Almost is Not Good Enough: How to Win or Lose in Retail, by Andrew Jennings
THE most important question every retailer (and every other business person) must ask is how does one more than simply survive in the current environment? And following that, what does one have to do to succeed grandly?
Author Andrew Jennings has held senior executive positions in high-end retail fashion chains internationally – including Woolworths, South Africa.
His answer to this question is "be relevant!". And in the rest of the book explains how. While retail is Jennings’ context, business people in other arenas will find his insights helpful.
“Understanding the customer is the number one priority for every retailer. Without this information, there is no possibility at all of becoming, or remaining relevant," he asserts.
The customer will decide whether you will be successful. And these customers are well informed and have many options other than yours. As such, shopping is more than simply choosing a product, putting it in a basket and paying for it. Shoppers need much more.
Five reasons for success
Topshop in Oxford Circus, London is hugely successful for five reasons. It has a wide assortment of carefully chosen, celebrity ranges of everything from jewellery to leisure ware.
With its keen understanding of the customer, it is constantly offering them something new that will maintain their interest. There is so much to discover that you could spend a whole day there.
Topshop’s offering is very personal, from having your denims embroidered or patched just as you would like them to be, to having a one-on-one shopping adviser in a private dressing-room.
With its ‘retail-is-entertainment’ approach, there are giant video walls and frequent in-store events.
At the other end are the stores that have failed, such as UK department chain store BHS. Its customers have aged, and the younger customer is not catered to. So, the store will die with its customers.
As revenues decline, the stores become tired and tatty. There is no excitement in their offering and they are left attracting customers with ever deeper discounts.
Relevant retailers’ understanding of their customers' lifestyles, preferences and shopping habits is the most effective way to grow loyal and profitable relationships.
To be relevant, Jennings explains, requires having a strong “point of view” – a clear statement of what your stores are about.
This encompasses everything from the store lay-out to merchandising, to everything you can see and hear.
John Lewis’s point of view is “Never Knowingly Undersold”.
Muji, the Japanese chain, offers goods of quality from stationery to household items and clothing. It is anti-glitz and offers no brands. Its point of view is simplicity, humility and calmness.
Assouline, the very high-end coffee table bookseller’s point of view, is expressed in its exquisitely styled boutiques. Here you are served espresso and champagne, as you sit on antique furniture and browse through the beautiful books.
Toy store Hamleys has as its point of view “a magical, memorable and fun toy world experience for children”.
The book is not only about the (very hard to achieve and maintain) soft issues, but also the unglamorous hard ones: supply chain and inventory management.
“Every retailer who cannot get the right product to the right customer at the right time is going to become irrelevant very quickly.” This involves, among other matters, reducing the number of times a product is touched and the distance it moves to reach the store.
A world of instant gratification
This is the new battleground for retailers in a world of hyper-competition, where consumers want instant gratification. Technology and new methods are helping this effort, and even if this is not very high on your budgeting process and general agenda, it is on that of your opposition.
WATCH: The world's moat advanced shopping technology
The gold standard is most probably Amazon, now one of the largest retailers in the world. Its success has been largely a function of itsprowess in supply chain management.
In 2005 Amazon launched its two-day delivery service of thousands of items. This service level, impossible without a superb supply chain, reduced to next-day, and now to 1-hour deliveries! And it will keep you informed on the progress of your order.
These levels are fast becoming “a ticket to play for anyone who wants to remain relevant”, notes Jennings.
There was talk in the past of customers doing everything online, making brick and mortar stores a relic of the past. It is true that online is rising 17% year-on-year, but provided that physical stores offer a superb shopping experience, they will always have a place.
However, any retailer that ignores ecommerce is taking a great risk. The solution is not a move to ecommerce, but to an ‘omnichannel’ enabling customers to buy from you, pleasantly, smoothly and quickly.
Ecommerce is not an easy answer. Physical stores occupy a location that cannot be simultaneously occupied by competitors. Online, the competition is not a block away, but a few key strokes away.
To be relevant online requires the same appropriate range of goods, tailored to your customer focus, and a very easy way to buy and have the goods delivered to a convenient location.
This could be your home or office, a partner store, or a conveniently located collection box.
Tailoring the experience to meet an individual customer’s needs and wants is certainly easier online – for you and for your competitor.
Online shopping allows the identification of trends with an accuracy impossible in a physical store. When customers stop buying at your physical store, it is difficult to track them down and find out why.
Online you are more easily able to identify people you have not served for a while and entice them back again.
Jennings concludes his book with his top ten takeaways. Here are two I have not touched on.
“Nurture passionate talent”: The most successful retailers are filled with teams who are passionate about what they do, so give them space to grow and develop, and allow them to make mistakes.
“Joined-up thinking – rules!” Every marketing campaign, ecommerce site or physical store must make sure it is communicating with every other element in your business. Pulling in opposite directions is a recipe for disaster.
Each chapter has textboxes that illustrate the chapter’s lessons. These offer iconic retailers' views, examples of extraordinary retail successes, and insights into well-known stores’ reasons for failure.
This is an engaging as well as informative read, by a man who has vast knowledge and 45 years of experience at the top of retail chains.
Readability: Light -+--- Serious
Insights: High +---- Low
Practical: High +---- Low