Retailing gone wrong. How can we prevent the collapse of yet another UK department store? Retail veteran and HOLM chairman Richard Burrell penned this excellent thought piece on what’s gone wrong and how to fix it. Find the long form piece here or enjoy this abridged tea break read.
From Orwell to House of Fraser
Mention George Orwell to most and they will probably come up with Animal Farm, 1984, or one of his other famous works. Less well known is his work as an essayist in the 1930s. In Inside the Whale, published in March 1940, Orwell uses the Bible story of Jonah and the Whale as a metaphor for the mute acceptance of one’s experience without making any effort to change it, taking a swipe at the pre-war government.
He points to the whale comfortably protecting Jonah from the perils of the outside world and distorting his ability to make decisions. Inside the whale Jonah has no idea if the sea is stormy or calm, whether it is day or night. His entire experience from which he makes decisions is shrunk to the small warm space inside the whale. All he can see is the whale.
What does this have to do with retailing?
In the last two years many pillars of UK retail have run into trouble as they try to cope in the digital world. The headlines tell us who has come to the end of the line. With more to come. Less visible, are those who are still profitable yet rapidly losing sales or margin. The management teams of these struggling retail behemoths find themselves in the position of Jonah himself. Shielded from the realities of their future by the surroundings of a still-profitable company. They are able to lull themselves into inaction or at best, slow iteration. Rarely innovation.
The writing has been on the wall for traditional department store retailers for many years. The intentions of companies like Amazon, Zalando and Alibaba have never been a secret. Yet each year their harpoons get sharper.
Orwell was addressing inaction on a much more catastrophic scale, but his message is simple: ignoring your problems will not make them go away, in fact it may make them worse. Sooner or later you will have to face them.
But what to do?
In a business the size of a Macy’s or a House of Fraser (and clearly Debenhams with this week’s announcement) the task must appear daunting. However, retailing is about remembering who pays the bills. It is not the tech wizards, shareholders, or ‘save the High Street’ campaigners. It is the customers who spend their money in our stores.
The customer has changed, they are much better informed and their expectations are much higher. Retailers must give the customer good reason to continue visiting and buying from the store. Picking up an online order doesn’t really count.
Escaping the whale
New store layouts and the addition of events and other attractions are certainly part of the solution, but retailing must also address the shopping and buying experience itself. It’s no good offering free coffee or a resident jazz band if none of the dresses look right or fit and the customer can’t find the ones that do. Taking payment quickly is efficient but it’s also at the end of the shopping journey. Surely a focus on ‘filling baskets’ justifies more investment? The required changes need to be radical – this means the store will not look the same. Just remember if it does, you’re still in the whale!
Digital technology, like a favourite sibling, has enjoyed years of investment online which is why it’s seen as a growing enemy by the other sibling: the ‘bricks and mortar’ store teams. In truth it can be the ally here. But temptation to solely use it to slash costs, support online inefficiencies and reduce human contact has missed the mark and created that divide. Much better to empower the store staff with a better level of knowledge and enthusiasm to help their digitally savvy customers rather than dumbing their jobs down. Self service works online. Yet self service in-store can leave you wondering why you didn’t buy online. Or is it me?
Innovative ‘Digital Styling’ services like HOLM’s can play a big part in creating a radical solution, that drives productivity for fashion retailing as well as landlords with vested interests. Yet there is no magic bullet. Retailers will have to get out of the whale and tackle the stormy seas around them for real. Preferably before they find themselves deposited on the beach of the administrator’s office.
By Richard Burrell, chairman HOLM