The pressures facing retailers continue to increase, with an emerging and increasingly polarised set of players.

The pressures facing retailers continue to increase, with an emerging and increasingly polarised set of players.

“The positive relationship from serving the customer well at Christmas is a reputational benefit that drives loyalty through the rest of the year.”

Eric Fergusson, eCommera head of retail services

For every John Lewis and House of Fraser, there is a Debenhams struggling in the wind. The winners and losers are not predefined, as Argos in particular has recently demonstrated, and this does spell hope for Debenhams. That said, the increasing intensity of these pressures does make switching path harder.

It is easy to forget that despite the positive economic growth numbers we are seeing that there is a backdrop of low and slowing inflation – driven in part by a very competitive retail market.

This reflects the Christmas troubles Debenhams saw when their rivals matched price promotions. The grocers and ecommerce marketplaces will continue to drive this, and if you are in a competing category, you will need to appraise how you position yourself.

Debenhams’ strategy of delivering value through promotions is likely only to only become a harder place to be.

Beyond this, Debenhams has yet to deliver the omnichannel features that matter at peak trading times:-

  • Rapid delivery options
  • Late-night last order
  • Quick click-and-collect

These features have supported and driven later and later Christmas sales peaks. When availability in store is unknown – particularly common at Christmas - click-and-collect guarantees the sale and footfall. Being able to offer this service late in the day is key.

This is not a challenge unique to Debenhams: we have seen and heard of many brand retailers seeing a drop-off in sales to department stores who could serve the late peak in customer demand. The positive relationship from serving the customer well at Christmas is a reputational benefit that drives loyalty through the rest of the year.

Beyond order management, using data will be Debenhams’ next challenge. We know first-hand how complicated this can be for department stores – the sheer breadth of information from range, to customers, to marketing, to stock management, can be very daunting.

We have seen successful department stores uncover significant volumes of stock in warehouses that is not available to sell online. We continue to uncover marketing campaigns that point to product that is out of stock, or has limited cover.

For promotion-heavy retailers, it can be hard to avoid too many different techniques being used, driving weak sales – and without sophisticated analytics, it can be very late before this is captured. Using data to do the basics better is key.

Beyond the basics, Debenhams need to appraise how they use data to personalise their service and experience to customers, how they use content to engage and sell the product and how to serve customers better across devices. These trends are still young and provide Debenhams with the opportunity to find the path to success once again.

One question for the market is whether the investors have the patience and pockets to support this, or whether instead they will look either to the East or to private equity to take up the baton.

  • Eric Fergusson, Head of Retail Services at eCommera