There’s been an explosion of righteous anger directed at Amazon in the United States over the past week, following the launch of its one-day Price Check programme:
The gist of this – as you will already know – is that the Amazon customer pops into their local bricks-and-mortar retailer, chain or indie, scans the barcode and price of their desired product into their smartphone, pings this free sample of market research over to Amazon, and enjoys a discount on the product as a result.
From sea to shining sea, there has been an explosion of disgust from competing US retailers and commentators – although Amazon is only formalising and rewarding a long-entrenched consumer behaviour. The practice of “showrooming” – online consumers using brick shops as unpaid research and product testing facilities – is well established. As Jonathan Main of Crystal Palace’s Crow on the Hill bookshop tweeted last weekend:
ooh look, a pair of showrooming hipsters.It’s not a good look walking all the way around the shop with yr phone set to camera, book in hand.
However, Amazon has crossed a line by encouraging and rewarding this behaviour, and is suddenly under fire from US Senators, noted authors and others. Here’s a digest of opprobrium from the MobyLives blog, complete with a splendid suggestion that Amazon should pay an “affiliate fee” to the brick retailers from whose knowledge and curacy they’re benefitting. And here’s Richard Russo in the New York Times, reporting reactions from well-known authors – Stephen King, Scott Turow etc – to Amazon’s move, with less hysteria, and a more considered appreciation of what’s at stake.
Scott [Turow] reminds me what happened the last time someone stood up to Amazon. Nearly two years ago, the Macmillan publishing group adopted a new sales model that would cost Macmillan in the short run, but allow other companies to enter or remain in the e-book market without having to take a loss on every sale. Amazon’s response to more competition? They refused to sell not merely Macmillan’s e-books, but nearly every physical book Macmillan published. Amazon eventually backed down, but its initial response helped shape a widespread sense that it envisions a world in which there will be no other booksellers or publishers, a world where, history suggests, Amazon may not use its power benignly or for the benefit of literary culture.
And yet, and yet…
Amazon’s positioning is consistent – like Wal-Mart, their constant focus is on reducing prices and adding value for their customers, and all of their actions are directed at this goal. As Jeff Bezos pithily sums up: “There are two kinds of companies, those that work to try to charge more and those that work to charge less. We will be the second”.
Amazon discounts heavily, but doesn’t appear to its millions of customers to be an asset-stripping, cost-shredding retailer – its website and apps work like a dream, its web content is compendious, its eReader has defined the market, and its logistics are impeccable. Unless the customer has a vested interest in the status quo (in itself a suspect motivation), what’s not to like?
The Word magazine (tag line: “Intelligent Life on Planet Rock”) operates a busy blogging site, with hundreds of regular contributors who are literate, informed and witty. It’s been running a thread titled: How is the Kindle working out for everyone?, and the answer – almost unanimously – is, it’s working out brilliantly, thanks, and I’ll never buy another paperback as long as I live.
Amazon delivers what customers want, but for some profound psychological reason, this doesn’t appear to be enough for Amazon – a win somehow isn’t a real WIN unless the competition is left coughing up blood in the gutter. It holds its retail competitors, its suppliers, and the jurisdictions in which it trades, in barely disguised contempt. Because they don’t share Amazon’s absolute commitment to value for the customer, they are, ipso facto, incomprehensibly selfish and feeble.
So, for Jeff Bezos, there are two types of company. However, there is only one type of world. One in which we need to cooperate as well as compete, one in which our actions have a social cost as well as a fiscal value.
There’s a sense in which Amazon’s mantra is Tea Party Commerce – the only thing that matters is what’s good for the individual; on balance, the customer’s low price is worth any number of negative outcomes elsewhere in the value and quality chain. As author Tom Perrota puts it in Russo’s NYT piece:
People have to understand that their short-term decision to save a couple bucks undermines their long-term interest in their community and vital, real-life literary culture.
This is about much more than poor, lovely bookshops, and the whole “Bookstores–those holy, papery pockets of goodness and light” argument. Indeed, while book people will always be vocal and often small-c conservative/big-L liberal, books weren’t formally included in the Amazon Price-Check promotion at all.
Amazon provides individual consumers with a great-value, highly reliable solution to many of its shopping needs, and books are just a minority part of its commercial mix; there is every indication that it aspires to become the largest retailer in the world. However, Amazon is so pointedly committed to YOU, the Always Right, Always First, Individual Customer, YOU, that they create impoverishment elsewhere which perhaps YOU (the customer) haven’t considered, or might not be wholly comfortable with.
