Westgate Oxford – First Impressions of a New Shopping Wonderland

 

 

Queenstreetview_01

The extension to the Westgate centre in Oxford has been a long time coming.  I traded in the city centre from 1994 onwards and even then I remember it was a hot topic of discussion in the retail ranks.

There have been several false starts since then.  In 2002 plans to extend the centre were blocked by the then secretary of state for being out of keeping with the city centre architecture.  A view I had some sympathy with considering the heritage of Oxford.

Then in 2008 plans to revamp the Westgate were once again shelved due to the financial crisis, even though a major remodelling of Bonn Square just outside the centre had already been completed, including the unpopular removal of several ancient and well loved trees.

For a while it seems like the whole idea had gone away, and by the end of the last decade it was apparent to most Oxford traders that the time for such a development had come and gone.  The advent of the internet, softening consumer confidence, falling footfall in town centres and of course an impending Brexit all appeared to render moot the idea of expanding the retail offer in Oxford.

Parking

There were (and still are) many other infrastructure issues that drag down trade in Oxford, not least the ridiculously high parking charges, poor travel access into the city centre and a culture of almost perpetual roadworks in the area courtesy of the county council.  None of these issues have really been addressed, with the exception of the parking charges which ironically were reduced by the council in order to fall in line with the more reasonable charges being levied in the new centre car park.

After years of ignored complaints to the council from existing retailers about the damage being done to trade and the image of the city by fleecing car driving consumers, they were finally handed a fait accompli by the developers.  Too late for many long gone businesses (my own included) and also a direct contradiction to the council’s stated aims to improve the appalling air quality in the city with an emissions free zone.  Another example of civic schizophrenia from a council who can’t decide if they love or hate local businesses.

In the meantime, the Westgate fell under something of a planning blight of its own making, as units fell empty while plans bubbled under for the site to be demolished at some point in the near or distant future.

Late

In 2014 the project was given the kiss of life once again when an alliance between the Crown Estates and Land Securities committed to transforming the old centre into the kind of retail experience that had come to be expected in major cities such as Manchester, Leeds and Birmingham.  But like the rabbit in Alice in Wonderland – a story born in Oxford and the main theme of the Westgate opening events – many thought it had all come a little too late.  Still, down the rabbit hole we went.


the so-called ‘lantern’ at the top is a positive bolt-on, looking like it’s made up from discarded double glazing panels lit by a 40 watt bulb


This was intended to be an extension, but it pretty soon became clear that little of the original building would remain or at least be visible.  A new John Lewis store would anchor the project and the main multi-storey car park would be demolished to make way and new subterranean parking structure constructed.

So began 2 years of building works, which admittedly caused less disruption than I expected, apart from the long and convoluted walk from the temporary car park into what remained of the city centre.

The new Westgate finally flung open its metaphorical doors (it’s entirely open at both ends) to the public on Tuesday 24th October.  I took a look around that afternoon after some of the initial hoopla had died down.

The main entrance from the latterly refurbished Bonn Square was impressive from a distance.  Walking up Queen Street the façade dominates the skyline, but seems a bit of a mish-mash architecturally.  If the hole in the front facia was a design afterthought, the so-called ‘lantern’ at the top is a positive bolt-on, looking like it’s made up from discarded double glazing panels lit by a 40 watt bulb.  Perhaps the obligatory blue LED lighting will come later.

An Accident Waiting to Happen

The area immediately outside the entrance is a clearly unfinished mess of tarmac and paving slabs which I was surprised to find led seamlessly from the concourse across the road to the square.  I say ‘road’ because that’s exactly what it is.  A still functioning thoroughfare allowing buses to pass pick their way through the crowds thronging outside the centre.

20171024_184207There’s no warning that the buses are coming save for the poor bus drivers franticly beeping his horn as surprised shoppers hop out of the way.  The seamless nature of the paving gives no clue or cue to the visitor that this is still a functioning road.  Even I forgot and realised I’d just walked straight out into the path of a bus, and I’ve been in that area hundreds of times.

It’s an accident waiting to happen, and unless something is done soon, we won’t have to wait long.  Already there’s much talk in the local press about it, with general impression being given that it was deliberately left in this state so that the local council could prove a point to Chris Grayling who refused permission to fully pedestrianise the area.  Let’s hope that point isn’t made by the serious injury or death of an unwitting visitor!

I also seriously doubt that what is essentially a pavement is going to be able to withstand several tons of bus driving over it numerous times a day.  It won’t be long before the cracks start to appear and this whole daft scenario unravels.  Let’s hope some remedial safety measures are taken soon.  Paving slabs can be replaced, people can’t.

Next I turned into the centre proper and was struck by just how narrow the entrance is.  This is a hangover from the original dimensions of the old centre, but with the full height shop fronts it now seems claustrophobic.  This may change when more of the shop fronts are open.  As it is now well over half of them are still boarded up.

Half Open

This is a theme that repeats as you travel around the centre, as only 60 or so of the 125 units are currently open for business.  The rest are either empty or being fitted out.  We don’t know the exact numbers as yet, although I heard on the grapevine that at least 20% of the centre remains un-let.  Presumably many brands are waiting to see how the land lies before committing themselves.  We’re promised that another 30 stores will be open by Christmas, but that still leaves 35 or so dark.

 

 

 

The centre manager and the developers have tried to put a brave spin on this, claiming that it’s not unusual to have so many voids by the opening day.  To anyone with even a rudimentary knowledge of previous centre openings this is plainly whistling in the dark.  I’ve never heard of a centre with so many empty or hoarded stores on launch day.  It remains to be seen how long that situation lasts.


There’s none of your polished granite here, it’s all slabs and drainage panels, much of which looks like it’s already seen it’s fair share of inclement weather


As you leave the long entrance corridor, past an alcove that appears to be the only customer seating area in the whole place, you pop out into the main area.  This is a cavernous hall with the obligatory glass roof, so beloved of mall designers for the past decade, none the less impressive all the same.

The area feels quite cold and soulless though.  Not helped by the grey utilitarian concrete nature of the floor finishes.  There’s none of your polished granite here, it’s all slabs and drainage panels, much of which looks like it’s already seen it’s fair share of inclement weather probably before the roof was fully installed.  Given that the end of this aircraft hangar-like space is fully open at one end, leaving a gap between the main concourse and the entrance to John Lewis, you can perhaps see why the floor looks just like any other pavement.  There are going to be a lot of wet shoes and maybe even snow flurries in here at some point.  I’m not an architect, but I suspect there’s going to be something of the wind-tunnel about this place come the next bout of inclement weather.

Strange Land

Overall it seemed quite drab, not helped by the large empty spaces visible in the basement area below, and of course more dead-eyed shop hoardings.  Yes they were all tastefully decorated with the ever present and somewhat cheesy Alice in Wonderland theme, but they were still empty spaces.  And just in case you weren’t aware that Alice was born in Oxford and the writer of her fantastical adventures was on Oxford Don, the PR company responsible for the launch didn’t lose any opportunity to remind you.  It certainly felt like I was disappearing into a strange land after consuming some kind of hallucinogenic potion.  A shame that there appeared nowhere for visitors to sit down in the mall, not even a giant mushroom.


The phrase “It’ll be nice when it’s finished” just kept knocking on the door of my brain begging to come in.


It was quite difficult to see where the old centre ended and the new one began, but perhaps that was an achievement.  The only cue was the entrance to the original Sainsbury’s store which didn’t look like it had moved from it’s previous location.  It was somewhat tucked away down a side alley, rather like the poor relation that no one wants to talk to at the posh party.

But to be fair, the main shopping area was reasonably impressive.  Nothing particularly new now, but it fulfilled its function well enough.  The usual suspect brands are all there, many of which have decamped from other places in Oxford, leaving behind them empty units like rotten teeth littering the now less well travelled thoroughfares.  But there was really nothing to see that I hadn’t seen dozens of times before.  Perhaps it’ll be more impressive when it’s finished, whenever that is.

Incomplete

And that really seems to be an indefinable point.  The centre is clearly not complete yet, and comments I’ve heard on the grapevine from contractors suggest that work may continue for anything up to 2 months. That takes us dangerously close to Christmas.

