Westfield’s latest gigamall has been open for a full week, and with the initial surge of retail CEOs and business journalists subsiding, we visited yesterday.
As you will have read, it’s vast, with three full storeys of stores on a banana-shaped axis, with a series of spurs and an open-air mall creating some sort of circuit. However, the layout is far from the “box” pattern of Westfield’s White City mall, and we reckoned customers are more likely to traverse the banana, change levels and come back again, than explore the byways, as currently configured.
With 300 shops and 70 restaurants, a single visit – even a five hour slog – only allows you to scratch the surface of what’s on offer. Much of the coverage so far has concentrated on the big fashion flagships on the First Floor. The fit-out and confidence of Next and Forever 21 are most impressive; however, my colleague and I focused on the sectors that most interested us.
Westfield is clearly zoned, with smaller stores on the Lower Ground level providing a variety of services; accessories and mixed fashion on Ground; and high fashion on top, as noted above. So let’s take a look at the Lower Ground.
If you come by train or tube, this is where you arrive, and a peachier location for a Starbucks is hard to imagine. The store is light, bright and comfortable, using natural materials in place of the traditional lashings of terracotta paint. Some of the comfort might have to be sacrificed in favour of more seating, but the three tills and six service staff were busy and cheerful. A good meeting point, and a strong start to any visit. With outward-facing seating, this is an excellent people-watching venue.
And the people we watched appeared to be overwhelmingly local on Monday morning. You don’t have to be wealthy to shop at Westfield – this theatre of dreams showcases mostly high street brands, including a vast Primark, and the bargaintastic Deichman Shoes. High-end brands are here in force, of course, but there is no space equivalent to The Village at White City. It’ll be interesting to see how the clientele balances out as the scheme matures, but, as others have commented, it’ll be hard to assess the real success of the scheme until the spring of 2013, when the Olympics are a memory and a second Christmas has delivered like-for-like data.
Right, back to the stores. Immediately opposite Starbucks, tucked in next to Eat, is WH Smith, which had to win the Worst Merchandised Store accolade. Appearing almost deliberately contrarian, WHS has opted for a cheap, “hospital convenience store” shopfit. The magazine section was incomplete, the book offer was thin, and the rear of this small, wedge-shaped store appeared to have been ransacked by shoplifters, with minimal recovery, confusing merchandising and gaping empty spaces. Staff were confined to the tills, and some of the ranging (the emphasis on CD-Rs, CD carrying cases etc) appeared to be distinctly last decade. Compared to Smith’s confident store at White City, this was a disappointment. It’s also only about half the size of the existing WHS store in the old Stratford Shopping Centre, which suggests that smaller Smith stores are here to stay.
After that, things improved, as we entered the Land of the Tech/Phone Shops. The biggest statement was the most confusing – the Currys/PC World “Black” store. This is an important strand of Dixons’ business realignment (in essence, doing what everybody in this sector has to do, and compete, somehow/anyhow, with Apple), but the message is a muddled one. Is this a Currys store, where I go for washing machines? Or is it a PC World store, where I browse the wonders of Packard Bell? It’s dual staffed with both brands’ uniforms in evidence; a helpful sales assistent tried to unravel the Black concept for me, stressing that PC World had a great reputation for laptops (I’ll grant, they’re a go-to location), and that Currys was equally well-known for cameras (this had passed me by). Staff at the Black store would offer advice on selection and set-up, but wouldn’t be delivering that legendary Dixons hard sell.
Gazing around at the thousands of SKUs, I was reminded of a comment by Graham Bishop in Retail Week. This recognised that:
Customers have more information on hand than sales staff [having arrived at the store after fully researching their choices online], and often have killer questions that they open with to test staff to see if they are worth talking to. [The future will consist of]… less stores, and a different role for the people manning them.
This seems spot-on to me. It simply isn’t possible for sales staff to understand the menus and functions of hundreds of different PCs, laptops, tablets, phones, sat-navs, cameras, MP3 players, hi-fis, TVs and all the rest. The only people who can pull this off are Apple, who essentially only offer five products: the iPod, the iPhone, the iPad, the MacBook, and the iMac. These come in various sizes and capacities, but mastering five products that essentially reflect identical Jobsian logic, is doable, whereas being able to comment authoritatively on the whole market is just impossible.
Instead of using the technology simply to sell itself, it needs to be harnessed to provide a proper features-and-benefits, compare-and-contrast service. This could clarify the conflicts that the consumer has to resolve between functions, price/value, and style; it may mean that some manufacturers have to fight harder for sales floor space, but it would enable the savvy shopper to review what the store is selling intuitively, rather than being blinded by hundreds of matchbox-sized cameras or goofy docking stations.
