The death of the high street is a much-used term, but some bricks-and-mortar retailers are starting to pay the price for not inventing their own future.
And for thinking that change won’t happen to them or that their customers are too lazy or blinded by loyalty to not notice that better, quicker and cheaper alternatives exist.
The weakness not to cannibalise your own business, the paralysis that the fear of change creates, and the short-term focus on next quarter’s results are too often the drivers. And it is the staff of those businesses who will inevitably pay the price.
The opportunity and void created by this protectionist mentality will always be filled. It’s the way the world works and has always been thus – just ask King Canute.
“We can look back to Nokia not creating a smartphone until it was too late, or HMV not inventing iTunes in order to protect its stores”
We can look back to Nokia not creating a smartphone until it was too late, or HMV not inventing iTunes in order to protect its stores.
Woolworths paid a high price for its flawed offering and didn’t adopt the direct sourcing model in that sector that has been so emphatically embraced and executed by B&M.
Waitrose ironically had the vision to back Ocado in the risky early days, but then bailed out at least £5bn short of today’s value to go back to picking from a store, while more patience and long-term conviction would have filled most of the current pension hole for its partners.
Amazon is now the second-biggest employer in the US, with well over half a million staff.
More than 50 per cent of Amazon’s sales are now made via Marketplace, which has created an opening that didn’t exist before – a huge employment and entrepreneurial opportunity with a better distribution of wealth than a traditional big retail concentration.
Not On The High Street is doing a similar thing for niche businesses, enabling them to reach a national audience that they would otherwise not have access to. And value has clearly been created: customers love the bespoke personalised products and are more than happy to pay for them.
Meanwhile, the disruptors need people too. B&M has over 30,000 staff and approaching 1,000 UK stores. AO.com has nearly 3,000 employees; and Asos, having overtaken M&S on market cap, has over 4,000 high-quality roles at its headquarters in London, not to mention the thousands across the distribution network.
Asos is creating amazing jobs in the UK by exporting across the globe through innovation. At AO.com, we’ve launched a national business in Germany built on technology developed and maintained in the UK.
“Retail needs to take a long, hard look in the mirror”
Big retail has for a long time dominated the direction of consumer spend and leveraged that power over its supply base. The internet is a platform for democratisation of information, allowing customers a voice like never before with product and experience truths exposed so clearly through easily accessible, readable and shareable reviews.
Retail needs to take a long, hard look in the mirror. Retailers simply have to have a product and proposition that customers truly value, and a cost base and operation that make them competitive, compelling and capable of long-term profitability.
Price promises, knowingly oversold with exclusions and barriers to create friction for customers won’t be accepted forever. Colleagues that care and truly make the difference are inspired by leadership, vision and a culture they can be proud of.
I believe that only an obsession with customer experience, together with a concerted focus on investment in the people and technology that will deliver on that obsession, will work. In short, to do unto ourselves long before someone else does unto us.