Sunday 13 July 2014

What is the right mix of retailers on the High Street?

I'm sitting on a High Street, looking at the range of shops and wondering if the mix of shops makes the difference in the vibrancy of any High Street or town centre.

Just in my line of vision, I see a food shop, shoe shop, pet shop, pound store, pharmacy, clothes shop and a variety store. Over the street is a coffee shop, an optician, a card shop, 2 fast food shops, a bookmakers and a charity shop. It's a good mix and with ample parking and safe places to cross the road, it's a vibrant area with places to spend, eat and just stop and watch the world go by. Slightly further in the same street are 2 supermarkets, another fast food shop, a car wash, a chain pub and a DIY store.

When High Streets and town centres grow up organically to have a collection of shops that attract a range of customers, then it just works.  It's when the free market doesn't provide this vibrancy that local planners and councils need to get involved.

So how does this happen?

When there is a high demand for commercial property, then planners can look at accepting or rejecting certain uses based on the mix they already have. Landlords can look at choosing a tenant based on the longevity if their tenure as a viable business and a degree of survival of the fittest occurs to ensure the very best retailers are present.

When it doesn't happen

But we haven't been in a situation as competitive as this for several years now, so landlords will be far less choosy in their tenants. At the start of the financial meltdown, commercial landlords would probably have taken anyone who could pay the rent.

So planners have to take the lead and provide planning rules that allow diverse retailers to a High Street without penalising the landlords. This is a fine line, and planning officers have generally been quite lenient in their criteria over the last 6 years or so.

I would strongly suggest that the criteria be clearly laid out and stuck to rigidly for every application. Filling a High Street with charity shops or discounters in a downturn isn't the only way out of the downturn.

People look for bargains, look for value but the days of buying things just because they are cheap has disappeared. Customers are savvier and want something that will do the job they've bought it for.




The new smartphone from Amazon - fire phone

Have the High Street banks changed since the meltdown?

Lord Adair Turner tells policymakers to be radical in their thinking, as he analyses the current financial climate and the danger of returning to the dark days of the economic meltdown. Although a little short on detail, his speech hits the right notes in terms of discussing what exactly has happened and where we have ended up with regards the financial crisis that hit at the end of the last decade.  I would ask 2 main questions with regards this-


  1. Has anything actually changed?
  2. Did anything actually need to change?
I say the answers are -

  1. Not really
  2. Definitely
So, where do we go from here?

I think that the banking system has come full circle from fear, through self-pity and survival mode to business as usual.  The wider economy doesn't need business as usual, as small business and consumers struggle to get finance for house purchases and find they are further disenfranchised by a system that they didn't help to create, didn't ask for and now feel disengaged from.  This has gone along with repossessions, liquidations and the rapid growth of the payday loan sector.

How can this happen after the major shocks of 2008 and the fact that governments own large stakes in banks?

We are on a course for a similar shockwave of financial crashes if there isn't a change in the structure of the banks, the way they interact with customers and an acknowledgement of the errors of the past.  A whole industry has popped up to make the most out of banks errors - mortgage exit fees, bank charges, PPI miss-selling, etc and this is before the exposure of self-certification mortgages, interest-only mortgages, fasttracking of mortgage clients and others.  Banks have been subsidising high spending on cars, holidays and home improvements by the £10+ billion payouts for PPI misselling alone.

There needs to be a line in the sand drawn by the banks to gain public trust again - or maybe this has gone on too long and can never be repaired.  The public appetitie for payday loans seems to never be satisfied, so why not a Wonga Bank on the High Street?  A series of new entrants to the market that aren't tainted by the scandals of the past may be the only way forward.  Metro Bank is making progress in London, while Virgin Money seems to have escaped the association with Northern Rock.  Nationwide came out of the scandals with an enhanced reputation, as did First Direct.  M&S and Tesco are starting to offer a serious proposition in terms of everyday banking.

Is this the way forward?





The new smartphone from Amazon - fire phone

Friday 11 July 2014

Shop Local is more than just a slogan

Why don't customers in all walks of life choose smaller, independently-owned local businesses to interact with?

Why would you get your coffee fix from a national homogenised chain when there's a local alternative available?

Local companies employ local people, are run by local people who then spend their income locally.  International companies funnel income away from your local area (often in tax avoidance schemes that deprive the UK Treasury of much-needed tax income.). The ethics of major banks, retailers and hospitality companies is regularly brought into question by their mis-selling, corporate governance and tax affairs - so why go global when you can go local?

I would urge all local independent retailers to push this fact in your marketing.

If you are local, live local, send your kids to a local school, spend locally, pay local council tax then you already have an emotional link to the area you are selling your products in and have an empathic link to your local buyers.  You must use this link to forge links with other local businesses and the larger local community.

I would suggest that you source your products from local suppliers wherever possible. If you can supply from your local community then the connection you have with your local community will be much stronger.

Tuesday 8 July 2014

Can you survive without promotions or sales?

  As retailers, we work on tight margins for large parts of the year.

The time to refresh and clear out old stock comes in the sales. Traditionally an annual event, this had been pushed into 2,3 or 4 times a year, mainly by fashion retakes that want to cleanse their stockrooms of the last season's unsold items.

An alternative method, pushed by the supermarkets and beauty stores is the promotional period. Thick is where particular lines will be on a particular promotion, often BOGOF or 3 for 2.

The other, less used, method is to create a clearance section or stand in your store to rid yourself of lines that haven't sold, are short of date or you no longer stick.

Can you survive as a retailer without moving to sale, promotion or clearance?

I think that the ideal scenario would be to never have to end up with any of these situations, as your pricing strategy will determine the sales levels of your products.  Say you have a line available in 5 different colours, and 1 colour is being left behind. Well, a price drop would perhaps be a better way of selling that line through than clearance, or editing for the sales.

Some retailers rarely have a sale, some never use promotional periods, so what would be the way forward to become a retailer that stands on your own merits? Would being respected enough to have your products bought at full price all year round be desirable?

I say "yes."

And I point to independent local retailers as both the answer and the solution to this. A strong local retailer that satisfies a local demand by producing or sourcing products that people need at an attainable price should have no need for promotions of sales, but could strike deals with individual customers.

"I'll buy 2 if you knock £10 off the price"

This is a better way for an independent retailer to do business than to sale or promotion their way through stock.

There is another solution that I have mentioned regularly in my blogs - Click & Collect, where you open up your range to internet buyers and have the item ready to collect in your store.  This opens up the potential buyers, and can be used to sell nationally or overseas if the shipping costs are not too burdensome. This increases sales and allows you to clear your range more quickly.