Now, we are on very shaky ground here, because I don’t want to imply that giving the customer a good deal is depriving manufacturers of their Bentleys, publishers of their corner offices, or brick retailers of an extra slice of toast for breakfast. And lecturing consumers on how to spend their limited personal budgets is at best sanctimonious, at worst just crass. There is, however, a broader cost to pursuing lowest prices and disregarding everything else, when the value to the consumer starts to deprive the broader community.
Mary Portas’s report High Street Review, commissioned by David Cameron, has been published today. You can read it here, and I’m going to withhold comment until I’ve digested both the report and the reaction over the next couple of days. In introducing the report, Portas has stated:
I don’t want to live in a Britain that doesn’t care about community. And I believe that our high streets are a really important part of pulling people together in a way that a supermarket or shopping mall, however convenient, however entertaining and however slick, just never can.
Our high streets can be lively, dynamic, exciting and social places that give a sense of belonging and trust to a community. I fundamentally believe that once we invest in and create social capital in the heart of our communities, the economic capital will follow.
Her argument is being framed as anti-out of town, but it is also implicitly anti-online.
Out-of-town shopping can certainly suck the life out of a town centre, if that centre isn’t pro-actively managed and repurposed. But local retail jobs will still exist (albeit fewer of them), and the retailers will still be paying their business rates to the local council, and their taxes to central government. The consumer is getting better value and convenience, but at the expense of a vibrant town centre. These things can be fixed. And most brick retailers, wherever they’re situated, will raise funds for charities, support local schools and sports clubs, and add something back into the community they serve.
The very best value for the individual consumer, however, comes from online retailers who eschew these niceties; who avoid paying sales taxes and corporation taxes by every legal means (typically relying on laws that pre-date the creation of the online channel), and whose contribution to charity, education, the arts or recreation, is negligible. Local retail employment vanishes, and both high street and retail park will in due course be tinned-up.
It isn’t the job of consumers to seek anything other than the best deal for themselves and their families; and constant change has been a factor for retailers since the first recognisably modern shops opened in the 18th century. But we are running the risk that, by saving ourselves money in the short term, we will become more impoverished, both financially and spiritually. Interesting times indeed.
Lord Kitchener: University of Bolton, data.bolton.ac.uk
Here’s a lovely true story I heard from a friend last week. He’d been shopping in one of the West End’s spiffier gents’ outfitters, and (the retail climate being what it is) things were a bit quiet instore. Indeed, he was the only customer in the shop.
He went unacknowledged at the front of the store, and headed off to another area to look at some jackets. He had a few hundred quid burning a hole in his pocket.
There was a clutch of staff behind the basement counter, but no one came forward, for they were all too busy. Busy discussing… the Mary Portas show they’d all watched on TV last night, and the extent to which they agreed (or disagreed) with her conclusions on the importance of good customer service.
My friend listened to their animated debate for a little while and then, feeling himself to be a supernumerary, cleared off to spend his cash elsewhere.
There’s a moral here somewhere…
I mentioned WH Smith’s continued walk-on-water results in my last post, with sales down and operating margins up, and I’ve started to worry that I might be obsessing about a single brand. However, on reflection, this is understandable – Smiths is the only retailer in the book sector whose current performance is visible to the public. Waterstone’s is now privately held, so it’ll join Foyle’s with Companies House filings only published many months after they cease to be relevant. And Amazon of course never breaks out UK performance, and reveals no more than it chooses to through its Luxembourg base.
We all know that WHS is no longer the serene multi-layered-management arm of the Imperial Civil Service that it once felt like. We can only speculate as to its market share in the critical Toblerone sub-sector. And as a well-known retail guru and government advisor observes on Twitter this morning:
@maryportas I truly hate WHSmith. Used to be a loved British biz & now a dump. Rush hour, 7.45am at Euston. One person on till. Queues. And shitty promos
But, spitting feathers aside, and noting obvious savings in staff costs, shop-fit etc, where is WHS’s continual margin gain coming from? With twenty minutes to kill in their new store at Westfield Stratford yesterday, I went strategy spotting.
One of the best ways to drive margin is through own-brand, and WHS continues to extend own-brand and unique stock throughout all its categories. WHS has always carried a sizeable slug of own-brand stationery and the like, but many of its categories are now dominated by own-brand to an unprecedented degree. Take calendars. There are multiple suppliers of wall calendars in the market. Some of them own valuable IP – eg Top Gear, The Simpsons – but a large proportion of the market is generic – kittens, landscapes etc. And WHS (at least in Westfield) no longer stocks generic calendars that aren’t own-brand. The opportunities to increase margin are significant.