 

 

 

This lack of completion was evident throughout the development, with uneven floor surfaces, missing or filthy glazing panels, faulty lifts and escalators and empty planters with pot plants sitting forlornly inside waiting for their forever homes.  The phrase “It’ll be nice when it’s finished” just kept knocking on the door of my brain begging to come in.


Whomever the contractors were need a series kick up the backside


I’ve seen a few new centre openings, and opened my own stores in two of them, namely Bluewater in Kent and The New Bullring in Birmingham.  Both of these centres were to all intents and purposes complete on opening day.  My own store in Birmingham wasn’t and I can still hear the sound of the delivery manager screaming down the phone at me at 2am the morning before launch day asking me why.  It wasn’t actually our fault on that occasion, it was our lousy (yet very expensive) contractors, but I still bore the brunt of the ire.

I suspect something similar in the case of the Westgate.  Whomever the contractors were need a series kick up the backside, and I imagine are already deep into penalty clause money.  If not that might in itself be an answer as to why it’s not finished.  Again, I’ve heard rumours that the contractors tried to push back the opening day subject to the approval of the retailers, but they weren’t having any of it, and with rent free periods ticking and all the other considerations of opening a new store I don’t blame them.

I know that the whole centre was also developed by 3 separate architects.  I’m not sure if that also meant 3 sets of main contractors, but if so that also sounds like a recipe for disaster, the proof of which may well be the pudding that the Westgate is in the middle of right now.

Even relatively fundamental things for a modern shopping centre appeared to be missing.  In a city like Oxford, famed for its poor 4G coverage, Wi-Fi is a must.  Not only was this absent from the mall areas, there also appeared to be connectivity problems in the stores themselves.  Accessorize had no data connections at all and had to rely on paper vouchers to complete card transactions.  I’m not sure if this was a problem local to the store or another snag with the centre itself (the staff didn’t seem to know either), but in these days of contactless cards and pay by mobile, taking 10 minutes to complete a sale on paper just isn’t acceptable.

Of course these issues are transient and will eventually be fixed, but it doesn’t give a great first impression of the new centre, nor of the professionalism of those behind it , and as we all know, in retail first impressions tend to stick.

Some Positives

Enough of the negative stuff though, there are some positives!  The fairly run-of-the-mill lower floors belied the treasure that awaited on the rooftop terrace.  With stunning views of the iconic medieval architecture that makes up the Oxford skyline the best is left for last.

This is where the main eateries and restaurants are located and it’s going to be a summer treat to spend some time there.  Although I suspect it’ll be more challenging for the rest of the year.  Even though the temperature was fairly mild at ground level on opening day, it was still pretty chilly on the rather more breezy rooftop.


stunning views of the iconic medieval architecture that makes up the Oxford skyline


Even so, the views can presumably still be enjoyed from inside the restaurants.  I haven’t checked that out yet as very few of them were actually open (a theme I was becoming used to) and those that were had menus that made my eyes water if not my mouth.

The prices are pretty much as sky high as the location, but that will of course be understandable.  These units will not come cheap and as we all know the VOA won’t be far behind with their council tax assessment.  They’re going to have shift a lot of £20 minimum main courses to cover those overheads.

I joined many others, milling about the terraced areas, checking out the views, but as it was getting dark I headed back down, past the camera crews reporting for local news, the non-functional escalators and the closed cinema, yet another part of the Westgate promise still unfulfilled.

I had another engagement elsewhere so had no time to check out the delights of the John Lewis store.  I hate to say if you’ve seen one, you’ve seen ’em all, but it had that look about it.  Maybe next time.

Conclusions

Overall it’s very difficult to get a grip on what the new centre will eventually be like when it’s finished and more fully open.  The Westgate is neither an indoor, nor an outdoor mall and the stores and brands within are obviously setting out to raise the game in Oxford, even though I think that could have been done without the need to blow £440m on a development like this.  It all felt rather unaccomplished and unremarkable.  Maybe it’s the jaded eye of someone who sees behind the facades of these places, maybe it’s the memories of my own frantic forays into the mall culture, I’m not sure.  But I was left with a feeling of something unresolved and lacking that essential spark I saw in places like Bluewater so many years ago.  That may not be Westgate’s fault, even that Kentish behemoth has lost it’s shine now and I really think the age of the me-too shopping mall is coming to an end.  The Westgate and it’s ilk may just be a footnote in that journey.

Certainly it’s half open, half closed beginnings are rather apt considering it’s half in/half out positioning within the Oxford city shopping canon and only time will tell how it finally sits with local consumers and those coming from further afield.  I think the latter category may well struggle to get into the city if the predictions of a tripling of shopping visits to 15 or 16 million a year are to materialise. and I’ve written elsewhere about the likely traffic and parking chaos that’s probably going to ensue.

Yes the centre has made some effort to move people towards other modes of transport, but with the promised 1000 extra cycle racks not yet materialising and the kamikaze nature of the current bus route, it seems those elements are just as much lacking in full formation as the rest of the centre.

The excitement around the new mall also overshadows what I think will be some seriously negative impacts on the rest of the city, not least the number of empty units that are already starting to appear.  The shift in focus of the city towards the John Lewis area is also going to be to the disadvantage of existing department stores in the city, not least the likes of Debenhams and the long standing independent Boswells.  One rather surprising development is the appearance of the first charity store in Cornmarket street, one of the most highly sought after and prime locations in the city, or at least it was.

 

 

 


Only time will prove if some nice views and yet another cavernous retail cathedral will be enough to attract both shoppers and new brands to the city, and time is one thing that an historic site like Oxford has in abundance.


I think that ultimately when the novelty wears off, the overall experience will be pretty unremarkable, with the obvious exception of the roof terrace.  And that’s where I think the centre will win out, especially once the cinema and all the restaurants are open. That’s likely to be a real boost to the night-time economy as getting into town and parking will be much easier than during the busier times during the day.

Wait and See

Until the centre is fully complete and function it’s of course impossible to really know how well it’ll do.  I think the amount of competition in the area, both locally and a bit further afield in places such as Milton Keynes, Reading, the newly expanded Bicester Village and even Westfield London may well be a deciding factor if the predicted transport and parking problems in Oxford become reality.  Those really are the issues that should have been sorted a long time before the first brick was laid in the new Westgate, that would have helped not only the new centre but the city as a whole.

It remains to be seen if these problems will continue to dog the city’s retail and leisure offer, but it’s certain that the roof terrace area in the new centre will be a big draw for visitors and shoppers alike.  Ironically it’s the views that are the best bit of the new Westgate and arguably they’re nothing much to do with the centre itself.  In fact some would say that the inconsistent architecture of a shopping centre plonked in the middle of such splendour actually detracts from the skyline of the city of dreaming spires.  But then again those admiring the view from the Westgate itself won’t really care about that.

There’s no doubt that the new modern centre is a vast improvement on what it replaces, but it’s not enough just be new.  Every shopping mall was new once.  Only time will prove if some nice views and yet another cavernous retail cathedral will be enough to attract both shoppers and new brands to the city, and time is one thing that an historic site like Oxford has in abundance.

With the centre now finally up and running, albeit with a bit of a limp, retailers and managers will be working hard to make it a success and the city will have to come to terms with it’s newest addition.  As Alice herself says as she walks with the lobster through Wonderland, “It’s no use going back to yesterday, because I was a different person then”

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BHS – The ‘Dead Store Walking’ That Never Really Had a Chance

BHSI greeted the news of the sale of BHS to Retail Acquisitions with the same feeling of incredulity I’d previously experienced over Gordon Brother’s purchase of the ailing Blockbuster chain in 2013.

It seemed like a crazy buy, not least because if a canny businessman like Philip Green wants to shake hands on the sale of a major company for £1, you’d better count your fingers carefully afterwards.

The CVA details, released last month, revealed just how crazy it was. With a massive pension fund hole, debts of around £1.3bn and ongoing trading losses, it was going to take a miracle of biblical proportions to rescue the company for even the most experienced retail turnaround specialist. For someone like Dominic Chappell – a retail novice with several failed companies and a personal bankruptcy behind him – it was totally doolally.

