Category: Articles


Retail Armageddon or Alignment? The Customer Will Decide

22nd August 2018
large retail store woman checking labels

It may be the understatement of the year to say that retail is a difficult place to be right now. Many retailers are having to close stores or go through a Company Voluntary Arrangement (CVA). Some well-known names have even gone out of business, including Toys R’ UsMaplin, and Children’s World (Mothercare).

However, I don’t see this as ‘Retail Armageddon’ (a term that is currently doing the rounds). It is, in my opinion, an over-reaction to what we’ve known about for some time; more and more consumers are buying online. I’d describe what we’re experiencing as a ‘realignment’ of businesses to meet the changing needs of consumers.

Consumers are now multichannel shoppers, buying both online and offline. Yes, many established multichannel retailers may well have too many physical stores. However, stores still play a big role in order fulfilment as increasing numbers of customers choose to click and collect.

The bar of customer expectation has been raised to an extremely high level by disruptive brands such as AmazonASOSWiggle etc., leaving traditional multichannel retailers struggling to keep up. These disruptors have implemented market-leading logistic propositions. For example, in major conurbations, such as London, Amazon enables consumers to have their orders delivered within an hour. Convenience has been taken to new levels, empowering customers in the process. Amazon actually employs a ‘Bar Raiser’ who is responsible for challenging all internal projects to ensure they deliver the best they can for customers.


Retail is not alone in facing this challenge…


Car Sellers

Think about the experience of buying a car. Why are car dealerships mainly out of town? They’re not exactly convenient to get to – and what if you don’t have a car, to begin with? When it comes to being offered a deal, it can be common to feel as though you are being ‘ripped off’ and over-sold to. From personal experiences of buying cars over the years with my wife, I have witnessed first-hand how the experience can also be a patronising one for women, who too often are made to feel less knowledgeable on all things car-related.

Buying a car is the third biggest purchase you can make after buying a house and getting married. Why is it, then, that car dealers don’t attempt to maintain a relationship with their customers and build Lifetime Value?

There is a clear customer lifecycle to manage. Most cars are bought on a contract, yet it is common not to hear from the dealer before the contract is up. At most, if you’ve purchased a high-end car, you may receive a magazine in the post or an invite to a track day.

But if a customer has already purchased a car from the dealer, does that not potentially present an opportunity to sell another car to their partner, children and/or parents?

This is where we’ve seen brands such as Tesla and Jaguar Land Rover disintermediating and going directly to the consumer, by opening ‘car stores’ in more convenient locations such as shopping malls.

Public Transport

There are often problems with public transport, be it buses or trains not running on time, or only going from one pre-determined destination at a scheduled time, to another.

Our Bus in New Jersey, US, is changing that. The company has created a position whereby buses go from point to point, hence getting there quicker, and if a customer can get 90 people to sign up for a new route that they have requested, they will receive free travel for life.

The buses are clean, have free wi-fi, and charging points for electrical devices. This is a perfect example of a business that recognises the points of friction within an industry, and works to improve the experience for their customers.


Another sector that is ripe for ongoing disruption is banking. Banks are traditionally open at hours inconvenient to customers, often opening at 09:15 and closing at 16:30, with limited access on the weekends.

Metro Bank is one of the key disruptors in this industry. Open early and closing late on weekdays, they’ve also extended their weekend opening hours and are located in places convenient for customers (retail parks, etc.).


What’s the moral of the story?

The retailers who will emerge from the current realignment of the high street successfully will be those who really understand what it means to put the customer first. They will empower their employees to put the customer at the heart of all they do; they will have the right insight, technology, processes and capabilities to deliver on customer promises and guarantees, and will lead by example to drive the cultural changes required to become a truly customer-centric organization.

They will do as Our Bus did and walk through the customer journey examining all the touch points in order to determine how they could improve their proposition and make it easier for their customers to buy from them.

These businesses will also have a much greater focus on customer retention. Retailers currently focus almost exclusively on the top of the funnel, bringing new customers to the door. Too often, businesses end up putting in all their hard work and money on acquiring these customers, but then take customer loyalty for granted.

Loyalty is earned, and companies must work hard to keep on earning it. As the saying goes, a customer is for life, not just for Christmas! Retailers who survive and thrive will be those who put the customer at the heart of what they do.


This article was first published by Kogan Page on 16th August 2018. Read it again here.



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Culture eats strategy for breakfast

28th July 2018
four people watching on white MacBook on top of glass-top table

Does your business spend more time thinking about its strategy or its culture? I’m fairly sure that in most cases, the focus is on strategy. The culture of the company is often forgotten about when it’s one of the key building blocks for success.

But, as the great Peter Drucker said, “Culture eats strategy for breakfast!”  A strategy cannot be implemented successfully if the culture of the business is not appropriate.


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Retailers must put customers in the driving seat

1st June 2018
woman in driving seat holding steering wheel sitting inside car

We all know retail is a difficult place to be right now. Consumer expectations have been raised to an extremely high level by disruptive brands such as Amazon, Asos and Wiggle et al.

Traditional multichannel retailers are struggling to keep up. And retail is not alone in facing this challenge.

Think about the experience of buying a car.


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Alibaba – Take a look. You might like what you see

10th December 2017
alibaba cartoon

I’m sure like me, most of you find China a bit of an enigma. Therefore, you probably also don’t really know what Alibaba is all about. Neither did I until I recently had the privilege to attend Singles’ Day or 11/11 as it’s known locally (now, re-branded as the ‘global shopping festival’). With over 140,000 brands, of which 100,000 are international brands, and with $25.4 billion of sales from over 200 countries (in one-day), I think that’s an appropriate title.

