Someone once told me that one can either complain because rose bushes have thorns or rejoice because thorns have roses. It’s all about perspective.
The other day I was listening to a radio interview with Malaysian entrepreneur and founder of budget airline Air Asia, Tony Fernandes.
When he set up Air Asia, only 6% of Malaysians, 2% of Thais and 1% of Indonesians flew.
You could argue that setting up an airline in a region where hardly anyone had ever flown before would be a terrible idea – there’s just no market for it.
Or you could look at it another way and see the size of the opportunity, if only they could make it cheap enough so that millions of those non-flyers could afford to buy a ticket.
Which is what they did: last year they flew 57 million people to 109 destinations across 18 countries, turned over £1.2bn and were voted the world’s best low-cost airline.
Ups and downs
Next recently reported third-quarter growth in total sales. Retail sales were down but online sales were significantly up.
The majority of retail analysts decided that this was a disaster for retailers everywhere and millions of pounds were wiped off the value of Next and other prominent retailers.
Further proof, they concluded, that retail is “going to hell in an empty shopping basket”.
“It would be interesting to see how buying patterns and net margins might change if in addition to free click-and-collect, customers were given, say, 10% off all orders bought, collected or returned in-store”
Alternatively, you could make a case that Next’s growth in sales, in a turbulent market and against the backdrop of rising costs and prices as a consequence of the post-referendum currency adjustment, showed the resilience of its business and its management team.
I’m convinced that we’ll find a happy equilibrium between the high street and online shopping, and in doing so we’ll enhance both experiences for our customers.
In fact, I can envisage a time when the relationship between the two sales channels will become more symbiotic.
When the pressure comes to squeeze more margin from online sales, a light will be shone on the costs and inefficiencies of home deliveries and the subsequent refunds and exchanges.
It would be interesting to see how buying patterns and net margins might change if in addition to free click-and-collect, customers were given, say, 10% off all orders bought, collected or returned in-store.
If we assume that going into our stores is a richer customer experience – a chance to see, touch and try new products and to be charmed, advised and upsold by our store staff – then time spent in-store will not only increase ATV but will also help grow the lifetime customer value that results from great customer/staff interaction.
The naysayers don’t all work as retail analysts, though. The media narrative that surrounds the ongoing Brexit negotiations and the business case put forward for a softer Brexit is almost exclusively couched in the negative:
“I think we’d all welcome a change in tone, not least because it’ll help boost consumer confidence”
“If we don’t have access to workers from Europe we won’t have anyone to run our stores or our warehouses”. Or – “If we don’t maintain the current border agreements, our stock will rot in the docks.”
Very rarely is the argument presented in the positive:
“The brilliant thing about being in the EU is that we’re able to employ bright, multilingual staff, with enough get-up-and-go to leave their home countries to come and work for world-class retail businesses.”
Or – “The great thing about frictionless borders and speedy custom clearance is that the sooner it’s in our stores, the quicker we can sell it – more speed, higher sales.”
I think we’d all welcome a change in tone, not least because it’ll help boost consumer confidence.
We should also rejoice that despite a sometimes thorny relationship, the benefits of EU membership have seen business blossom and bloom.
Jacqueline Gold is chief executive at Ann Summers