The other thing that bothered me was the name of the company – Retail Acquisitions – which suggests that its primary aim was to acquire the stores, rather than to actually run them.

BHS was a dead store walking and I suspect Sir Green knew that when he sold it. Even the previously over-optimistic Gordon Brothers refused to sanction a £60m loan to Chappell for BHS, which if nothing else at least shows that they did their sums properly this time before leaping head first into another obviously doomed turnaround fiasco.

Dodging the Bullet

There are very few upsides to any of this, but I can’t help thinking how much worse things could have been had Philip Green also managed to buy M&S back in 2004. Already 4 years into his stewardship of BHS by then, one can only wonder if both these venerable old stores would have ended up in the mincer.

bulletM&S still has it’s problems, but it’s taken a far more robust route towards re-inventing itself than was ever evident at BHS. Updated, more up-market branding, a re-positioned clothing offer and a far more efficient front of house has kept Marks and Sparks out of the clutches of the receiver. Above all though it seems that dodging the bullet of being added to the Green portfolio was a far greater benefit to it’s survival.

The tired, confused and cluttered shop floor that greets you in BHS these days screams underinvestment and shredded staff morale. It’s been clear for years that Sir Phil had no idea what to do with BHS. In it’s final days under his stewardship, it was stuffed with poorly executed Arcadia brand concessions making it even less likely that shoppers would cross the threshold.

Essentially there was little inside that wasn’t already available elsewhere. This would also prove to be an Achilles heel for the new owners, leaving them very little room for manoeuvre in re-inventing the stock offer to attract new customers.

A late-to-the-party, rather shonky website did nothing to lift the image of a brand that was already years past it’s sell by date by the time it hit the net. The last gasp flirtation with a food offer shortly before selling the chain suggests the company had finally resorted to plagiarism of the more successful sectors of the M&S operation in a half-hearted attempt to turn the super-tanker before it hit the rocks.

Questions Need Answers

Given Sir Phil’s legendary retail acumen, it’s a conundrum as to why he wasn’t able to breathe new life into BHS rather than bail out. It’s almost like he wasn’t trying. Ultimately his priority was not to be on the apple cart when the wheels came off, which in business terms was a great move for him, but rather a bad one for his staff and creditors.

As shadow business secretary Angela Eagle has pointed out, there are still questions that need answers, especially if it’s it’s going to be left to the taxpayer to make up shortfalls in redundancies and pensions.

cash wheelbarrowI hope in the spirit of openness and transparency recently inspired by his friend David Cameron, Sir Phil will be just as forthright about his own personal financial arrangements. I’m sure speculation that, during the 15 years of his ownership, he trousered remuneration roughly equal to the hole in the pension fund is just a random quirk of inconsequential coincidence.

Likewise, there’s also some concern about pay-outs to Retail Acquisitions that may not have been entirely appropriate in the circumstances. It’s now expected that the company will be called before MPs to explain some of its actions in the run up to the collapse.

Even if there was a plan to relaunch the brand after the buy out, it’s become apparent over recent weeks that this was secondary to re-financing the company. Something that should have been in place long before the new owners picked up the keys.

Speculation

Speculation will now be rife about the future for BHS. A pre-pack resurrection deal seems unlikely considering the complexity of the situation and the continuing dead weight of the pension fund. That would also seem to preclude the option of a buyer being found for the company as a going concern. Even so, according to the administrators, there have been numerous expressions of ‘serious interest’ from prospective buyers. But I suspect it’s the nature of that interest that will be the rub.


I’m sure speculation that, during the 15 years of his ownership, he trousered remuneration roughly equal to the hole in the pension fund is just a random quirk of inconsequential coincidence.


If it does shutter it’s doors, it’s likely that BHS sized hole in our high street will be more difficult to fill now than it was after the demise of Woolworths in 2008. Not just as physical space, but in terms economic and societal impact of so many job and creditor losses. The announcement a few days ago of the collapse of Austin Reed will make that even more acute.

WooliesWhen Woolies went down there were plenty of takers from the bargain end of the retail spectrum eager to gain extra floor space. That sector is largely saturated now, although B&M Bargains are apparently eying some of the BHS portfolio.

Dominic Chappell himself is also reported to be keen to extend his BHS pipedream by buying back the majority of the company from the administrators using yet more borrowed money, this time from the USA. This smacks to me now more of obsession than sound business sense and I can see no reason why we wouldn’t just see a re-run of the last 14 months.

Let’s hope then that reports of viable rescue plans prove to be more than the wishful thinking of the administrators, and that if any part of the company can be saved, the future owners have pockets deep enough to allow them to concentrate on the business of retail rather than of finance.

Genuine Loyalty Can Only be Earned from Genuine Loyalty Schemes

cards-hero-loyaltyTesco having its knuckles rapped recently by the Advertising Standards Authority seems to me to be yet another symptom of a grocery price war strewn with landmines set for their hapless customers.

I’m a fairly avid watcher of supermarket deals, but even I hadn’t noticed the restrictive nature of Tesco’s Brand Guarantee offer.  So claims that they had set it up to be anything but a ploy to hoodwink their customers seem a little hollow to me now.

Even more so as I was about to pen an article proclaiming Tesco as having finally got this price matching thing right in the face of more disingenuous deals from stores like Sainsbury’s.

Next Time We’ll Be Generous!

Giving me a voucher at the checkout telling me that you were actually more expensive than your rivals this time and that NEXT TIME you’ll give me back the difference is a pretty measly offer in my humble opinion.  Even more so when the time limit to claim back the few miserable pence involved is so pitifully short.

And while we’re on the subject, just how many vouchers is it possible for one person to fit into a purse, pocket or wallet?  Judging by the number I get from Sainsbury’s, they’re running their own special study to find out.

inline-Lemon-Takes-Aim-At-Digitizing-Your-Traditional-Over-Stuffed-WalletConsidering we live in a digital age and most of these offers are connected to a databased driven loyalty or discount card, why are we still using annoying and wasteful slips of paper to administer such offers?

The answer, as I’m sure we all know, is redemption ratios.  These stores are assuming we’ll simply be chuffed with their generous offer of a freebie, even though in many cases we’ll not be able to take advantage of it, due to time limits, special conditions or a forgotten or lost magic ticket.

Fast and Loose

It’s been suggested that ASDA’s recent poor performance against it’s rivals was largely down to it’s stance on every day low prices, whilst eschewing a round of discounts and offers, especially in the run up to Christmas.  If that’s true then the value of special promotions is something that no retailer in a highly competitive market can afford to play fast and loose with.

But from my own experience, and from conversations I’ve had with store staff and other consumers, these rather iffy offers are starting to pall in attractiveness.  Coupled with the recent re-jigging of the Nectar scheme in Sainsburys, conditional discounts end up more sour than sweet.  They certainly don’t inspire loyalty.

from conversations I’ve had with store staff and other consumers, these rather iffy offers are starting to pall in attractiveness

Speaking personally, I passed the end of my tether long ago, the last time I had to stand in a checkout queue, leafing through multitudinous fiddly vouchers, checking that they were in date and that I’d bought exactly the qualifying size, variety, colour and amusing shape of kumquats to claim my 0.02p worth of points.

Get Serious

If the big supermarkets are really serious about taking on their snappy little discounting rivals, they are going to have to take a good hard look at how attractive, and above all, how genuine these offers are for their customers.

Bodies like the ASA and Which are feeding into an increasingly savvy and digitally connected consumerate who are not going to put up with the wool being pulled over their eyes forever.  Even if they are offered a discount on knitwear redeemable when there’s an X in the month.

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Could The ‘Living Wage’ Be The Living End For Some Small Retailers?

Payday written

The number of major retailers lining up to announce impending pay increases seems to be growing by the day, seemingly inspired by the Chancellor’s surprising commitment to what he called a National Living Wage.

Cynics amongst us may say that one motivation for this uncharacteristically altruistic move was to wrong foot opposition parties such as Labour and The Greens who’ve advocated the pay reforms proposed by the Living Wage Foundation.

