The tendency to over-complicate retailing is holding it back, says Lord Kirkham

When I sold the DFS Furniture business to Advent International in June 2010 the new owners did me a great favour by inserting the usual covenant prohibiting my investment in a competing business for a while. Consequently my inevitable focus was on scores of companies well outside the upholstered furniture sector.

I discovered concepts I often knew precious little about, including health clubs in Eastern Europe, self-storage centres in the UK, clothing for dogs and a plethora of web offerings. I met bonkers bankers, aggressive agents, optimistic owners, desperate directors and some great guys.

I visited modern, shiny head offices and headquarters located in broom cupboards and briefcases.

I toured stores and outlets, factories, home workers’ houses and buzzing call centres. My bedside reading included due diligence reports, fairytale projections and imaginative accounts.

It was torture of gargantuan proportions, a bit like a night out with Ed Balls and François Hollande. But what an education.

Sadly, I report the frightening fact that many businesses operating in the UK today do not recognise the vital need and importance of making and growing sustainable profits. And if any have ever encountered the profound ‘Keep It Simple’ (KIS) philosophy, few are effective practitioners.

“KIS is a golden rule. In a marketplace already complicated by the web, bureaucracy and an ageing consumer base, it is madness writ large to add to the confusion with more complexity.”

It is impossible not to conclude that many professional managers in retail over-analyse, over-complicate and are far too clever for their own good. They unintentionally create sales avoidance departments and procedures that make it tough for the customer to shop, but a doddle for staff to make mistakes.

KIS is a golden rule. In a marketplace already complicated by the web, bureaucracy and an ageing consumer base, it is madness writ large to add to the confusion with more complexity.

Retailing profitably in the simplest KIS terms is little more than buying cheap (low) - selling dear (high) and containing operational costs, thereby making profits in cash to reinvest in more of the same.

The monster challenge is how to convince our supplier partners to provide us consistently with a quality product, delivered on time, at a low price that still enables them to remain in business. With this comes the equally monumental challenge of persuading our customers to support us in volume, long-term, happily pay a premium price, be a repeat purchaser and refer their friends.

Efficiently running the business and containing operational costs is easiest, usually achieved through focused hard work, proven principles and best practice implemented by professional operators appropriately incentivised, monitored, motivated and supervised.

As for buying low, the enlightened seem to buy exceptionally well by supporting their suppliers through thick and thin, paying accounts in full and promptly, working as partners to develop and innovate products, sharing expertise and recognising the importance of goodwill.

Selling high and in volume is a manifestation of the retailer’s talent, and requires innovative and exclusive products, attractive packaging and display, effective marketing, sales skills and excellent service.

Applied KIS philosophy cuts down demoralising, costly, growth-inhibiting and time-consuming errors. Retain your sanity, assure success - Keep It Simple.