I previously thought Alibaba was a Titan who would disrupt retail and potentially destroy lots of established retailers. I fundamentally got that wrong.


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Every retailer needs a strategy for Amazon

27th August 2017
amazon being accessed through smartphone

Amazon: co-operate or compete?

I’m a Practicologist, and while I’m not a soothsayer, I do have a reasonably good idea of what’s coming down the track.

This last paragraph of my Retail Week column from October 2013 predicted fairly accurately how Amazon would begin to colonise retail:

“A move into multichannel retailing is highly probable, with bricks-and-mortar to enable its customers to ‘choose how they shop’… It has incredible opportunities to scale its business and remains a serious threat to a large number of established multichannel retailers.”

Since then, Amazon has begun to establish a physical presence with book stores, Amazon Fresh, its acquisition of Wholefoods and Amazon Go; in addition to same-day delivery.

This trend is only going to accelerate. So how should you respond?


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Social media is about fast customer service, not just chat

10th June 2017
three people using social media on train platform

The “feedback” British Airways’ customers have recently provided via social media, and the airline’s largely inadequate responses, remind me of how big businesses can still get social very wrong.

Too many consumer-focused businesses treat social as a tactical engagement channel. It should actually be a pillar of their customer engagement strategy. Here’s my thoughts on where they are going wrong, and what needs to change.


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Time to trade in the ‘Great Mall of China’

25th March 2017
shopping market in china at night

Brexit, the fear of a declining domestic market and Amazon’s impending move into Australia are just some of the factors driving China market entry to the top of retailers’ wishlists.

I’ve recently returned from a trip to Hong Kong and mainland China; and as the market there is moving so quickly, I thought it was worth providing a round-up of some up-to-date market statistics.

The dominant Tmall marketplace should still be the first channel for any brand wanting reach and exposure in China, with around 56% of the total market. (around 22% of the market) should also be considered, along with a direct online offer in China, to reinforce the brand proposition.

Historically, direct to consumer (D2C) has been more of a brand play than a significant revenue driver, but is now a serious opportunity. And WeChat is the game-changer for that. Nearly 72% of all online sales in China are via mobile, says eMarketer.

Margins have been a challenge, as marketplaces have generally been discount driven. However, trustworthiness and customer service are becoming more important.

52% of Chinese consumers say they are loyal to companies with excellent customer support, compared to 44% who are swayed by special promotions, according to recent KPMG research. And the Chinese Government has cracked down on counterfeit products to prop up local market confidence in buying products domestically.

There are several key trading peaks in online. Singles Day is the most well-known, and the single biggest online trading day in China, generating $17.8 billion sales in 2016 (bigger than Brazil’s projected ecommerce sales for the whole of 2016). 82% of the sales were made on a mobile device, and 27% of sales were with international brands.

Double 12 Day is another big ecommerce day, and the Autumn moon festival in mid-September is another important holiday for small gift giving.

Propensity to buy online is higher in China than the West. 49% of Chinese consumers have purchased products online at least two to three times in the past 12 months, compared to 31% in Western Europe and 32% in the US.

In contrast to the West, food and grocery is one of the most popular categories of products purchased online. Women’s apparel, electronics and men’s apparel all also have relatively high online penetration rates.

Chinese consumers are heavily influenced by their peers (and key opinion leaders) with 22.2% buying a product their friend owns, compared to 8.2% in the UK. They are three times more likely to share a review or opinion about an online purchase compared to UK consumers.

Payment barriers are coming down too. Chinese consumers are less concerned about cash on delivery, with only 9.7% preferring this method in 2016 compared to 22.1% in 2015. Credit cards are the top payment method at 78.8%, followed by Alipay at 72.2%. WeChat at 34.6% is the leading mobile payment method.

Despite the challenges, the sheer scale of the market makes it worthwhile to test the opportunity. A client of Practicology sold more than a million pairs of sneakers on Singles Day alone!

And with 70% buying online because they trust global brands more than smaller or local brands, there may never have been a better time for UK retailers to add China to their roadmap.


This article was published by RetailWeek on 27th March 2017. Read it again here.

The article has also been reproduced on LinkedIn. Like and share it here.

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Investment rather than cost-cutting will help retailers navigate Brexit

7th February 2017
man cycling through black cabs in london

I have given lots of thought around the implications of BREXIT for retail and the strategic options available to retailers.

The most obvious options are as follows:

  • Batten the down the hatches – Put your head in the sand
  • Play the holding game – Wait and see what happens
  • Hold your nerve on prices – Maintain margins
  • Aggressively look to increase market share

The recent dip in consumer confidence suggests that this will manifest itself with suppressed demand in the domestic market. For those retailers playing the holding game, this will reinforce their approach of waiting to see what happens.

History tells us that retailers and brands that adopt a ‘wait-and-see’ or ‘holding pattern’ are often the ones who suffer a sometimes rapid decline. Think Nokia, Woolworths, HMV, Blockbuster, Kodak, Borders, BHS, Comet, Game Group or Clinton Cards. Of course, some of these brands have been revived by reinventing their customer value propositions and operating models.

I worry that retailers who take the wait-and-see approach could be the next ones on the casualty list.


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Engaging shoppers in the m-commerce world

20th January 2017
person using m-commerce

Retailers can prosper this year if they focus on the elements they can control, while running parallel streams of activity to drive their businesses forward.

It’s easy to become distracted in retail.

I’ve just returned from NRF’s Big Show in New York. From robots to artificial intelligence, Oculus Rift and virtual reality, one could easily lose perspective. (more…)

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