In an extract from his new book, Almost is Not Good Enough: How to Win or Lose in Retail, Andrew Jennings draws on his experience at Harrods, Saks Fifth Avenue and many more to explore how retailers can thrive in this unpredictable era.
Retail has always been a dynamic industry but right now it is going through an unprecedented pace of change.
Seismic economic shifts and breathtaking technological advances are changing the shopping experience faster than most retailers are able to react.
Customers are demanding ever more exciting experiences when they shop and have higher expectations of product, service, value and environment.
And, as if that isn’t enough to contend with, there is the multichannel reality to get to grips with too, which means the lines are continually blurred between virtual and physical space.
Any retailer that wants to stay in the game – let alone ahead of it – has to think in an entirely different way.
Get it wrong or move too slowly and the customer will be lost forever. They’ll already be onto the next big thing.
No one can stop change from happening, nor should they try.
“Any retailer that wants to stay in the game – let alone ahead of it – has to think in an entirely different way”
The secret to success is to be relevant. Know your customer, constantly innovate, hire talented people, embrace change and never ever accept things are nearly okay.
To explore what being relevant really means, I spoke to more than 40 of the world’s top retail chief executives who have contributed to my book.
Each one has given their unique insight on how to create and maintain the wow factor today.
Stand for something
In retail, if you don’t stand for something, you stand for nothing.
No one walking into Fortnum & Mason would ever mistake it for Selfridges or Debenhams, and vice versa. If I blindfolded you and took you into an American store, you’d know you were in Macy’s Herald Square, Bloomingdale’s 59th Street or Saks Fifth Avenue the moment I took the cover from your eyes.
Everything from the store layout to lighting, audio, visual merchandising and collateral material gives huge clues as to where you are. All of this is a retailer’s or brand’s point of view.
“Ask anyone what they like best about John Lewis and its odds-on they’ll pretty soon mention its exceptional customer service”
To be relevant, having a strong point of view is from my perspective non-negotiable. Struggling retailers may struggle for many reasons, but they will have one thing in common: failure to define their point of view.
A point of view is your declaration of identity to your customers. It is what your brand is all about. It’s the equivalent of a large sign that says: ‘come on in if you like sophisticated/quirky/modern/bargain (delete as applicable) goods, but walk on by if that is not what you want’.
Retailers can never be all things to all people. You don’t need every customer; you need the customers you are targeting for your business.
John Lewis, for example, has a strong point of view that is all about being ‘Never Knowingly Undersold’. Everyone also trusts the policy of Never Knowingly Undersold, fully understanding the fact that they will not pay more for a product at John Lewis than elsewhere. If it is more expensive, John Lewis will reduce its price. The founder, John Spedan Lewis, set this in motion in 1920 and it is just as relevant in 2017.
The department store chain has made customers its first priority and understands that the people reaching out to those customers are its staff on the front line: the employees are the company in the eyes of the customer. Thus, John Lewis empowers its staff to live the brand.
Not only do staff get a share of the profits and decision-making powers over the running of the company but they are also looked after with a number of exceptional staff perks and bonuses.
Ask anyone what they like best about John Lewis and its odds-on they’ll pretty soon mention its exceptional customer service. Everyone will have a story about how a partner (as staff members are called) has gone above and beyond and made their shopping experience exceptional.
“I read a great description of this strategy by business author and commentator Joe Calloway in his book Becoming a Category of One. He said no business should strive to be a leader in its category. It is far more effective to create a different category altogether and be the only one in it”
Elsewhere, stores such as Walmart, Asda, Aldi and Lidl have decided their distinction is pricing and never miss an opportunity to flag up their low prices or the good value of their merchandise. Their stores are a sea of marketing collateral declaring their special offers.
Meanwhile, Japanese brand Muji has taken the process route and everything it does, from the store layout to the fixtures to the checkout, is all about simplicity, humility, calmness and self-restraint. The chain, which sells no brands, prides itself on being anti-glitz, in a bid to appeal to those shoppers who are beyond buying brands because they value sustainability and fair trade.
I read a great description of this strategy by business author and commentator Joe Calloway in his book Becoming a Category of One. He said no business should strive to be a leader in its category. It is far more effective to create a different category altogether and be the only one in it.
That is, to me, a very powerful statement, and I went on to invite Joe to speak to my Group Conference when I was president of Saks. I was very keen that he got this message across. The way to get a retailer to the next level of performance is to create something so individual and so special that the customer seeking out such an experience would not dream of going anywhere else. Why would they?
A retail business that has a strong point of view has a clear sense of what it is. It doesn’t just define itself in terms of what it sells – whether that is food, designer handbags or homewares – but in terms of what that retail space or website means to customers.
“Having a distinctive point of view is what protects us all from an undignified race to the bottom price-wise”
Whether it is the composition of the merchandise assortment; the way the merchandise is presented; the quality of the fixtures, fittings and lighting; or the attentive, knowledgeable customer service, everything is dominated by the drive to further that point of view. The focus is never about simply driving the bottom line.
This is not to say that retailers need to be charitable and give it away, but simply that they know success comes out of understanding the greater purpose. That is what will drive the bottom line.
Having a distinctive point of view is what protects us all from an undignified race to the bottom price-wise. Think about it. As I have already noted, we live in highly competitive times. The high street is a busy place and there are hundreds and thousands of online stores, all vying for a slice of everyone’s cash. Money can easily become the prime consideration when choosing a product.
‘Oh, look, I can get it £10 cheaper at selleverythingcheap.com.’
On this basis, the only way to compete is for other retailers to cut their prices by £15 to get the business. Then, there will always be another shop that will go down by £18. Before you know it, prices are spiralling down at a dizzying rate and margins are cut to the bone, if indeed there is any margin left at all.
At issue here is a situation where customers only ever see retail outlets as a means to an end. A commodity. The obvious solution for any store is to rise out of this category and differentiate itself in such a clear and powerful way that customers feel compelled to shop there.
- Almost is Not Good Enough is available to order now, via Amazon, for £25.
All profits from sales of Almost Is Not Good Enough will go to The Prince’s Trust – Andrew Jennings is chairman of its Retail, Leisure and Hospitality Leadership Group.
Since its inception, the Trust has supported over 750,000 disadvantaged out of work young people to get their lives back on track. The Trust’s programmes give these vulnerable young people the practical and financial support needed to stabilise their lives, helping develop self-esteem and skills for work. Three in four young people supported by The Prince’s Trust move into work, education or training.
The Prince’s Trust was founded by HRH The Prince of Wales in 1976.
No comments yet