That said, George’s Osborne’s aspirations fall somewhat short of the LWF’s, but on the face of it we at least have a welcome move in the right direction.

The new rates don’t come in until next year but there may be an ulterior motivation for some larger retailers upping the wages ante now, and in some cases going beyond new statutory requirements. Not only does it gain them several kudos points in the PR arena, it also piles pressure onto their competitors to follow suit. Happily for employees, wages may just have become a much more competitive battleground.

Tesco for example are currently facing a crescendo of calls for them to chase those foreign upstarts Lidl down the Living Wage trail at a time they can ill afford to add further financial pressures to their already creaking P&L sheets.

Balance Sheet Shuffling

For most larger retailers though, paying the higher rate shouldn’t really be a problem. They may have to do some balance sheet shuffling, but it should only make a small dent in their profitability. Certainly there may be a few long faces at the next shareholder meeting, but a couple of extra glasses of champagne will probably help them see the positive side.

WolfsonI have to admit to some bemusement at the recent whinnying from Lord Wolfson about Next’s wage bill increasing by £27m as they also announced profits of nearly £350m. For someone reportedly earning £4m a year himself, it seems rather churlish to begrudge his staff a mere 8% dividend on the profits they helped to generate.

Recent reports about retailers such as Sports Direct allegedly sidestepping even minimum wage regulations don’t do our industry any favours either.

For smaller businesses though the picture is somewhat different and there’s growing disquiet about how many employers are ready and able to deal with the additional demands that will be made on their businesses when the new system starts to be phased in.

For many independent retailers already struggling with overheads increasing every year, the Living Wage is going to be much harder to deal with, especially as we now see that the denouement of the Chancellor’s plot was to pave the way for a shredding of the tax credit system.

Even though that has for the time being proven to be a cut too far, I think it’s far too early to breathe a sigh of relief about future attacks on the low waged economy.

The reliance on tax credits by some businesses has been seen as perversion of the system, but in the face of scant support elsewhere, they  have tangentially helped small businesses by topping up the wages of their lower paid staff.


For many independent retailers already struggling with overheads increasing every year, the Living Wage is going to be much harder to deal with


Whilst I agree that for larger operators it’s difficult to defend such subsidisation, for some smaller companies it’s something of a lifeline.  That’s not ideal, and I know most small businesses would much rather pay a decent wage without pushing their valued workforce onto state assistance, but often there’s little choice.

I know of shop owners trading at the very margins of profitability, often only drawing a minimal salary themselves, sometimes well below the minimum or living wage. They can’t simply magic the money to cover additional wages out of thin air without help on other overhead priorities.

Business rates

VOAMost notable amongst these is business rates, which was the subject of yet more empty political posturing at the Conservative Party Conference, followed by an announcement of a further delay on proposals for reform in the Autumn Statement.  There are now fears that this burden will be even more overwhelming in some areas after next years revaluation.

Many are also creaking under the weight of additional pension liabilities now being phased in. The alternatives for these retailers will be to further reduce staff numbers, break the law, or simply go under.

There are some councils who earlier this year proposed schemes where they would reduce business rates for companies who agree to pay the living wage.  However the devil is in the detail and many of the proposals only meet a small part of the additional costs imposed by the increase to the minimum wage.  Although I’m sure most small retailers would prefer to pay their staff more given the opportunity afforded by overheads savings elsewhere

Can’t pay Won’t pay?

There is of course the argument that if you can’t afford to pay a decent wage, you shouldn’t be in business anyway, but that seems to me to be an attitude that runs contrary to the ethos of the Living Wage principle.

Surely small business owners have the right to make a reasonable living as well as their staff, and options such as statutory profit or equity sharing could be considered for smaller employers and their employees.

I’m a supporter of the Living Wage and I’m delighted it’s finally starting to become a reality. But it can’t simply be waved into existence without some thought for the implications for companies who, no matter how much they may back the principle, may genuinely struggle to pay it.

Without a more comprehensive approach to the overall economic model that these businesses face, it’s likely that, for some of them, the Living Wage could easily become the living end.

falling-off-cliff_2046653c

This article is an updated and expanded version on my recent Retail Week column

Testing Technology in Tottenham Court Road

main logo blueIn the latest of my occasional store analysis outings in association with Shoppertrak, I visit one of my old haunts in London, checking on the some of the huge hi-fi and technology stores in the capital’s main street for technology addicts to see if their stores are as cutting edge as their products.  I include some independent stores as well as one that would probably be familiar to everyone.  The results surprised me and point to a number of areas where some old fashioned personal service wouldn’t go amiss amongst all the impressive gadgetry.   

Whilst visiting most of the major mobile phone retailers in Tottenham Court Road in preparation for my last Undercover Analyst post, I found myself drawn into a trip down memory lane as I eyed some of the older technology stores in the area.

As I said in my previous post, back in the 90s if you wanted the latest slab of shiny consumer technology there really was no better place to come. I was a frequent visitor. In fact it was only a few years ago that I switched from a TV I bought there 25 years ago, and that was only because of the digital switchover. I like to get value for money out of my purchases!

Everything had changed of course, as you’d expect in the world of modern gadgetry, but many of the stores had a familiar layout and a good deal of the sales pitch was pretty much the same as it had been in the days of tower systems and VHS.

Having just taken notes on some of the most cutting edge gizmo stores on the market, I thought it would be good to see how the more traditional technology retailers were doing, if there is such a thing as ‘traditional’ technology.

The first store I visited store predominantly sold Hi-Fi gear. I’m not sure if calling it that is now an anachronism, but I enquired about a sound system anyway. The sales adviser seemed very knowledgeable and had an impressive amount of product knowledge to call on. Buoyed by this initial encounter, I asked if I could perhaps have a demo of the system and the salesman’s face lit up. All I had to do, he explained, was to visit their demo area on the third floor where someone would be happy to help me.

Missing Link

This is where the experience took a disappointing nose dive. I wasn’t escorted to the demo area, I was just told where it was. This seemed like serious missing link in the service chain to me. Most stores, most notably the large supermarkets, now train their staff to take anyone who enquires about a product to where they can find it. Just sending someone risks that person not finding it or changing their mind in transit. It also gives a rather offhand impression of the service model.

pointingJust pointing someone in the general direction is acting like a signpost. Leading someone to the product is a positive interaction with the customer and keeps them engaged. Moreover, in this case I was supposedly interested in an expensive sound system, not a bogoff on a tin of baked beans. It could have been a very costly mistake for this store. My maxim to staff is always ‘guide, don’t point’.

Once on the third floor it took a while to catch the eye of the assistant, who apparently had no idea I was on my way. Even a phone call from the ground floor warning them of my impending arrival was clearly too much to ask. A totally cack-handed way to operate a sales handover in my opinion, and something they really should work on.

The demo itself went well and I felt the adviser really knew his stuff. But the way I’d had to pretty much drive the process to get there myself left me feeling disengaged by this point. I think, had I been a real customer I might not even had got that far.

Overall though, not a bad store, but some serious service issues to deal with.


ShopperTrak says – How are customers moving around the store? Gaining an understanding of how shoppers are moving around the store can help to ensure that shoppers don’t miss out on any stock as well as making the most of product placement.

I.e. retailers may find that customers are regularly coming in to the store to purchase small items such as headphones but that they are experiencing a high abandonment rate once shoppers realise that these items are located on the third floor. By moving headphones to the till area, the retailer may see a boost in conversion rates.

Retailers can also look to data to monitor the success rate of implementing new changes, i.e. staff radios. I.e. did conversion go up when staff began using radios to communicate across different floors? They can then tweak these changes accordingly.


My next visit was to a well known electronics supplier. This store sells a variety of less well known brands but is a seriously great place to come for anything from a walkie-talkie to a GPS enabled swizzle stick. I have to admit I could, and probably have, spent hours browsing amazing gadgets that I’d never heard of whilst desperately trying to find a justification for buying. Luckily for my bank balance I usually fail.