Value publishing – creating attractive books to be sold at a lower-than-expected price – has been a staple of store chains like The Works for many years. It served us well at Borders, and WHS has always had a toe in the water, but its commitment to value publishing is now more substantial, and takes many forms. Value titles are no longer separated out, highlighted as “second-class” goods – they’re integrated into the main offer.
WHS is proving particularly adept at providing alternatives to current trends/titles – eg baking books to accompany the Great British Bake Off. This can be yours for a fiver:
Placed strategically close to the Guinness World Records dumpbin is a selection of similar facts’n’entertainment titles like “You Won’t Believe It But…”, “Gruesome Facts”, “Planet Earth” and so on. These are retailing for £5, half the price of Guinness (which in turn is nominally 50% off its £20 RRP, though I defy you to find any chain merchant selling it for over a tenner). WHS offers a cheap alternative to Guinness which isn’t as time-sensitive, and will earn a higher cash margin per unit sold than Guinness. Win-win.
Now, here’s an interesting offer – any two for £10 on over forty best-selling hardbacks.
That’s a great deal in today’s market, but it’s also a clever deal, recognising that WHS’s average customer isn’t a Bookseller subscriber or regular attendee at the London Book Fair. These are, for the most part, last year’s books (long available in paperback), or they’re illustrated publishing of the sort that The Book People specialise in – big print-runs on reliable topics, sold into specific outlets at low-low prices. Describing these books as “best-selling” is accurate – they certainly have been best-selling in their time, and with offers like these, perhaps Ant & Dec will sell better second time around…
Here’s another way to get mileage out of old books. On the new books table at the front of store, two hot biographies of major cultural figures, both best-sellers, but Keith Richards was published 12 months before Dickens/Tomalin:
The River Cottage Veg book is new, and appears to be selling at full price – though keeping up with stickering is hard work in this environment. (The Cheryl Cole at bottom right was published in September 2010, and is on a not-wholly-attractive “2 for £10 or £4.74 each” offer, if I’m reading that sticker right.)
The Keith Richards was a huge success last year, and representing it for Christmas 2011 works for everyone. At 70% off, it’s retailing for £6 – somewhat higher than a traditional remainder seller would price it, but excellent value nevertheless.
Elsewhere, WHS has bought heavily into what is essentially “Jamie Oliver’s Greatest Hits”, a collection featuring previously published recipes from all over Europe, priced to sell at £9.99. This is more heavily featured, and more cheaply priced than this season’s new Jamie – and as a recipe selection, it may well be more attractive to many customers. Given WHS’s stock commitment, a better cash margin also looks likely.
* * * * *
These are just a few examples, culled from a brief stroll around one store, but they underline WH Smith’s absolute commitment to creating a consumer offer that will drive the strongest possible margin. Lest this sounds merely blindingly obvious to any general retailer, this isn’t how a traditional bookshop works – stock selection is driven by frontlist publishing, and by the creation and maintenance of a diverse and credible backlist range. The bookseller will haggle with the publisher for margin and payment terms, marketing support etc, but their commitment to the “right” titles will limit their ability to grow margin.
What WH Smith has done is to free itself from the old dependence that retailers of copyright products (books, news/mags, music, movies, games etc) have on producers, by analysing what its customers want to buy, turning the screws on suppliers in exchange for exclusive deals and big buys, and generating large volumes of unique and own-brand stock across all categories, from bookazines to giftwrap.
I still share the general bogglement at Smiths’ ability to keep pulling off this trick, again and again – last month, Kate Swann announced that a further £11m-worth of savings had been identified across the business. And I wholly understand the dismay that Mary Portas and many others have in the current WH Smith store environment – these are no longer pleasant stores. (Younger readers, when I were a boy, WHS and John Lewis felt very similar to each other…) But WHS now has a much greater level of control over what they stock and sell. How all of this will fare if digital content takes over 50% of the book market (and the magazine market?) is hard to say, but as a survival strategy this looks more robust (if less attractive) than that of the old “stockholding bookshop”.
Somewhere in another part of the room, Downton Abbey was grinding along, and I looked up from my copy of Retail Week to note Hugh Bonneville observing that the war was over, and that everything might just not get back to normal.
It’s been three years since Lehman, RBS, Iceland and all the rest spread like an influenza epidemic across the planet. Few of us feel any safer or more secure than we were in October 2008, despite the trillions of dollars that have been poured into supporting banks and averting a major slump – and despite the necessity of most of those actions.
