decide where your time is best spent on yourself, and we use them frequently to help people make choices on the paths to take. Once this is done however (and let’s be frank it should be agreed, never imposed) then it is a matter of keeping it alive and become part of the fabric of your working life. This becomes the third challenge, keeping it relevant.

We have a Personal Development Plan Template on the website, you can download and follow which will assist in keeping things simple and having some agreed goals. It’s self explanatory but give us a call if you get stuck. I’d encourage you to look at your plan as a maximum of 5 things you will do to improve. This is how I do mine !

Ideal structure to your PDP :

  • One goal that is about a specific skill set that will help me do my job better, this is technical as that is not my forte.
  • Two goals that are about behaviour or relationships, frequently about understanding colleague or clients more and how best to assist. I am specific about who this pertains to and what I need to do to learn more.
  • One goal about improving something I or another had identified I am not very good at but should be. Often a painful one, this is given through feedback and has the least chance of being successful without help.
  • One goal about personal growth, irrespective of work or career. This is often the one ignored but also the most rewarding. It might be a language or sport or even a type of cuisine, by starting from a low knowledge base you appreciate growth so much deeper.

There are no hard and fast rules about forming a PDP, experience does help as does objectivity. Before you start constructing it have all the relevant facts to hand. This means talking to those who work with you, getting feedback (not just from those who say nice things) and reviewing your own personal goals.

In summary there are four steps to a great year of development:

  1. Decide on your career goals / ambitions and discuss with your mentor or line manager.
  2. Collect honest and robust feedback about your skills and behaviours.
  3. Construct a plan using the template that is alive and comes out every week rather than every year.
  4. Select a coach or mentor who can understand what you do and challenge you, the gym buddy you will never let down !

Post Covid Retail – Are you in a Covid Cave or a Covid Chrysalis ?

Are you in a Covid Cave or a Covid Chrysalis ?

We are aware that retail is going through some changes, for many this looks like a period of forced and occasionally voluntary hibernation. The decision people make going into that period of reduced activity is to decide how they emerge and what the expectations are for what they will look like when they do.

Our team discussions have highlighted a divergent opinion on what people will be doing during hibernation, with similar businesses doing widely different things to survive. One thing as a team we all agreed with was the need to have a plan on what the future business looks like.

Covid Cave (Bear)

There are some retailers who saw the business fall away from their stores, failed to fully connect to an online buying customer to replace enough sales and as the furlough scheme started to evaporate decided on packing it all in. We have seen these in the press and the resultant shock and depression on the faces of those staff and customers as the brands disappear. Sad yet many needed to work harder on future-proofing the business before lockdown, like a bear going into hibernation with too few calories and fatally not emerging.  The real question they need to ask is are they just going to come out of the Covid Cave as a slimmer version of the bear that went in ? Although many, if not the vast majority believe this is the right approach, we feel it is also a missed opportunity for most.

There is another group of retailers who are looking to deliver a step change in the way their business is conducted. In some ways this will manifest itself as a loss of physical space and store closures that have already started and will continue. In others it is the closure of the head offices and the robust tier removal of people structures. All sounds pretty dynamic and a year ago we would have said it is. Now it is less so, you still end up with a skinnier version of the same bear.    

In a few socially distanced coffees recently we have spoken to some Chairmen who are looking to see a step change. I understand the point one of them made with us quite strongly. “If you go through all the pain of the restructuring of your business, debt and people and make changes to the portfolio of stores, you want something at the end which is much more than an incremental change” I think we can say this is a vote against the skinny bear.

Chrysalis (Moth)  

Change will come as many of the competition will have vanished, sad as this is, the industry is going through a Christmas like no others in modern retail and as such those left will have to work hard to attract shoppers. Some, perhaps a brave few, will have taken a much different view and decided that they need to build on what they had with customers before and add something significant.

Much of this will be in B2B collaboration as new partnerships and both physical and online businesses share space to serve what they believe are cross-over customers. Think Lush getting together with River Island or similar as a fantasy example, or Curry’s suggesting to Tesco that they take over their technology departments.

Other change will be about customer acquisition and ownership ( yes I did say ownership) as brands define their customer experience to be complete from the very start of the potential digital journey to the end of the physical transaction and beyond in customer advocacy. Many suggest they do this now, yet in truth we are still seeking examples here.

If your business is going through some navel gazing at present, have a think about whether you will be just a skinnier bear at the end or emerge as a transformed moth. As much as I have always enjoyed caves, and not been too keen on moths, I know which one I would be choosing now.   

Buying Decisions in the Post Covid Landscape

Buying product to sell in a retail environment, whether it be for stores, ecommerce or international multi-channel business, requires a fine tuning of many variables:  What to buy? How much to pay for it? How much to sell it for?  Where to buy it from?  How many units to buy?  Is it on trend?  Is it right for the customer?