Plain Vanilla

Having said that, it’s a bit plain vanilla in terms of shop layout and fit-out. It looks like the store was built around off-the-shelf shop fittings bought in a clearance warehouse at the end of the 1990s. I’m sure that wasn’t the case, but it was not exactly what you’d called ‘retail theatre’. Slightly incongruous for a shop selling up-to-the-minute products, but maybe they think the merchandise is exciting enough.

vanillaThe stock displays were neat enough and everything was easy to browse. Staff were around and someone from the back of the store shouted across to me to ask if I needed any help.

To me that’s an approach that’s about as contemporary as the shelving was in the store. If you’re going to engage with a customer, do it face to face and with some commitment. Throwing your voice across the shop is also throwing away a golden opportunity to turn that interaction into a sales opportunity. In many respects it would be better to say nothing than do that. Having come from several stores with a much more focussed customer service ethos, even though it was probably poorly executed in some cases, this seemed like a bit of a throw-back.

Again not a bad store overall, but still lacking that certain something.

My final visit was to a store that today stands pretty much unchallenged in the landscape of UK technology retail today. It’s my policy in these articles not to name stores, but I’m sure it won’t take too much of a leap of imagination to work out the name. It houses a number of concessions and has a wide range of different brands on offer. Indeed it recently merged with another equally ubiquitous high street retailer.

There were a lot of staff about, but oddly many of them appeared to be cleaning staff. They were adorned with Hi-Viz jackets and were busy with cleaning tools. It seemed to me to be an odd time to be cleaning as the store was fairly full of potential customers. I’m assuming it was an outsourced company, but if it had been my store I wouldn’t have wanted to see them on the shop floor during trading hours.

There were numerous sales staff floating about, but it was difficult to get their attention. One of them seemed to deliberately avoid my gaze. I have to say I’ve had this experience in the past in these stores, and it was a behaviour they were at one time famous for. I understood it had been ‘trained-out’ of staff after an extensive re-branding effort a few years ago. Maybe this guy had missed the seminar.

Technical Problems

Many of the products on sale had a demo facility, which was a great idea, except for the fact that most of them appeared not to be working that day. When I finally did manage to capture a member of staff they explained that they’d been having technical problems, so perhaps I just picked the wrong time. Once we did get some of the demonstrations going they were generally a good sales tool.

I must admit I wasn’t particularly impressed after my visit and did notice a customer satisfaction button by the door on the way out. I’ve noticed these are becoming more popular now in larger chain stores, although I suspect the data they provide will be about as qualitative as badly implemented footfall counters. On this occasion it was placed slightly behind the door so I’m not sure many customers would have seen it anyway. Perhaps an indication that the store staff were not particularly keen to see them use it.

I’d previously seen improvements in this company’s customer service performance so it was a surprise to see they’d started to slip back into their old ways. Perhaps having less competition leads to complacency.


ShopperTrak says:

• It would be interesting to use heat maps or beacons to map out key areas and understand which concessions are drawing in shoppers. By doing so, retailers can gain insights into the customer journey and how shoppers are moving around the store, as well as store layout, staff allocation etc.
• An understanding of your busiest periods means that retailers can use their least busy times to carry out staff training and cleaning for example.


robot

“Take me to your checkout!”

So there you have it. Smart gizmos not always being sold in a particularly smart way, which considering we’re talking about highly advanced products seems something of an irony.

I was at a conference a few months ago where the concept of robot salespeople was being pitched. It’s not as outlandish as you might think either. These robo-shop-assistants were based on a Japanese designed personal helper droids intended as home help for infirm people. Apparently they cost around a thousand dollars and are easily re-tasked to the world of retail. Maybe we’ll see these in our high street stores in years to come, and I think it would be a good bet that the first place would be in a technology store.

I’m not sure if that says more about retailers than it does about the evolution of artificial intelligence. But as I saw on my travels around mechanical Mecca, there may well come a time when it will be difficult to tell which gadgets are for sale and which are doing the selling. In some instances I don’t think that would be a bad thing.

For more information and insights from Shoppertrak, click the logo below and subscribe to my blog for future posts from The Undercover Analyst.  I could be coming to your store soon!

The Undercover Analyst – Checking the Numbers on Mobile Phone Stores

main logo blueIt’s time for another of my regular checks on high street operators in association with retail analysis experts ShopperTrak. This time I’m looking at mobile phone stores, a category we’ve seen explode over the past 10-15 years and one which has come to dominate our high streets. As always these reports are written after actual visits to selected un-named stores and will focus on areas such as store design, operation, staff management and customer service.

Ok, I’ll admit it, I’m a bit of a gadget freak.

I spent my youth dreaming of the kinds of gizmos that now populate our everyday lives. Star Trek style talking computers, Blade Runner video phones, Batman’s wrist worn communicator and, not forgetting, jet packs.

The last item on my list might still be a way off, but the others are all with us now in ways that most of us have come to regard as just a normal part of our ordinary lives. Those of us who can remember the days before you could stand in the middle of nowhere and to speak to someone on the other side of the world, simply by reaching into your pocket, probably won’t appreciate how mind blowing that still is. The fact that such technology has now settled in as part of the mundanity of every high street might have something to do with that.

JetstonsThese stores sell us brain meltingly complicated technology in much the same way as we’d pick up a packet of kidney beans in our local supermarket. In fact, in many cases, we could do both under the same roof. It’s technology Jim, but not as we knew it!

For this outing into the new frontier of consumer electronics I chose a road I once frequented on a regular basis looking for the latest in Hi-fi and sound equipment. Tottenham Court road in the 80s and 90s was THE place to come for the latest sleek sound system at knock down prices. Part of the process in those days was to visit every store looking for the best deal, before playing each shop off against one another. I have to admit that’s a bargaining technique that stood me in good stead in future years in business.

It was therefore saddening to see upon my return, that my choice of electronics stores these days was not as diverse as it once was It is predominantly populated with mobile phone stores, with only a few of the store fascias I remember from the old days.

I chose to visit three mainstream mobile phone shops to make direct comparisons between them. As they are all selling exactly the same hardware, with only notional differences in tariff offers, it was quite easy to gauge how they stacked up against each other.

The Price is Wrong

The first store was arranged all on one floor so my arrival was easily visible to all the staff, who immediately came over and spoke to me. I could also see that other customers were being dealt with throughout the store. Thankfully, there wasn’t too much of the hard sell which can be common in similar stores.

oopsThere was some impressive up-selling going on from the outset as the store manager who had approached me enquired about the status of my current mobile contract. Interesting that these days no one ever assumes that you wouldn’t have a mobile phone!

Mobile phone stores are now gradually diversifying into ancillary products and this particular store had a good range of headphones, presumably for those who also use their phones as MP3 devices. I enquired about the price on a pair that caught my eye and this is where the fun began.

The price displayed said £160 which both I and the sales adviser felt was a tad on the high side. On checking the computer it turned out he was right, the actual price was an infinitely more reasonable £25! Neatly proving the advantage that a human has over a machine generated price tag. It also suggests that this company might need to double check their merchandising procedures! Regular shop floor and merchandising audits have been a feature of my own stores and really should be carried out at least once a month. This neatly demonstrates why.

Overall though it, was a very neat and well run store. A good experience.

ShopperTrak Says – Using retail analytics, it is possible to measure the success of different initiatives, including new customer service programmes and training to make sure your sales staff devote their full attention to engaging with the customer at the right time.

Wall of Death

In store number two, customer interaction seemed like it was top of the agenda as I was greeted by a designated staff member from behind a podium at the entrance.

Sadly, this seemed to be the limit of the initiative as I was then confronted by a human wall consisting of 4 sales staff in a line, each chatting to each other and apparently oblivious to my presence.

This was a store that appeared to know what was needed but was supremely bad at delivering it. Displays were messy and in desperate need of a spring clean. In one corner I noticed a seating area with charging points for phones, presumably there to increase dwell time in the store. A good idea in theory, although the floor was grubby and the chairs looked like they’d seen better days. There were no magazines or other literature for me to read and the idea of any refreshments being available seemed a forlorn hope.