Confusingly, three brands – Currys, PC World and Black – aren’t enough. Although Dixons (the most obvious moniker) remains on the subs bench, the store is also majoring on Knowhow, which has its own, separate look and feel. This is a bit of a Geek Squad me-too, but the “rainbow button” logo is strong, and a convincing store could be built around this principle, which would be far more appropriate than the very middle-aged Currys and PC World brands.
On, to Everything Everywhere. This not-very-full store was in the heart of phoneland, with Phones4U, O2, Virgin Media all in spitting distance, and it brings together the funky Orange and prosaic T-Mobile brands into a not-very-exciting whole. This was a pity, as Orange has created some exciting stores in the past, and is the most consistently imaginative of the major brand network providers. The Westfield store felt very generic, despite its spaciousness and good service; you can’t help but feel that ditching one of the consumer brands would be wiser than trying pretend that two brands can deliver the same service more effectively than one. Otherwise, aren’t we going to get lost in Austin Cambridge/Morris Oxford territory?
The Vodafone store has yet to open, but Carphone was trading, out of a relatively small and conservative space. We got a distinct sense that Carphone might be mislaying its mojo, with a cautious and tight selection of phones and tablets.
Now, it should be emphasised that the service we experienced in all of these stores was excellent, and stayed helpful and engaged after it had become clear that we were retail watchers with no purchase intentions. Nevertheless, life in the basement of Westfield is tough, where phone shop fights phone shop for superiority. Only one brand rises above the fray…
London is full of Apple stores, and the Westfield store had no new products on offer. However, around one hundred Blueshirts were in constant motion, exciting their customers with their zeal and commitment to the world’s most successful consumer brand. It’s not for Apple to slum it in the bowels of the mall, jousting with the other tech providers. Apple is for everyone, and sits alongside Hollister and Zara in primo prime pitch on the First Floor. As I’ve already observed, the product range is deliberately limited, so the cathedral of tech can provide dozens of functioning examples of each piece of kit, instead of the one or two that other stores can offer. Despite the crowds, despite the absence of an exciting shopfit or indeed any memorable distinguishing features, this is the shop that delivers what the customers want. What’s retail success about? Product + service? Check.
And that’s long enough for one blog, but there’ll be more to follow, including a stellar M&S and a surprisingly disappointing JohnLewis. Watch this space……
“I think death is the most wonderful invention of life. It purges the system of these old models that are obsolete.”
Jobs on killing older companies: “That’s inevitably what happens. That’s why I think death is the most wonderful invention of life. It purges the system of these old models that are obsolete. I think that’s one of Apple’s challenges, really. When two young people walk in with the next thing, are we going to embrace it and say this is fantastic? Are we going to be willing to drop our models, or are we going to explain it away? I think we’ll do better, because we’re completely aware of it and we make it a priority.”
Steve Jobs’ Playboy interview, 1985
I’ve spent the last couple of days at the London Book Fair, renewing old friendships, making new ones and hopefully getting some pointers towards business opportunities for the future.
The “London Fair Dealer” is a publication created by Publishers Weekly and BookBrunch, who kindly asked me for a short piece summing up my view of the future. This was duly despatched in mid-March, and I have reprinted it below.
I’ll follow up with a few thoughts and reflections on LBF itself in the course of the next couple of days.
An Evolutionary Phase
Philip Downer looks at how bookselling is evolving in the face of increasing online sales and digital publishing.
This year’s London Book Fair is taking place at a time of unique change. The shift from the printed word to the downloaded text is accelerating; chains and standalone bookstores are closing down around the world; and the very future of the book “entity” is being challenged by commentators and industry sages.
It’s the worst time to try and predict the future – but despite this uncertainty, the trade is not without optimism. The future will be different, exciting and full of opportunity – if only we could be certain what those opportunities will be.
We can, however, be reasonably certain that, while the market for eBooks (and eContent in all its forms) will grow exponentially, the demand for classically published books will not collapse as radically as the markets for CDs (or for road atlases or software manuals). The market will find room for both formats, with a different physical/digital weighting in each category. However, I would expect the value of the physical book market to shrink by 30%+ over the next five years.
