Kate Bostock’s abrupt departure from Asos, following on from John Browett’s short stay at Apple, highlights how fast retail is changing.
Kate Bostock’s abrupt departure from Asos, following on from John Browett’s short stay at Apple, highlights how fast retail is changing. It already seems like ancient history when big-box retailing was perceived as the panacea of global retail domination and was enthusiastically embraced by Ahold, Carrefour, Tesco, Walmart etc, and was the rationale behind the ill-fated 1998 Kingfisher bid for Asda.
Contrast today the speed with which Carrefour is exiting territories, while the ‘holy grail’ of large space is becoming an expensive luxury.
The speed of change must ring alarm bells for all those ‘legacy’ retailers embarking on massive capital spending programmes in order to ‘catch up’. The target should be reinvention, leaping ahead rather than replicating what your more fleet-footed competitors have already done.
A role model is Sainsbury’s, which had been perceived to be disadvantaged by its traditional food-focused offer in supermarkets averaging about 34,000 sq ft. It did not have the space to develop a credible non-food offer, yet in September it has a marketing relaunch of its Tu clothing brand in 395 stores.
With sales approaching £700m, it is the eighth largest UK womenswear brand by volume (14th by value). Could JS emulate Joe Fresh, Loblaw’s clothing brand, which has opened a solus store at 510 Fifth Avenue in New York?
The most interesting space battleground at present is convenience stores. UK convenience stores are essentially scaled down versions of the standard supermarket model, whereas in the Far East and the US in particular they reflect local needs and offer genuine convenience, not only in terms of services but the multiplicity of shopping trips - breakfast, lunch, dinner, snacks and ‘top-up’ visits.
The competition is often not another convenience store but a coffee shop for breakfast, a sandwich shop for lunch and snacks, plus market traders. Personally, I question the extent to which convenience stores are synonymous with pre-packaged food and unhealthy eating. There are independents and market traders with fruit and vegetable offers, bakery selections and meals to go, which are far superior to the standard convenience store offer.
Now, I’m realistic enough not to be advocating the replication of Dean & DeLuca across the UK - the Whole Foods’ experience demonstrates that this is a step too far for the majority of British consumers, while supply chain realities and the high cost of space (rent and rates) dictate caution. Nevertheless, I do see a greater need for differentiation and experimentation in what is fast becoming a crowded space.
In particular, some injection of theatre and the vibrancy of street markets - why not open up store fronts, utilise the pavement (if only for a few tables and chairs), sublet some space at lunchtime to local independents with interesting meal offers.
This could all be part of the desperately needed revitalisation of our high streets and might even attract ‘Mary Portas money’. Could it mean that the perceived laggards in the convenience store race such as Morrisons and Lidl have a real opportunity to become tomorrow’s winners?
- John Richards, Retail Consultant, McQueen