But, like Lord Grantham, we aren’t going back to normal, although it appears necessary for the political classes to suggest we might. We don’t believe them, but we all need to dream – just cut the deficit, overhaul social security, inject some unspecified vigour into the economy, try to ignore the pensions timebomb, and we’ll be back to the way we were .
We all know this isn’t going to happen, and George Osborne knows it, and he knows we know it too. The fall-out from the financial crisis runs alongside a rebalancing of world power, in favour of newer, stronger and not always wholly democratic nations, and it accompanies a revolution in the management and availability of information. The new normal isn’t going to be a return to anything like what we’ve seen before.
Retailers know this, because they are always the first to feel any shifts in consumer spending, and they’re the first to notice trends developing and old certainties evaporating. DSG has made a habit in recent years of announcing terminations – no more cassette players, no more cathode ray tube TVs – which garner column inches, but also remind us that nothing is forever, and this year’s big earner is next year’s forgotten fad.
There’s a big, covering-all-the-bases piece to be written about all of this, but a single example can also give us a point of focus. Mary Portas, who is heading up the government’s retail task force, has drawn some flack in the past week for suggesting that there may be too many charity shops on our high streets. The babble has drowned out her balancing remarks – not that charity shops should be penalised, but that the advantages they enjoy in terms of rates relief should be spread to other businesses – eg retail start-ups. This seems eminently sensible – privately, the charities know that they cannot thrive on otherwise dead streets, and that more charity shops drawing from a diminishing pool of donations will fail anyway. We aren’t replacing stuff like we used to, so (once we’ve emptied the self-storage and cleared the loft) we aren’t going to be donating like we used to either.
The legal and fiscal structures that support our high streets are outdated. Whether we are talking about planning laws, the powers of local councils (real powers, not just the enactment of statutory duties) vs those of central government, the attitudes of landlords, the expectations of consumers, and changes in demographics, everything assumes a growing retail sector within a buoyant economy, where successful businesses are fighting tooth and nail for leaseholds, and where rapacious consumers must be all but discouraged from spending. Why else would start-ups be discouraged, transport solutions so poor, landlord attitudes so hidebound and regulations so onerous?
The future high street is going to shrink, partly because of the shift to online shopping (which will continue), and partly because absolute per capita wealth will shrink, as my generation lives longer on enfeebled pensions, and today’s youngsters struggle with debt. We don’t know how this future will rebalance itself economically, but trying to preserve the high streets of the past, using the solutions and procedures of the past, will be inadequate.
The high street – as commercial centre, as meeting place, as community focus – has been an essential part of the human experience since the first traders, and high streets and markets exist in every culture. They aren’t going to go away. But a society as sophisticated as ours needs to find solutions to stop high streets from furring up and decaying, and in this (as in so many other things) it would behove government, councils and landlords to be a little bolder. Roll on, the Portas report.
Last week, Gateshead’s Metrocentre marked 25 years since its official opening in 1986. It was the first of the out-of-town megamalls that opened in the late 80s, followed by Merry Hill in Dudley, West Midlands (1989), and Lakeside (Thurrock) and Meadowhall (Sheffield) in 1990. Later arrivals included Cribbs Causeway outside Bristol, and Bluewater near Dartford.
These giant developments – typically supported by significant retail park space – were the climax of a busy decade of shopping centre construction. The out-of-town giants remain highly successful, and an important part of the retail landscape, but they came at the end of a building surge that was halted by the 1992 recession.
Of course, we’re seeing similar patterns today. With Westfield Stratford opened, there is little under construction at the moment – Trinity in Leeds, smaller schemes in the likes of Newbury. But not much. Development is, of course, cyclical, and completion tends to lag against the market. When the economy picks up again (crosses fingers), we’ll have to wait for a couple of years before developers are able to respond.
But what will they be responding to? Two news items have caught my eye this morning. The Daily Mail has a savvy business section, and reports today that “internet purchases of clothing and footwear are up by 21% compared to a year ago, which compares to a 2.1% fall for bricks and mortar outlets”. The Mail confirms that overall retail sales are now 10% online and rising.
Just to frighten ourselves into the weekend, let’s graph that change over ten years, assuming that the current split in fashion and footwear is 9:1, and that current trends continue unchanged. (They won’t. They may accelerate, and they may later slow down. But I’m seeking to provoke debate and activity, not complete an economics thesis.)