Throw in a particularly unstable retail market and this makes each and every one of those decisions even harder to make.

The tendency is to play it safe, to retreat to a place of relative comfort, to hunker down and hope that the cash flow will weather the storm.  At Retail Remedy we believe there is a balance to be struck here. 

Low risk = high risk

Fantastic core product, bought with the key customer in mind, is a retail must-have and is the corner stone of most businesses.  There is not a lot new about this statement, but is your core product the best it can possibly be?  Has it been truly considered with your actual customer in mind?  Is there still an element of real newness within your core offer?  (and that doesn’t just mean a new, seasonal colourway).

This is where creativity becomes your most important resource.  Considered design and creative marketing are your least expendable assets when retail is uncertain.  It is more important than ever to have a unique selling point and to stand out from the crowd.  It is riskier to make too many “safe” choices at the expense of new and unique products, that are not interchangeable with another brands’.  And perhaps it is actually less of a risk, dare we say it, to push the creative boundaries and make a few mistakes?  Buying by committee, or subjecting product to the scrutiny of a hierarchy of sign-off processes often leads to the dumbing-down of a product range.

Under these circumstances the need for agility in retail is even greater.  Taking calculated risks with new and unique product is rendered less of a concern if the business is able to react to trade decisively, quickly and effectively.  Simplification is the key to achieving increased agility:  Simplification of company structure, clarity of offer to the customer and alignment of brand in each and every channel will deliver financial rewards.

The pace of change in retail is exponential and “tried and tested” strategies are usually out of date.  We aren’t just referring to fast fashion here. 

Standing still is moving backwards

This frequently uttered mantra has never been so relevant as it is to current trading.  If you would like help to future-proof your retail business, to simplify it whilst amplifying your uniqueness and increasing your agility, give us a call.

Post Covid Retail – preparing for a Covid Winter

Post Covid Retail – preparing for a Covid Winter

The news has rarely been a source of comfort for retail in recent years and is unlikely to be optimistic in the coming months either. As the UK moved out of lock down and retailers began to see customers return to the ‘local’ high st.  The government’s latest announcements of tighter restrictions will undoubtedly have sent a second wave of trepidation through the majority of retail boardrooms.

Many retailers now fear that the financial strain and customer appetite for physical shopping and the need for online purchases are such that they are questioning their brand viability. These are very troubling times and over a series of interviews from the last few weeks we know that preparation for what happens next is vital.

As a business we spend our lives working with retailers simplifying operating models and ensuring they are setup to operate as lean as possible, and whilst we recognise that long term business survival is never delivered through cost cutting exercises operating a leaner more flexible operating model  allows the business to adapt much quicker.

We came up with some actions that retailers need to take now to ensure that they survive and even thrive. Keeping things as simple as possible this is our top line action plan for preparing for a hard winter.

  • Heads up Objectivity.
    • Refresh where you think the business could or should be in 6 months and start an independent review of what that means in terms of structure, people, cash flow, customer engagement, team engagement, property and systems. Be bold and make sure that there are no vested interests with those engaged to complete the review. Having done this recently we know it is not always best as a HR led project.
    • This is sensitive stuff, if this is a trusted internal colleague, they must be given access all areas, ask any questions access. This includes challenging the senior team. This person(s) must also be fully briefed on where the board thinks the business should be in the 6 months.
    • Too many people take too long doing this, conclusions and evidenced recommendations need to be forthcoming within 3 weeks of start.
  • Business Simplification.
    • From step one you will have an idea of what parts of your business is aligned to the vision and what parts are still operating as they were previously. Identify the quick wins on immediate operations improvement and implement swiftly to gain maximum benefit. Some may be structural; others will be removing duplication. In post Covid times this may have already started by default.   
    • Have a clear plan, concisely communicated on what activity you need for the customer facing business based on your buy and hold people to account on its execution both at product level and in its execution. The part we have found many retailers value most yet achieve least; we tend to assist in implementing completely as role modelling this is a must.
    • Reduce complexity and needless bureaucracy by making critical paths understood and commonly adhered to. A worthwhile challenge for all as this discipline saves money and expedites retail delivery enormously.
  • Rigorous cost challenges
    • Broad challenges to every team member on how we save money every day, chart and make sure there is some competitive edge to it. The ex-Wal-Mart elements of our team are used to this being a way of life and have helped interpretations of it throughout the UK and Globally.
    • Review GNFR suppliers in each department and evaluate ROI in the short term. Explore payment holidays or a more permanent financial arrangement to meet current business costs. Negotiating is iterative not static. Our recent clients have left this too low down the seniority list and we believe it is worthy of a fresh look.
    • Always measure success, cost savings and certainly against any pledges given internally or externally. Savings need to be front-loaded and sustainable.

