Monthly Archives: March 2013

Lets Start With Why

If you’ve not come across Simon Sinek yet I urge you to rectify this without delay. Apart from being an inspirational speaker (see TED talks) he has written a book from which I’ve taken as the title for this blog: Start With Why.

Put simply the premise being that those who understand their Why cannot only be better leaders but better organisations; those are the ones who inspire us, who engage with us on an emotional level. They are the ones who interact with us in a completely different way, a way which motivates us to action, to want to connect – they make us feel differently.

“People don’t buy what you do, they buy why you do it” Simon Sinek

Think about that statement for a moment and then think about it in the context of retail:

“People don’t buy what you do, they buy why you do it”

Why do some retail brands command more customer loyalty than others? Price, product etc notwithstanding because these days it should be a given that these are in place and meet the expectations of the consumer. With competition for a seemingly ever decreasing share of our spending becoming more and more intense, how do some retailers manage to succeed where others do not?

I will leave you to discover more about Why in your own time but it is an intriguing thought when we look at the state of the High Street today. We probably all have our preferred or favoured brands with which we consent to do business with – to grant them our loyalty and custom. Apple computers is a good example; they make great computers right? Well, it just so happens that they make computers but for most of us when we think of Apple, computers in themselves don’t immediately spring to mind. We think of tactile, friendly, easy to use phones, tablets etc which have now become an intrinsic part of our lives. And it gets better.

Social media, convenient, personalisation, mobility, in-store experience – these are all key trends in retail which are evolving at an unbelievable speed. Never before has the rate of change we are now witnessing been so rapid. The third screen is now the new normal and this is having a profound and fundamental impact on not only how retailers must think and behave but more importantly on our own expectations of how we wish to engage and therefore be engaged with our preferred brands. It is completely turning on its head the traditional model of a parent child relationship which retailers have enjoyed with their customers for so many years.

Think of your most recent transaction; was it personalised? Was it convenient? Did it meet all your expectations for customer service? Was it a good experience? And most importantly would you wish to go back there whether it be online or in-store? Increasingly we are demanding more and more and this is challenging the traditional retail model. This is an incredibly stimulating and exciting time and best of breed retail has never been so good. From smart mirrors to augmented reality to smartphone apps which will let the consumer know which store staff are working at any particular time, the game is changing.

As retailers are liberated from the shackles of long term leases we will see more and more optimise their store estates to align them with their online business. Typically this will mean less stores but in more favoured locations and the slimmer store estate will need to be sleek and capable of delivering amazing customer experience. Some will be showrooms only and carry zero stock – literally shop fronts for the brand. Store staff will become ever more skilled and experienced so that more and more assisted sales drive conversion and net promoter scores.  

And through all of this the consumer will increasingly be expecting some sort of relationship with their brands. Something which is fulfilling, fun, exciting and inspiring. Those who know their Why will ultimately be best placed to succeed again and again and again. They will be the ones who believe in what they do, believe in the very essence of the brand, believe in the value they deliver to their customers. They will understand and believe in the very reason why they exist. 

Let’s start with why.

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Retail Week Live 2013

Retail Week Live 2013: The Future is Flip Flops!

 

Perhaps  I should first clear up the reference to flip flops; it came during a great session with Scott Weavers-Wright as he was describing his experience when visiting the Google offices recently. It was an entirely new and unique culture where flip flops are commonplace and as we all know it’s an amazing business.

 

But clearly Retail Week Live was much more than that, in fact it was 2 invaluable  days of hearing from great speakers giving their opinion, insights and revealing some of their plans at a time when the retail industry is experiencing seismic change. Also, not just the amount of change but the sheer pace of change is quite frankly mindboggling. And this is set to not only continue but accelerate. 10 years ago did we even think in our wildest dreams that something such as Google Glass would be around in our lifetimes? And yet it’s here now, not just in the lab but fully working and operational. The limits are more than ever only bound by our imagination and the way that technology is now enabling a completely new way of running our lives and crucially the way we wish to engage with retailers, is having a profound effect on how retail is being shaped.

 

No longer the parent child relationship between a retailer and their customers, now the relationship has shifted to an entirely different paradigm; one where consumers are able to make choices and engage with their preferred brands in ways which were unheard of only a few years ago.

 

So how has this shift occurred and what are the likely trends which are emerging which will go a long way to shaping our lives in the future? Retail Week Live didn’t disappoint.

 

From CEO’s and Directors of retailers such as Asda, Dixons, Argos, ASOS, QVC, Oasis, House of Fraser, M&S, John Lewis we heard how not only the High Street but the entire retail landscape is changing and in a way none of us could ever have imagined. And whilst some key themes emerged it is equally true to say that no-one really knows what the High Street will look like in 5 years time let alone 10.

 

Perhaps the single most significant development which is shaping all of this is something which now over 35% of us carry in our pockets and is predicted to grow to over 60% by 2016: the smartphone. In the UK alone at the end of 2012 there were 83 million mobile subscriptions of which 36 million were for smartphones. By the end of 2014 it is anticipated that the coverage of 4G will reach 98% of the UK population making wi-fi speeds the norm. At the end of 2012 nearly 40% of internet access by device type was via a smartphone (as opposed to desktop, laptop, tablet etc) So what does all this mean for both the retailer and the consumer? Some of the answers lie in the way in which retailers are going to have to engage with their customers.

