The Magic Tinterweb?

Another thought now I'm back in the saddle.

A number of retailers, including Game, Maplin and HMV have recently reported a drop in online sales, as highlighted by Retail Week, which, at a time when retailers are reasonably expecting that their online channel can be relied upon to boost sale,s driving growth and loyalty, raises some important questions...

Like- does this mean that online sales growth across the piece is now levelling off? Is the electronics and enterntainment e-commerce sector maturing so sales are slowing? Or is it just an issue with these websites themselves- is the proposition not right so they are losing market share to better placed competitors?

Well, in my opinion, to some degree I suspect it is a little from column A, B and C.

Whilst there doesn't really appear to be any evidence that online sales growth is slowing across the piece- and indeed there are plenty of success stories suggesting the opposite, British Retail Consortium director-general Stephen Robertson  has said that retailers are having to work harder to get the customers shopping online- promotions, marketing... in fact the same things they are having to do to get shoppers in their bricks and mortar sites.

And of course- the sector that these these retailers trade in, is one of the most mature on-line, and so inevitably the pace of growth seen in the past could not be sustained, especially in the face of some rather tough sector specific  challenges- such as the decline of the physical music market, lack of innovation in the gaming market, rising price of electronics; and growing confidence in the economy encouraging people to go out again rather than save their money and buy a DVD for example...

But I can't help thinking that, when it comes down to it, if the e-commerce channel as a whole isn't struggling, and in fact is still showing strong signs of growth- these guys must be doing something wrong. Because if the customers are there, then it's all about the proposition. And if they were offering the right product range, at the right prices, with the right level of customer service/experience, then we'd be spending more money with them?

Although..  if everyone is having to work a little harder to get potential bricks and mortar customers through the door, and e-comm customers logging on, then yes they have to of course have to get these basics of retail right; but that isn't enough- that's a given (is this where these three are going wrong?). They also have to think about the whole multi-channel offering, and customer experience they are providing, to provide the point of difference that makes the sale.

In an age of 'considered consumption' we are thinking ever more carefully about our purchases, so successful retailers will need to do the same..

Think Before You Buy: the new consumption

Conspicuous Consumption. The term coined by Thorstein Veblen in 1899 in the legendary 'Theory of the Leisure Class' (oft-quoted by marketeers and MBAs); to define the waste of money and/or resources by people, in order to display a higher status than others. As true today as it has ever been....Or is it?

The Future Laboratory believe we are seeing something of a paradigm shift in the way that we think about what we buy, our purchase motivations, and that conspicious consumption is no longer a signal of success, and is being replaced. Although this is not a brand new idea, as over a year ago Kit Yarrow (consumer psychologist and professor at Golden Gate University in the US) was talking about a new era of 'Considered Consumption'; I think the signs suggest that this isn't simply a knee-jerk reaction to the recession, but a real change in how we buy- thinking much more deeply about our purchases, and why we are making them.

But of course it did all start with the recession. It brought us down to Earth with a bump, from the heady  Boom Years, with over-priced houses, handbags, and  so on. We use the things we buy, our belongings, to visually communicate to others our tastes, values etc. And suddenly it is positively vulgar to boast and showcase our purchases, to 'conspicuously' consume designer shoes, when so many face pay cuts, job losses, repossessions; so we use our possessions and purchases to communicate something different.

A new era of 'Considered Consumption'. or even a 'conspicious abstention' has dawned. It means people want and probably need, to think more about their purchases, and the value of them.  There's less ostentation. We're still spending money- but more carefully, we want more bang for our buck, and that's the new chic- sense, not ostentation.
I think this is borne out by the recent Retail Week report that the premium market is set to take over from value as the biggest battleground for retailers. As the value sector matures, and gets hit with rising cost base, crowded market, and importantly- a shift in customers' minds away from cheap disposible goods, the opportunities present themselves in the premium sector. Value for money, quality and service is how these retailers will succeed, and for me, this is exactly what considered consumption is all about. We're still shopping, but we're spending less and wanting more for it. We want value, we want design, we want finish, we want durability, we want a customer experience and service to tell our friends about (quietly!)