ShopperTrak says – It’s crucial that retailers look at labour allocation in order to strike a happy balance between the number of customers entering the store and the availability of staff on hand to greet and serve. Shopper traffic data provides retailers with their truest measurement of sales opportunity, which is key to effectively scheduling labour. By scheduling the appropriate amount of employees and the best sales staff with the hours of greatest opportunity, it is possible to turn labour from an expense into a strategic sales tool. This includes including identifying when there is too many staff on the shop floor. During our visit, staff far outweighed customers.

I made a hasty exit past the still self absorbed sales staff and headed for store number 3.

Open For Business

On first appearance, my final mobile phone store looked like it was going to be a bit of a wash out. Visual merchandising was pretty weak with a painfully sparse window display seemingly based on an odd cardboard box theme.

break-time-coffeeOnce inside, however, it was a completely different story – an effective layout with lots of opportunities to interact with products and plenty of customers being attended to on a one to one basis. There seemed to be a high number of staff and no one appeared to be kept waiting – a great result! The displays were clear and informative and would have kept me amused for a fair while even if there was a short delay in service.

I noticed there was a downstairs area so I headed off to investigate, finding a similar seating area to the one in the previous store. But that’s where the similarity ended. The execution of the idea here was far more accomplished. There were the same plug in stations for your phone or laptop, but the area was clean with a designer look sofa, plenty of literature to read a tea and coffee station, water cooler and even a well stocked fruit bowl! It looked like a place you could have stayed for lunch, although you might eventually have to buy something for the sake of appearances!

The final touch was the availability of meeting rooms adjacent to the seating area. Not something I’ve ever seen in a store before, but somehow it seemed to fit with the general ethos. It had a real ‘open for business’ feel and I’m sure this area could generate spin-off sales of their technology products. Something other similar stores could learn from.

ShopperTrak says – The break-out area was a real nod to the ‘retailtainment’ trend, going beyond just selling to shoppers, to entertain , and inspire them by providing the best possible shopping experience. In this case, the lounge was the perfect opportunity to say, ‘come on in, stay a while’. By encouraging shoppers to spend longer in the store, retailers increase the likelihood of shoppers making a purchase.

However, the measure of a good window display cannot be underestimated., if potential clients do not feel the pull to come into the there is no amount of entertainment inside the store that will help drive new sales, Being aware of pass by traffic peaks and having attractive window displays can really boost draw rates and as a consequence new sales.

This more positive experience marked the end of my survey of the mobile operators. Overall they seemed a mixed bag. Some good ideas in terms of design and add-on services, but in a few cases this wasn’t backed up by staff with enough engagement for my liking. The other interesting aspect was the expansion into other categories which seems to be a common factor in many retail sectors these days. With the merger of Dixons and Carphone Warehouse still fresh in our minds I wonder how long we’ll continue to see mobile phone stores on the high street dedicated only to this one narrow aspect of technology.

In an attempt to answer that question, I’ll be taking a look at how the wider technology sector is faring in my next report in a few weeks time. So don’t touch that dial folks!  For more information on ShopperTrak’s full range of analytic services by click the link below.

shoppertrak_FINAL_283_285

Hope or Hype? – Why I Never Trust Economic Reports

Economic reports seem to be like buses. You wait for ages and then four turn up at once.  Last week they seemed to leave the depot together, all promising to take us somewhere nice for the summer.

Nielsen’s report on consumer confidence was the first to pull up to the kerb with figures that seem to back up those released last month by GFK. Both showed consumers looking at the high street with a more optimistic gaze, with Neilsen putting consumer confidence at a 9 year high as opposed to GFK’s more buoyant outlook of a 13 year peak.

Then came the CBI’s quarterly Distributive Trades Survey – a measure I’ve never been particularly impressed by – reporting expectations for June riding on a 27 year high, although in reality orders were only growing at their fastest pace since 2010.

Footfall monitoring company Springboard also announced footfall on the high street over the bank holiday weekend eclipsed that of shopping malls with an increase of 4.4% as opposed to an almost equal drop in retail parks and shopping centres.

Finally Asda’s income tracker proclaimed that us lucky Brits now have around £17 a week more in our eager mitts than we did this time last year.

Rosy View

If we’re to believe these statistics, high street store operators can at last cast the rose tinted spectacles from their reddened eyes and peer at the horizon with renewed hope. We now just have to for wait for those armies of revitalised shoppers to beat down our doors with fists so full of cash we’ll barely be able to fit it all into dusty till drawers previously inhabited only by moths and a few dog-eared copies of the last set of reports that promised us roughly the same thing a few months ago.

You might guess from my barely disguised flippancy that I don’t personally put a great deal of store by these reports. And you’d probably be right.

Nielsen’s epistle for example was carried out using a sample of respondents from online shoppers. A group who are already looking to buy (or why are they on the internet being asked about shopping?) so will naturally be pre-disposed to making a purchase.

The CBI’s survey is a constant source of bemusement to me, and many of my own suppliers that I have conversations with. They appear to have their heads in much loftier clouds than most of us, being twice removed from the actual consumer transaction. In my mind the impact on the high street of an estimate about probable orders is tenuous at best, and has been proved to be such on many previous occasions.

In terms of footfall I’d say that Springboard are one of the more accurate companies out there, but a broad headcount usually leaves me shrugging my shoulders, as such a number isn’t much use without the associated conversion data.

Wet Seaweed

Income trackers are the statistical equivalent of the wet seaweed barometer, based as they are on a set of constantly fluctuating, notional measures. And in the end is a figure like £17 a week really going to make that much difference to the behaviour of the average consumer? Not if other analyses are to be believed which suggest that people are more likely to remain in their current pre-programmed behavioural loop of saving more and spending less after being ingrained with fiscal paranoia for the past 7 years.lf-WeatherRock

And to a large extent those people are right. There are so many factors in the shifting economic landscape right now that basing any predictions, let alone business decisions, on these sorts of analyses would be somewhat precarious.

This was neatly demonstrated on Friday when the comparison between Neilsen’s and GFK’s figures seemingly evaporated after GFK released new numbers showing consumer confidence fell to a 5 month low in May, ostensibly dented by uncertainty surrounding the General Election.  And as the pollsters showed us in that election, predicting outcomes based on what people tell you in surveys is a very tricky business.

Optimism Vs Realism

I’m all for a bit of optimism, but it seems like we rarely have realism in terms our business expectation these days. A few years ago I was bemoaning a similar level of ill-founded pessimism as being the harbinger of more doom and gloom than was healthy.  I’m equally sceptical about skeins of upbeat predictions.  Is a happy medium too much to ask for?

With rent and rates still at record levels and unrealistically low interest rates just waiting to be let off the leash, I think a healthy sprinkling of caution needs to be infused into any ideBus_Twitas that we’re about to see a renaissance in high street retail.

I could be wrong. In fact I hope I am, but in the end the only reliable statistic for a business is that figure on the bottom of your profit and loss account.

Personally I’d prefer to see what’s in the emergency budget before I invest in any bunting. Or maybe wait for the next report to see what that has on board. And just like the Clapham omnibus, I’m sure there’ll be another one along any minute.

This article was also published online as one of my regular columns for Retail Week Magazine

 

Selling Democracy by the Pound

for-sale-democracySome of my more regular readers will have noticed my absence from the these pages over the past coupe of months as I took some time out from retail cogitation to try my hand at politics.

My nomination came at a transitional point in my career as my company had just closed it’s last high street store after making the decision back in 2013 that we would move our business into other channels. I’m also looking at more ethical areas of retail so again the Green Party seemed a good fit.

I had actually intended to take a few months off to relax before launching a new business, and really accepted the candidacy as a paper exercise. But as with so many things I become involved in, I couldn’t just go through the motions.

Many people found it odd that I should have stood for the Green Party in one of the safest Conservative seats in the country. Firstly because The Greens aren’t generally known as great lovers of business, and secondly because I had about as much chance of winning as I had of joining The Spice Girls on their next reunion tour.

But I didn’t go into the campaign expecting to win. I did it for the experience and to make a point. The point being that business can be a force for good in society. I’m currently exploring a concept that I, and a few others, have come to call social capitalism. It’s a movement I believe small and medium businesses should be an integral part of, and a party like the Greens, being so far untainted by the guiding fist of big corporates, seemed like a good place to start.