 

First we coined the phrase multi-channel, then a few years ago we began referring to it as omni-channel and now hyper-channel but now more than ever we should simply think of it as one (multi various) engagement with the customer. John Lewis predict that their online business will be a £1bn business by 2015 and that 35% of those transactions will be click and collect. This trend is mirrored across all retailers and is a consequence of one of the key trends along with mobility: convenient.

 

Everything now has to be convenient; we need our interactions and our engagement with our favourite brands to be convenient (to us) and we need our purchasing cycle from click / visit to fit in with the way we prefer to lead our lives. This is a very significant challenge for many retailers and represents a huge shift in the way that they need to engage and communicate with their customers. Brand loyalty is ephemeral and to understand this and the way that customers behave is to unlock one of the secrets to retail success in this digitised age. And one of the characteristics of this is click and collect. This, coupled with mobility is having a huge influence; the only barrier now being the strength of the fulfilment proposition. It is this phenomena which, together with showrooming, is having one of the biggest impacts on the High Street.

 

Whereas before, the standard transaction would have either been conducted offline in store or online via such as Amazon where the product is searched online, found & ordered for delivery to home within a pre-determined timescale, consumers now are wanting much more from their experience. Which brings me to the 3rd pillar of trends from Retail Week Live: customer experience. This is perhaps the most influential trend which is appearing and challenging the traditional retail model.

 

As consumers we are all demanding far more whether it be online or in-store. We want our favoured brands – those who we decide deserve a share of our (hard earned) wallet to engage and communicate with us in ways which suit our lifestyles. No longer do we accept what is pushed to us, instead we control much of the buying behaviour and coupled with this we demand that our favoured brands interact and engage with us on our terms. We want personalisation, we want convenient but above all we want to feel that by endorsing a brand we have made the right decision and that peer recognition will therefore follow. And to the most interesting dimension in all of this: the store estate. How are retailers now considering their stores and what role do they see them having in the future? Well, rather than an inexorable decline as online becomes ever more ubiquitous, in many ways the reverse is true.

 

Consumers want a total, holistic, personalised experience and this is where the store and therefore the in-store experience determines levels of customer loyalty to that particular brand. The effects of this on the demands placed on store colleagues is only now just beginning to be felt. Research shows that a customer is 10 times more likely to purchase from a store colleague they have come into contact with 3 times or more. Online browsing and research combined with subsequent great shop assisted sales appears to be the key to unlocking omni-channel retail success.

Save our High Street

I live on the edge of the Farthing Downs in Surrey; a beautiful chalk downland almost unchanged since man first inhabited it nearly 6,000 years ago. It attracts all sorts of people, dog walkers, runners, cyclists, walkers – people all enjoying the space together. It is a wonderful landscape for all the community to enjoy. It is maintained and nurtured by local volunteer and partnership groups and in recent years more areas have been opened up for the enjoyment of everyone. In fact, the Farthing Downs is in many ways no different to the same community’s Town Centre. And yet, I sense that the High Street is not viewed in necessarily the same way.
 
Much has been said and reported on regarding the relative merits or otherwise of the Portas Pilots; the 12 lucky towns which were each given £100,000 investment fund in May 2012 to help accelerate the regeneration of their High Street. Much has also been written about the majority of the money still sitting in local councils bank accounts and I find this difficult to comprehend.
 
One such is Croydon, not far from the Farthing Downs and I went along recently to see what a Portas Pilot looks like in the flesh. The historic Croydon Old Town which has Surrey Street and Exchange Square at its heart was the chosen area of Croydon which won the bid. The objective was to regenerate the area as a cultural centre. In reality it is a ghost town not one shop of any description has taken up residency, there is one solitary rather run down looking bar and apart from the usual rather unsavoury characters loitering there in the evening there is nothing. Even the “Marketing Suite” is boarded up. Whether it was right to use a TV celebrity (I use the words advisedly) to front this or to have proper experienced retailers involved is open to debate but one thing is certain, the scheme has failed spectacularly. As of 31st December just £4,500 had been spent of the £100,000 allocated to Croydon. And this is reflected in the majority of the other towns chosen.
 
What has gone wrong? Are local councils so apathetic and bound in red tape and bureaucracy that they are simply unable or unwilling to take action? As part of the scheme expert “mentors” were appointed to assist and advise on how best to go about spending the cash; most are still waiting for the call.
 
This is a lamentable situation and I find myself wondering why do local communities seemingly accept it? After all the High Street istheir High Street just like Farthing Downs is theirs to use and enjoy. Maybe this is at the heart of the problem. Too many people seem to think that the High Street is for the retailers to sort out by making sure it’s always full of shops and therefore is somehow discreet from their opinions and concern. This malaise coupled with crippling business rates and rent is creating High Streets which are no longer primary or even secondary sites for many retailers. As online shopping continues to grow retailers are more than ever trying to optimise ie. reduce the number of stores they have and are also increasingly wanting prime sites which usually means shopping malls and out of town retail parks. And what perhaps is key to all this is that the pace of change now is both faster than ever before and is relentless.
 
Perhaps it is time to enlist the help of some different people in order to restore that sense of ownership and, dare I say it, pride in the High Street. After all, the Farthing Downs is looking in pretty good shape.