But in some ways it goes even further than this- a Nu Austerity as The Future Laboratory are calling it, a philosophy that is growing in influence in Europe and the US- that's about more life, less stuff. Fair Trade, Vintage, Make Do and Mend, there are myriad examples- and it's all about being more socially/civically aware and reponsible in our consumption practises. "a return to basic values, materials and a way of life that is all about sustainability and conspicuous abstention".

Ring a bell? I guess Mad Men fashion isn't the only thing we have the 1950s to thank for.

There is only one Harrods... For now...

t was with not a small degree of sadness that See All her Faces noted this week that Mohamed Al Fayad has sold Harrods for £1.5bn to the Qatari Royal Family. Al Fayed has always claimed that he loved the store so much he would never sell it, and in fact intended to be mummified when he dies and buried in a mausoleum in the roof. But it appears he is no more immune to Old Father Time than the rest of us, and at 81,  he understandably has decided at his time of life, he wishes to spend time with his children and grand-children. Good for him..

And yet...

Three reasons for my disappointment.

1. Al Fayed was hugely protective of the Harrods brand, and despite the bounty that expansion of the store estate (particularly export of the brand overseas) might have brought, he felt very strongly that the power of the brand lay in it's exclusivity, and to that end,  it should only have one store- the iconic, most recognisable shop in the world- Harrods, Brompton Rd, Knightsbridge. Qatar Holding are in fact already making plans for overseas expansion- with talk of another flagship store in Shanghai for starters. Industry insiders (Drapers) however warn that in fact the Qatari Royal family should stay true to the roots of Al Fayed's formula for success and continue to run the business 'The Al Fayed Way', rather than risk diluting the brand, its cache, timelessness, and power, by building its presence abroad. I agree- whilst additional stores will undoubtably increase revenue, this may be at the long-term expense of the brand to its future detriment.

2. Al Fayed had an obssessive attention to detail and control of the day-to-day running of the business. His love and commitment to the brand was widely credited as crucial to Harrods' success. His creativity and understanding of the brand, its customers and the importance of its peerless reputation in luxury retailing were key to its revival and long-term success. As Sue Carroll says," he transformed a crumbling edifice into a a flamboyant store which has become an oasis of colour and charm in a homogenised world", and the success of this exercise is borne out by its continued strong performance. Despite the growth of competitors, and indeed despite a painful recession Harrods were able to post a 9% sales rise to £751.7m up to Jan 2009. N.B. Yes the strong tourist trade brought about by the weak UK pound undoubtably contributed to this, but by way of comparison- Harvey Nichols sales' fell 3% during the same period (Harvey Nichols sees profits fall)

3. Al Fayed was an extremely colourful character, and whilst he did not go without controversy during his 25 year reign of the most famous department store in the world, I believe the retail landscape will certainly be more dull without him. I'm glad that he too was proud of his Egyptian roots (Harrods' Egyptian Hall and escalator were spectacularly kitsch and thus in my opinion singularly fabulous) and whilst he may have been dismissed as 'that Egyptian Grocer' by some, he was generally considered one of the more popular and charismatic men to have been refused a British passport..

See All Her Faces wishes Al Fayed well, but suspects that he will find that even though in this instance the object of his affection is an inanimate object, he will still find that 'breaking up is hard to do'....

Smells Like Entrepreneurial Spirit

See All Her Faces is going to gloss over the impact of the recent election until we actually know who has won it (!!!) and move swiftly on.
This week sees the launch of a new BBC show- High Street Dreams, in which successful entrepreneur Jo Malone helps budding businesses launch their new products successfully in a competitive retail environment.

This show is significant at the current time. Providing support for small businesses is all the more important in a hostile economic environment, as such enterprises can provide lifeblood to a thirsty economy. They have the ability to be adaptable, and agile, evolving to meet changing requirements, and as such are less reliant on for example huge turnovers, or a high number of corporate accounts, or simply things staying exactly as they are, to survive and grow.