Nothing ground-breaking, just a little more urgent than ever before. If you have not commenced these actions, ask yourself if you feel fully prepared for the hard Winter ahead. It may be a tough one, yet we know there are ways through to a Spring where, unfortunately, some of the competition will no longer be there.

Post Covid Retail – Team Yes, No and Maybe ?

Post Covid Retail – Team Yes, No and Maybe ?

As part of the series of brief interviews to explore retail practices that are essential for growth in s post Covid landscape we spoke to Phil Dorrell on his long held views on cognitive diversity and why it is the choice of all brave and self-assured leaders.

So Phil first of all what is Cognitive Diversity, it sounds a bit complicated ?

It’s a very simple concept to understand as we are all sub-consciously aware of the people who have the same views and background as we do and those who are different. It’s no surprise that we tend to gravitate to those have similar views and values, it’s human nature. We do it even online in social media where we follow people we feel share the same opinions and ignore (or worse) those who think differently.  In business we do the same, and this is where the problems can occur. Listening to and understanding more diverse views is vital in modern culture and business. Many of society’s ills come back to a lack of listening and understanding.

So in practice what does that mean for business and especially retail ?

Well we have had a very challenging year and many people will have seen colleagues leave or be furloughed and others may have noticed a distillation in the leadership, they have circled the wagons and kept the favoured team in the camp.  As the CEO and HR make hard decisions it is a brave leader who retains the people on the board who have different views, who question the status quo, not out of spite but because their experience and references may be very far away from the leadership teams. Having had this conversation with many retail leaders I know when I ask them about their team the usual response is one of shared experience and togetherness. Very understandable, especially now, yet not likely to push back and offer contrary views. The current post Covid landscape has changed remarkably, and it is now that we need a very broad set of experience and views in navigating through it. Nobody has all the answers, some diverse teams may just have most of them.   

Are you suggesting that people need no men rather than yes men ?

If you boil it down to the core, then yes that is correct, although that is a simplification. I am saying that if CEO’s look around the board room to a team of nodding heads, on strategic decisions and how to execute them, you have to question where are the nay-sayers who would challenge and sharpen decision making. It is much easier to work with people who agree with you all the time, the most productive teams are those that allow real challenge at any level and from that gain from the melting pot of experiences and views.

This sounds a nice to have but how many people really do it ?

The picture I have as a feature of this article is of a small Ford pick up truck, many will recognise. Sam Walton actively encouraged people to swim against the stream, something that meant he had a broad set of views to develop his business. Yes he had really trusted family and team members, yet he was always willing to listen to views outside this small group and accept challenge within it. I know the current Wal-Mart team would like to think this still happens. I have seen this in retail boards from Africa to Australia and of course Europe too. The real added benefit in establishing a cognitive diverse team is that you will rely on fewer outside consultants offering unique perspective that sounds like either genius ideas or re-hashed from a textbook. When the leaders feel they have no say or contribution they often call in consultants to take an “objective” view. I am really proud we have insisted on complete objectivity when working with clients, always interesting, often fun, but inevitably everybody wins when contribution is broad and seasoned judgement applied.      

Post Covid Retail – Marketing costs, or does it ?

Making a fixed cost Impact

As part of a series of interview with the team we have been asking what lessons retail should have learnt or should be learning as we deal with the ongoing pandemic. This interview is with Retail Remedy Associate Jo Staton, a straight talking, cost saving legend.

So Jo, why bother with marketing in these Post Covid times ?

The Marketing Department within any retailer is often the highest cost P&L and the obvious target when the proverbial hits the fan.  It is easy to say cut the Marketing spend in the current climate but are your competitors doing the same?  How is your marketing going to stand up against them to get the customers in your stores rather than theirs?  For me, it is about making it work smarter not harder, if anything now is a time to increase the marketing spend and look to state the case for customers safely selecting you.

What would you be doing now from a cost perspective?

From an operational perspective you look at all of the costs, in these Post Covid times even more so, especially the ones that are supposedly “fixed”.  When I go into businesses to look at Marketing costs specifically, I often get told something similar to “we have to pay that”, Why? “because we always have”… isn’t an answer.  I would look at the following:

  • Identify the true fixed costs, not just what you have always paid and re-evaluate your Marketing spend including what is remaining for 2020 and for 2021 planning.
  • Ask your team to reduce the budget by 10%, 30%, 50% and detail what would be sacrificed accordingly. Doing it this way serves to establish the core of the function and highlights what might be optional.
  • Ensure your plan and therefore your budget are factoring in the latest customer insight, this is your best source of keeping ahead of the curve.
  • Recognise the agencies that have supported you and brought new, innovative ideas throughout this significantly difficult time. Have they been a true partner, or do they just want their invoice paid?
  • Ensure your contracts are fair to both parties but work for you, they can be altered and have detailed KPI’s on both sides.