So, where will these physical books be bought? The biggest risk is to the traditional, deep range specialist stores. As new channels (the usual suspects, online and supermarkets) took their share of sales through the mid-late noughties, it became progressively more difficult for store chains to maintain an economically viable backlist that met customers’ general needs. With the supermarkets taking a larger slice of the best-sellers, and the internet mopping up the long tail, the bookshops’ range became more and more piebald, and too many retail execs started to describe backlist as “wallpaper”.
This doesn’t presage the “death of the bookshop”; rather, I anticipate an evolutionary phase, as we pass from big, general stores to more specialised outlets. In capital cities and college towns, good bookstores can flourish, thanks to the profile and concentration of the population – but it will be easier to make a living servicing the 100,000 people of Cambridge than the 3.5m spread across metropolitan Birmingham.
The independent store that knows its customers, and has the right pitch in the right town, can survive. This is not an opportunity to get rich, however; independent booksellers will have to adapt their offer, and not be precious about the route they take, or the diversification they embrace. They’ll need an online presence, and a willingness to mix new and second-hand books, and other product categories.
In his recent AAP address, Len Riggio painted an uplifting picture of a future in which best-selling, mass-market titles had transferred substantially from physical to digital formats, causing the mass-merchants (ie supermarkets) to scale back their space and commitment to books. Although supermarket space is flexible (it would increase at Christmas), the limiting of this channel would be good news for specialist bookstores.
I believe that there are significant opportunities to sell more physical books out of non-traditional outlets. Stores like Urban Outfitters/Anthropologie, Conran Shop and the Royal Horticultural Society sell fluid ranges of the titles that their customers will want to buy this season, at a full mark-up. There is an opportunity for many more non-book retailers to participate in this space, selling desirable, giftable books (with content least susceptible to digitisation) at full margin to customers who are seeking to accessorise their homes and lives.
Similarly, while the range of children’s apps and content streams will continue to multiply, there is an untapped opportunity to create browsable children’s book offers – whether in focused, book-led stores, or as part of a broader kids offer.
Online sales of physical books will continue to grow. Recent research1 indicated that Amazon has about 80% of the UK’s online book sales – but no one can seriously participate in the book market without having an online solution. I would recommend avoiding the obvious frontlist-led offer in favour of a more distinctive editorial voice – but I recognise the cost of this commitment, and would advise booksellers to keep their online offer as simple and focused as possible.
At this early stage in the development of eBooks, we are shooting in the dark as we try to identify the ultimate size of the market, and to understand the channels those “books” will be sold through.
The music market is much further along this cycle than bookselling. The parallels are far from absolute – books are used in many different ways, and come in many different formats, whereas music is simply sound; fidelity vs portability. In the US, the paid-for recorded music market (including downloads) has shrunk dramatically, from $73 spend per head in 2000 to $26 per head in 2009 (at constant pricing).2 Record shops are on their last legs globally.
The music business imploded in slow-motion across a decade, with plenty of mis-steps and no prior experience to draw upon. Where has all the activity gone? In part, to illegal downloads. But absolute consumption has also fallen, simply and dramatically, as music consumers have found other ways to spend their time and money – gaming, phone apps and online gambling are three examples of entertainment categories that barely existed when recorded music was at its peak.
The book trade has a better opportunity to predict and shape its market evolution, and to plan accordingly. Various individual entities – publishers, Nielsen, B&N, Amazon, Apple etc – have some insight into the behaviour of download purchasers, but there is insufficient objective data in the public domain, and no consensus at this time on the shape of the download market, and the behaviour of customers.
The range of challenges within ePublishing is huge – pricing; formats; copyright control and piracy (particularly in the growth economies); “traditional” publishing vs self-publishing (the wave of stories about self-published Kindle millionaires has a whiff of dotcom bubble about it); marketing and the “browsing experience”; and the power and wealth of Apple, Google etc.
Nevertheless, bookselling has reinvented itself many times over recent decades – chains and superstores may, like book clubs, have had their day in the sun. The reinvention will continue. Publishing in the new world will be radically different – the changes will be greater and more global than those created by (say) the growth of paperbacks, the amalgamation of houses, or by the end of price maintenance. Redefining the nature of the book redefines the roles of both bookseller and publisher. I firmly believe that however future developments work out, there is a crucial role for both. Enjoy the Fair!
1. Institute of Direct Marketing research, reported in the Bookseller 9 March 2011: http://www.thebookseller.com/news/amazon-has-80-online-share-claims-new-survey.html?utm_source=twitterfeed&utm_medium=twitter
2. Business Insider 18 February 2011: The REAL death of the Music Industry: http://www.businessinsider.com/these-charts-explain-the-real-death-of-the-music-industry-2011-2