Familiar Ground

Political campaigning felt strangely familiar to me as a retailer. And really that should have been less of a surprise. An election is essentially a marketing exercise with yourself as the product. So it soon became obvious that many of the skills I’d learnt at the helm of a multi-channel retail business could be easily applied to the more esoteric ideals of politics.

This was an election that many people predicted would be won online, with social media playing a big part in the campaigning process. It certainly seemed that way to me as Facebook, Twitter and Email accounts became integral to my political routine using software that was obviously based on CRM systems that would be familiar to any customer service manager. And I did indeed find these channels to be an essential element to getting the message out there, just as I do in my retail business.

I also saw many other candidates fall foul of not paying enough attention to these avenues, as well as some that used them entirely inappropriately. Branding has also become an important aspect of any political party and The Green Party really seemed to get it’s act together on standardising the look of logos and marketing material, which was encouraging.

Hustings were no different in my mind to a simple sales pitch and I even found myself back standing behind a market stall, although this time my stock in trade was leaflets, manifestos and my own personality, such as it is.

Too Big Data

The other familiar aspect to all this though was that frequently cited phenomenon – Big Data. This is a buzzphrase I’ve never been entirely comfortable with. To me it should really be called ‘Too Big Data’.

I’ve always been suspicious of the idea that the more analysis you do, the more data you have, the more accurate your forecasts will be. This is self evidently not the case. And the plethora of polls, super-polls and polls of polls during the election on served to underline this point by being so spectacularly wrong. Not a single published poll correctly predicted the correct result. Although there are reports that some pollsters did have results that reflected the actual outcome, but they were so far adrift from others that they were nervous of publishing them.

As many retailers will attest, analyses are all very well, but ultimately there’s nothing remotely predictable about the great British public, as voters or consumers. In that context I suppose it was a stroke of genius on behalf of the Conservatives to employ a former market analyst as their campaign manager. One who arguably used these inaccurate polls in a feat of misdirection worthy of any accomplished prestidigitator.

Or maybe it just goes to prove that it’s not how much data you have, it’s how you choose to interpret it that counts.

Money Back Guarantee!

article-1279806-09A92C17000005DC-437_634x369So there you have it. My brief political career dashed on the rocks of our rather arcane electoral system and a bit of good old fashioned market manipulation.

With so many unexpected parallels with the worlds of marketing and retail, it has left me wondering even more about what really constitutes democracy.

If we’re increasingly going to be sold ideology and aspiration like packets of soap powder, maybe there should be the same sorts of checks and balances as there are in the world of consumer protection.

Perhaps if politicians were made to operate under the same stringent regulations that retailers have to abide by every day, we may see a few less un-kept promises and bit more attention paid to customer satisfaction.

In which case will we be entitled to a full refund if yet another government fails to perform as advertised?

The Undercover Analyst – Luxuriating In Manchester

main logo blueAs part of a project with retail analytics experts ShopperTrak, I’m continuing my look at the retail landscape in areas around the UK and sharing some insights through regular blog posts.  Taking a broad cross section of market sectors and visiting unnamed stores, I comment on how they fare on specific operational areas I and ShopperTrak regard as being key to a successful and customer responsive store.  I’m looking for good and bad practices, innovative ideas and exemplars for all of us to either follow or avoid in our own businesses.  This time I’ve been looking at high end luxury stores in the centre of Manchester.

One could define luxury as any product that isn’t an essential. In that sense anything other than one pair of shoes at a time would be seen as excessive, unless of course you’re a centipede. But of course we all buy things we want rather than need, and in that sense we all indulge in luxury to some extent.

Having run a chain of jewellery stores for the past 20 years, it seemed like a natural step for me to look at this sector for the next of my occasional blogs in association with ShopperTrak, and for this outing I chose the city centre in Manchester on a busy Saturday afternoon.

Since the horrendous bombing of 1996 which wiped out nearly a third of its retail space, there has been a positive renaissance of retail offer in the city. Luxury stores are very well represented and I found a good range of mid to high end opulence to choose from. I went to three stores. Two within what has become a luxury enclave within the mainstream shopping locale, and one in the more business orientated sector.

I think I can speak with some authority on how luxury shopping should be done. It’s not really a complicated proposition. You provide a cosseting but inspiring atmosphere and you have on hand a team of well trained and well-presented staff that have all mastered the art of engaging with customers without pestering them. The final ingredient is to have a good range of aspirational products at the right price. It’s pretty much like any other retail proposition except maybe the price issue isn’t quite such an imperative.

Quick off the Mark

The first store I visited was that of an iconic British brand. Stock was principally aimed at women with what appeared to be an afterthought nod towards menswear.

Of late this company has been struggling somewhat which might be why the sales staff seemed so eager to see me. I was the only person in the shop at the time, and as a result, I was approached by 3 sales advisers inside 5 minutes. They were well presented and pleasant, but their patter sounded slightly scripted to me.

runners+starting+blockThere’s nothing wrong with attentive staff, but you do need to give customers room to breathe. The rule with my own staff was always to greet customers when they entered the store and then leave them alone for at least a couple of minutes. There was a high ratio of staff to customers here though, so perhaps they needed to co-ordinate more.

In a luxury environment it’s easy to over-staff. Apple stores, for example, have a deliberate policy of no signage to encourage customers to ask for help. This works well but you have to be on top of your game in terms of availability of advisers. People paying these prices don’t like to queue!

The store layout was rather self defeating, and seemed to be largely making the best of a pretty lacklustre job. A stairwell that took you to the second floor was located very close to the entrance, which I imagine diverts a fair number of browsers away from the sales area on the ground floor. Also, considering this was a store obviously aimed at women, it seemed incongruous to me that their target demographic had to plod up a flight of stairs to get to the merchandise. Not a great strategic move and something I would have expected to have been re-modelled during the fit-out.

Visual merchandising was on the poor side, and there was no opportunity for direct digital interaction. One member of staff was toting an iPad, although it was unclear if this was for a customer service role, or just internal use.

Considering this company has recently invested heavily in omnichannel, it was odd that this didn’t seem to be heavily integrated into the store. One other peculiarity that struck me was the lack of in-store music. Something I would have thought would be de rigueur in any similar retail environment.

ShopperTrak says: The nature of the luxury sector means that the ratio of shoppers to staff can, on occasion, become unbalanced. Location based analytics can help retailers to identify their busiest periods, highlighting when there are too many – or too few – staff on the shop floor as a result. This helps teams to allocate resources effectively, ensuring that the customer is only greeted once. Each store has a unique DNA and knowing when to greet the customer depends largely on the nature of the store. Armed with this knowledge, retailers have the power to make decisions relevant to their own environment.

iPads are an increasingly important sales and transaction tool within the physical store, with staff now able to offer shoppers the opportunity to buy stock that may not be available in-store, there and then. Luxury retailers can measure the impact of in-store technology by carrying out test periods, tapping in to data to see what effect these periods are having on conversion rates. Brands can also use location based analytics to monitor the success of digital screens and displays by seeing how long customers are lingering in areas with digital features.

A New Dimension

The second store on my luxurious odyssey was only a short distance away from the first but it was like stepping into an entirely different dimension. It was obviously a fairly new fit out and had taken advantage of many of the contemporary twists now available. There was an impressive open aspect design, well thought out with a much more focussed approach to merchandising and display. This store showed just how much impact a well thought our environment can make to your experience, assuming you have the budget to spend.

in store screenVisual merchandising was well implemented with window displays cleverly arranged so that items in the window grabbed your attention and directed it towards matched displays further inside the store. This had the effect of drawing you instantly in. Digital was well integrated throughout, with screens showing footage of the merchandise featured in runway shows. You know you’d arrived at fashion central when you stepped into this store. These aspects also caught customer’s attention and increased general dwell times.

The fit out was heavily weighted towards experiential aspects that engaged you with the brand rather than pointing you towards specific products. It has that quintessentially unhurried atmosphere, enhanced by nice touches such as a chill-out area near the changing rooms, with sofas, magazines and hot drinks available. This echoes stores such as cycle Mecca Rapha, where customers are encouraged to simply hang out rather than being pressurised to buy.