So, is it just about cutting costs then?

Obviously, it is more often than not about costs, but it is also about ways of working and operational simplicity.  How do you get from A to B in the smartest, most cost efficient way possible.  Where are the baton passes between Marketing and the other areas of the business, is there any duplication? Have you looked for it?  Critical Path management is key but often forgotten as the day job just has to be done. You have to ask yourself if every department is thinking about the broader team and how they deal with these handovers in Post Covid times. Chart the critical path out, eradicate duplication and focus on efficiency.

Post Covid Retail – Customer first buying, nimble supply base

As part of a series of interviews, we have been asking ‘what lessons retail should have learnt or should be learning as we deal with the ongoing pandemic’. This interview is with Retail Remedy Consultant Emma Reed whose years in fashion buying for bricks and clicks has timely advice for those facing the current pandemic challenges.

So Emma, what is your biggest criticism of retail at the moment?

Any business that is not completely and utterly focused on their customer right now, will be feeling the pain.  Boards spend too much time worrying about their shareholders and manipulating their financial reporting to appease them.  They don’t spend enough time anticipating what their customer will want next, in terms of product and experience.  I would challenge leaders to get to know their actual customer, not the one they think they have, and to make it their absolute priority to focus their product, their marketing and their brand experience directly at their actual customer.  In doing so they will look after their shareholders.

How does a focus on the customer translate into business structure?

In answer to this I would like to add to points already made about the importance of simplification:  The more isolated, separate teams there are, the less understanding of the business as a whole, within the culture.  Eliminating “them and us” and facilitating “we” is essential.  It’s a small business approach that needs to be applied to larger businesses in order to truly focus on the customer.  Too many retail businesses are like huge oil tankers:  The course is set way in advance and deviating from this course is to admit a certain amount of failure.  They are too overly complex to change direction effectively.  They often have many disempowered employees, who do not feel responsible for their actions because decisions are made by committee.  Speed, autonomy, agility, flexibility and a one team approach have to be a priority to cope with the pace of change and the fluidity of job roles in retail.

What would you say is important for multi-channel retail?

A flexible structure facilitating the buying of stock for each and every channel is the way forward.  It’s amazing how many retailers run their website, stores and international business as completely separate entities.  I’d go as far as saying that they are competitive in some cases.  Stock shouldn’t be owned by one channel or another and should be directed to where it is most needed, according to demand.  The same messages should be reflected in stores and on the website.  The stores are the physical experience of the brand and the website is the virtual experience.  Both need stock.  Both have a role to play in the brand’s success and to neglect one channel at the expense of the other will lead to diminished sales overall in a multi-channel business.

How does the supply base have to change?

I have been a buyer and I understand that buying the vast majority of stock up front is neat and tidy and easier for stores to manage.  But it is so much more likely to lead to crippling stock levels and high mark-down, if sales do not go to plan.  I’m not advocating fast-fashion or ultra-fast-fashion models either!  A flexible supply base, willing to make smaller quantities, so that businesses can maximise trading opportunities, is more important than extra margin points.  I would be looking for suppliers, who work together with retailers, to switch production according to demand.  A supply base offering smaller minimum quantities, closer to home, which can operate at speed.  I would be looking closely at how the supermarkets work operationally to maximise sales without creating huge excesses of stock and to apply some of those ways of working to other retail categories.

What about the role of physical retail?

Great product is still the most important requirement for building customer loyalty and repeat sales, but experience is increasingly important, especially in physical stores.  The lesson learnt for me before lockdown and confirmed during lockdown is that the role of stores is changing and those lacking in customer experience will ultimately suffer.  Retailers need to be seriously asking themselves what they are offering their customer by way of a unique in-store experience.

Where would you focus attention?

Safe is inevitably boring and boring does not lead to great sales.  Give the creative teams freedom (and the budget) to inject personality and uniqueness into brands.  The race to have the right product, at the right price, at the right time, no longer cuts it.  Too much focus on the competition has led to a diminishing U.S.P.  The customer wants to understand what a brand stands for and why its product is right for them.  He/she wants to see this reflected in the product itself, not just in the marketing.  Average, diluted, without character, like everyone else’s won’t work, except in the very cheapest of cases.

Anything else to add?

Invite an alternative opinion.  Don’t dismiss a challenge.  Explore all the alternatives up front and then make decisive moves.  Empower your employees and let them take full responsibility for the decisions they make.