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Retail has always been a highly dynamic industry, intensely competitive and fighting for a share of the wider consumer spending pot. This is an industry used to dealing with a constant diet of change. However, the change we are seeing today is far more profound than anything the past has thrown up. We are now seeing by far the most challenging period in retail history. A reshaping of the industry’s structure and economics is unfolding, and most of the real change is yet to happen.

Richardtalksretail is focused on analysing this change, anticipating the implications, and mapping how the key players across the various sectors are dealing with it. The regular Blogs in this public section of the site are a taster of the much more detailed analysis and forecasts in the premium section, reserved for subscribers.

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Monthly Archives: October 2018

Excellent Asos shows the way

It’s great to see some positive news from a retail business this morning. OK, so it’s Asos and some might say that online success is exactly the point – that traditional retail cannot hack it in the modern market. This misses the point.

In my opinion, the biggest problems faced by troubled retailers today are of their own making. They are the legacies of ill-conceived growth, achieved without understanding the consequences. Most of these ailing businesses have too many stores, over-sized stores, too many SKUs, too many customers…yes, there are some customers you don’t want because of the costs attached to serving them. This has led to the plethora of distressed retailers today who don’t know what and who they are, so neither do their customers.

Asos happens to be a digital retailer but on its own, tech is only ever a means to an end. It’s a conduit for the offer. And the Asos offer and how it is put together and managed is why today’s results are so strong. Asos is first and foremost an outstanding retailer – it happens to trade online. The business understands exactly what it is and refuses to dilute that by chasing incremental growth from beyond. It is focused at young fashion for twenty-somethings. It will neither stray far beyond that in other markets (so no homewares – a graveyard for so many fashion brands) or customers. While it does lots of business with older shoppers, it is not trying to chase them with dedicated older looks.

For as long as retail distress attracts focus on the symptoms and ignores the root causes, those companies are on borrowed time. If these businesses had no stores and the latest tech, their offers would still be irrelevant and competitively weak. A well-run, focused player like Asos can win huge chunks of market share, and there’s plenty more to come.

** We support retailers and stakeholders with strategic advice. If you think we can help, drop me a line richard@richardtalksretail.co.uk

Selfridges – long live the department store

In this world of never-ending retail negativity it’s a real pleasure to see a set of results from a retailer that is not just surviving, but thriving. Is Selfridges the best department store in the world? I certainly don’t know of one that even comes very close. The more important point is that there are a number of important lessons here.

The first is about generic judgements. We all know about HoF, and Debenhams is very close to the edge. John Lewis has reported massively diminished profits. Each of these businesses is different and sector-wide judgements are very likely to lead to poor decisions. It’s not what you do (ie being a department store) but it’s how you do it. What we are seeing is the death of mediocre retailing.

Why is Selfridges so successful? Every winning retailer has one core thing in common – customer focus. Many say they are customer centric, but very few actually are. That’s why they are on sale most of the time. Why they are cutting jobs and it’s why their revenues are static and their profits are falling. Selfridges has a programme of constant refreshment – every couple of weeks there is a new department, a new event, a new brand or two, a new service or two. This dynamism helps to make Selfridges special – there is a vast chasm between talking about experiential shopping and actually delivering it. This is retail innovation – constant newness. And the excitement crossing the threshold is palpable.

The retail lessons of Selfridges are about great retailing through true customer focus, and constant change and improvement.  There are also lessons for landlords. Selfridges is a very carefully assembled collection of brands where the sum of the parts is greater than its separate values. This is what truly pro-active management looks like. In the future, landlords need to think and act much more like retailers.

Selfridges thrives because it hits the spot with its target market. No one can match what it delivers. And neither can any offer online. This is about differentiation. The gaps between the retail winners and also rans are widening. It’s all about execution – the way you do it, and Selfridges continues to do it brilliantly.

** We support retailers and stakeholders with strategic advice. If you think we can help, drop me a line richard@richardtalksretail.co.uk

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