Staff were equally laid back, but all seemed to be busy and focussed on key areas of the store. The location of sales advisers at any given point seemed strategic, so that they could move seamlessly from housekeeping activities to customer service when needed. I was approached after 3-4 minutes browsing – A much better timeframe for initial interaction. I felt like I could take my time, but someone would be available as soon as I need them.

Overall this store was an example of exactly how well a store can be laid out and operated, assuming money is no object.

ShopperTrak says: The shopping experience is constantly changing with the brick and mortar store no longer just somewhere to purchase products. Rather, it is now an environment in which to be inspired, entertained or just to relax, with the ‘retailtainment’ trend high on the agenda for much of the luxury sector.

The chill-out zone in this particular store is a fantastic example of this and a great initiative that encourages shoppers to spend substantial time in-store. However, it’s important that retailers monitor the success of these initiatives to see if they are driving more traffic to correlating zones, i.e. the changing rooms.

Location based analytics also enables retailers to analyse the optimal length of the in-store experience for each store location. For example, how long is the dwell time when it starts to negatively impact conversion rates? Longer dwell times are seen as a positive when the client is engaged and conversion rates are increasing, but when the conversion starts to drop it may mean that customers are spending too much time waiting or queuing for example.

Not a lot of help

My final outing was to another iconic bastion of the luxury sector.

In operational terms, one bad mark against them was that after being in the store for nearly 15 minutes, not a single sales adviser had spoken to me. This was also the smallest store I visited so there really was no excuse for the lack of attention, especially as I was the only person in there at the time. Perhaps I just didn’t look like their kind of customer.

InIgnore some ways being given the freedom to browse unmolested by staff was a blessing, but being completely ignored is just as bad as being bombarded with offers of help. It’s a perfect example of how important it is to get the balance right.

That said, the store itself was well appointed and had a good designer feel about it. The window display was impressive with some clever lighting effects. Merchandise in the store was placed across a number of different levels meaning that customers were encouraged to look up towards smaller items, whilst clothing was within easy reach lower down.

It seemed this store was aimed at local businesspeople browsing in their downtime, and in that sense the clothing offer and the environment were perfectly pitched to that market.

Certainly not a bad shop, but in my opinion not really hugely inspiring either. But then perhaps I’m not in their target demographic, which might also explain why none of their staff seemed to notice me.

ShopperTrak says: Window displays in this sector are often designed to be ‘showstoppers’ that reflect the opulence and fashion-forward approach so synonymous with luxury. It’s key that retailers measure the success of visual merchandising to understand the impact it’s having on draw rates, i.e. the number of people entering the store.

So a real triumvirate of an in-store experience. Something I’m itching to characterise as the good, the bad and the ugly, although that’s perhaps unfair to at least one of them. It was certainly an eye-opener in terms of the wide range of approaches to what is undoubtedly a narrow market sector. Some of the stores radiated an obvious nonchalance towards customer interaction, whereas others were falling over themselves to engage. From an experiential perspective I think stores number one and three could benefit from a proper independent mystery shopper report, with store number one needing a really fresh eye cast over the shop-floor design and customer experience perspective.

For my own part I saw some great ideas in shop number 2 that showed just how well things could be done, not just in the luxury market, but across the board. Factors that I’m sure will inform the way I approach such things in any future store environments I set up or advise on. Just like haute couture designs eventually filter down to the more mass market, we can all take aspects of these stores to use in our own businesses, even if we maybe can’t afford the full outfit.

Join me next time when I’ll be looking at electronics and tech retailers.  For more information on ShopperTrak’s full range of analytic services by click the link below.

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Phones 4U – The Winners And Losers

phones 4UThe announcement by Phones 4u’s administrator Price Waterhouse Coopers that it is closing 362 of the retailer’s stores permanently really is an appalling outcome for the 1697 store staff who now find themselves out of a job.

I feel very sorry for these people at the sharp end of what seems on the face of it to be a rather sordid tale. I know from speaking to some of the employees that most had absolutely no idea that their jobs were balanced on such a knife edge, and from what I understand from other reports, senior management had little inkling either.

Perhaps they should have had though. Certainly the company’s main investors could have shown a little more sensitivity to the likely outcome of negotiations with the four main carriers when they explained that they weren’t able to offer competitive terms in the face of a mountain of debt that needed to be serviced. Especially as a good deal of that debt was apparently self imposed as a result of some rather creative financial arrangements.

Equally Vodafone and EE should perhaps have considered the impression their actions would give to their own customers when they, fairly unceremoniously, pulled the rug from under a long-term business partner. Perhaps they weren’t prepared for Phones 4U management to take such drastic action. I know I was personally flabbergasted at how easily they appeared to give up the fight when the Vodafone contract had another 6 months left to run and EE’s wasn’t due to expire for a further year.

Most businesses would have kept trading and explored other possibilities, probably including some hasty re-trenching and fence mending with all the carriers. Of course I’m not privy to all the reasons for their decision to go into administration so eagerly, but it seems to me that a business with over a billion pound turnover and profits in excess of £100M might have been worth a little more effort than a press of the nuclear button without further attempts at diplomacy. I’ve certainly seen many much smaller businesses struggle to stay afloat for a lot longer than these guys.

Easy Money

Maybe that’s the problem. For those companies already staked in the game, the mobile phone business has been seen for some time as easy money. The phones and tariffs are laid on by other companies and an obliging public pitches up every time one or the other produces another subtle flavour of hardware or call package that in essence does the same thing as the last, only slightly better. These carefully stage managed increments keep the punters hooked and the cash rolling in. Perhaps when things got a little tougher than that for the board, it’s just wasn’t worth the trouble.

Now the very same carriers that precipitated this situation are reportedly picking off the juicier fruit from the P4U property cherry bowl for their own standalone stores. After an epiphany, undoubtedly born of the internet, they’ve discovered that cutting out the middle men means the money tree just grew a bit taller.

It’ll be interesting to see if tariffs are reduced accordingly now there’s one less bite out of the pie. But somehow I doubt it, especially as most of the carriers have of late been furiously re-writing their contracts in ways that haven’t been particularly advantageous to their customers. And let’s not forget that, with a reduction in competition on the high street, the consumer is going to have less opportunity shop around. As the carriers take more of a direct sales approach, the choice will be limited to service and coverage rather than tariff with fewer independent resellers to stir the pot.

I suppose grabbing the tastier morsels of the Phones 4 U portfolio is a pragmatic move, but it still looks like opportunism born of fancy footwork on their part. In the final analysis the people who have, justifiably or not, pulled the plug are now picking over the bones of a business that previously appeared to be thriving.

A Dream Outcome For Dixons Carphone

Dixons Carphone don’t come out of this smelling like roses either, even though I suppose they can’t be held accountable for the actions of their own suppliers, it does look like a superlative bit of luck on their part that shortly after announcing the closure of 160 Phones 4U concessions in their Currys stores, their main competitor loses all support from their mutual partners. I’m not suggesting there was any collusion involved, but it does seem like the kind of dream outcome that many a rival company would have to pinch themselves hard to believe.

To be fair, Dixons have offered jobs to many of the former concessions staff, which does of course also provide them with a ready made workforce. They’ve also been making efforts to acquire a number of the Phones 4U locations and have been promising jobs for the staff involved in those locations. However it’s understood that the administrators have been less than enthusiastic, so one can only speculate as to the kinds of offers Dixons Carphone are making for the properties. Dixons taking over the stores could of course safeguard of a number of jobs, but they still stand to gain a lot out of the deal themselves.

bad smellThere were undoubtedly a lot of contributory circumstances leading up to this meltdown, but it still leaves a very nasty taste in my mouth and a hell of a stink under my nose. A ludicrous situation and a sad outcome that could have been avoided at so many key points. I only hope all parties concerned, including the P4U investors and management, the carriers, and Dixons Carphone are as uncomfortable about all this as I am.

Although I doubt any of us will be as uncomfortable as the store staff and their families who suddenly find themselves without an income so close to Christmas.