But more importantly for me, I'm hoping this show providing us with another high profile female role model in retail business, where we still have so few. This is particularly troubling as retail has a majority of women at lower levels of organisations (employing women to men in a ratio of 60:40), but somewhere along the way they are not making it to the top jobs- despite the fact that arguably "shopping is a female domain and in most households it is the women who make the key purchasing decisions". Retail Week

Of course, as is the case in most industries, this is likely to in part be because women make lifestyle choices (in terms of taking time out, or reduced work commitment to have children or manage family life) that preclude them, either by choice or involuntarily, from the most senior of posts. The retail environment, and certainly lower level retail salaries, are still less supportive of the sort of flexible arrangements that family women require to be able to take career breaks or reduce hours to support family life, whilst also, or subesquently, progressing their careers to the most senior of levels.

But there are probably other issues at play in our industry. There may be a perception issue, such that women are predominatly seen as 'product people', with more to offer in the range selection and creative decision-making processes, than on the Board. It is likely that a lack of self-belief, which is more common in women than men, may also preclude them from putting themselves forward for the most key rules.
Perhaps it's also the fact that the status quo of male-dominated Boards and recruitment processes also put women at a disadvantage when trying to break through the glass ceiling, and proving that they can be as tough as men when it comes to the difficult decisions, and also in demonstrating that the unique qualities that women can bring to senior management, in terms of empathy, thoughtfulness and so on, are equally as valuable.

Or perhaps the guys on the Board are simply the best for the jobs out there currently?!

Anyway. This is not to say that we cannot be proud of many very successful women in our industry. Women like Kate Bostock at M&S, Kate Swann of WHSmith, Jane Shepherdson at Whistles, Mary Portas, Michelle Mone of Ultimo, all spring to mind as shining examples of women at the top of their game in retail, which brings me back to my original excitement at seeing Jo Malone on TV this week.

The more successful female role models we have in retail, proving that with hard work, self-belief, and of course talent, women can rise to the top, the easier it is for the rest of us- to be motivated to achieve, to believe we can do it, and to challenge the status quo, for a brighter future for women in retail.

40 Bloggers who really count

Times Online features this week the top 40 bloggers 'who really count'. Unfortunately See All Her Faces isn't one of them quite yet. But if you're reading this, you may be interested in checking them out...

Of the esteemed list, See All Her Faces particularly likes Disneyrollergirl (fashion 'n' stuff), Huffington Post, (current affairs) Order Order (politics) and guilty pleasure PerezHilton (all matters celeb)

40 Bloggers who really count

What to do with a problem like Argos?

The Sunday Times reports today (Argos has lost its way, say investors)  that the owner of Argos and Homebase faces a shareholder backlash over plans to buy back £150m of its shares. The shareholders feel that instead the company should be focussing on it;s long-terms strategy. Of particular concern is how Argos stave off the continued threat from the big supermarkets.

And you've got to admit- the shareholders have a real point. As I reported in only my last post, the big grocers are becoming ever more powerful, such that globally they now comprise 6 of the 10 top retail brands- with the top U.K. retail brand Tesco turning over an astonding £62.5 BILLION last year. Some time ago, the big grocers made a strategic move to increase their non-food offering, offering furniture, electricals, toys in store, making tentative steps toward the Argos target market...

The likes of Tesco and Sainsburys offering these goods accessibly, and incredibly competitively priced (due to their huge clout and buying power- hard negotitating, and buying in massive volumes, to drive down cost) is a direct threat to the Argos business model, and the threat continues to grow. The larger supermarkets have extended their range, and now offer much of it online (in competition with the Argos website) and with these supermarkets now offering a catalogue that is available to pick up in store and order from- the signs couldn't be clearer- they are going after the £4.3bn that Argos turned over last year.

So what can the Home Retail Group do to protect their business for the long-term? Well the shareholders suggest that new store formats and new categories of goods, neither of which are bad ideas. But as ever, it is not as simple as that. This is a question of long-term stategy. Argos will need to consider anew what their point of difference can be, when the supermarkets encroach on their existing market so. For example- HRG and Argos have the advantage of an excellent delivery network, and well-used website already in place- perhaps they will need to reposition themselves as predominantly an ecommerce retailer. This would allow them to reduce their cost-base and pass the savings on, increase their product offering with non-stocked items, and become known for beating their competitors on product range, convenience of delivery, whilst maintaining keen pricing.

Either way, without some seriously smart thinking, they won't be able to stop the vultures circling for much longer...