The other piece I was reading – and this is where we came in – is on the FSP Retail blog. This reminds us that, as all those 80s shopping centres approach their silver jubilees, all of their original 25-year leases will start – finally – to expire.
A 25 year, upward-only, retail lease. No wonder Retail Week’s subscribers talk about the UK having “the most anti-tenant commercial lease law in the world”. Of course, there are very few retailers who would sign a 25 year lease today, but there are plenty who are waiting for old leases to end, freeing them of onerous responsibilities, and allowing them to continue with the strategic reduction in selling space that the online environment necessitates.
This won’t impact the great regional centres that I named above – they’re well managed, regularly refurbished and repurposed, and exceptionally popular. But all of those infill schemes in secondary towns, with their cheap po-mo detailing, low ceilings, narrow shop units and second-rate parking – they are going to suffer. Voids (empty shops) will become more prolific, and some centres will close – a good “street” environment is usually preferable (and more flexible), compared to tight and compromised shopping centre space.
Mary Portas’s report on the high street is due to be released soon, and some of the leaked details are looking attractive – eg (as Tim Danaher reports this morning) giving start-up retailers the same business rate relief enjoyed by charity shops. But Portas has consistently observed that many town centres simply have too much retail space. The market may cause some developments to be reworked as residential or commercial space, or simply demolished and replaced, but councils up and down the country need to be thinking long, hard and long-term about how to secure their fragile town centres in a smartphone-enabled world.
Robert Peston, the BBC’s Business Editor and, judging from his output, a man who never sleeps, has written an interesting piece about the retail recession, which draws on ITEM/EY’s gloomy prognosis of ten fallow years, published a couple of days ago.
Peston’s argument is that the initial financial crash in 2008 caused a few high-profile retail failures (Woolworth etc), but that increases in benefits and tax credits kept households afloat through 2009-10. All this is now changing, however, as real income falls, inflation rises, the job market tightens, and state payments decrease. The high street has been through pain, but not real suffering – that is yet to come.
There is certainly no shortage of news on the high street. Peston’s Premise is borne out by the final collapse of Focus DIY – although there is some good news is that many of its stores are being taken over by more robust competitors. But companies and brands that aren’t best in sector, and that aren’t the consumer’s first choice, are going to strggle in the years ahead (notwithstanding the inevitable consumer pump-priming that will precede the next election in 2015). Look at the angst in the electricals sector – Kesa/Comet, DSG and Best Buy all have “issues”, and all are being steadily eroded by their online competitors. Changes will come.
Elsewhere on the rumbling volcano there are “Icarus” brands, who have experienced massive growth but who are now attracting questions. Superdry is under the analysts’ microscope, and no surprise, as its huge sales growth has been driven by a breathtaking store roll-out programme. It’s one of those odd brands, however – like Fat Face, it sells youthful clothes for older people, and the brand is now too ubiquitous to appeal to the genuinely trendy teens and twenties. I was in St Ives last month, and Superdry had one of the largest retail footprints in the town. Customers, however, were uniformly in their 30s and 40s, and these are the people whose wallets will be squeezed over the next couple of years. Building your business on a high level of store openings, trusting that central costs can be mitigated and growth assured, is not a great strategy – I know that from experience, and so do those behind Warner Bros Studio Stores, Dillons, Big W… etc etc.
If we’re going to have tough times ahead, consumers are going to be looking for value, but they’re going to want retailers they can rely on as well. We’ve moved on from the low-price fixation that benefited Primark so hugely (though pound shops etc will continue to prosper). The public now wants longer-term value – eg clothes they can wear more than once. They’re looking for reliability, quality in manufacture, and they’re looking for retailers and products they can trust.
This middle-ground is epitomised by John Lewis, M&S and Next – brands that will never be too exciting, but that have the value/quality/price proposition in balance. These companies are also viewed as being good corporate citizens – they play by the rules, they look after their staff, they pay their taxes. I think this last item is going to become a hotter issue in the months ahead – the lava is warming up, ready to break through the crust. There is a nice, long-running journalistic thread to be built out of companies that avoid UK taxes (note, avoid, not evade). If “we’re all in this together”, then Boots will have to prove that they are playing the role that the public expects; but as a PE investment, there is inevitably the risk of conflict with their investors’ goals. This could be profoundly damaging for Boots’ 150-year old credibility and trust – fairly or otherwise.
So, Rip-Off Britain could be back, but this time it’ll be about ripping off all of us (the “Big Society” – is anyone still talking about that?), rather than the individual consumer. This sort of headline sets the tone – and it’s in the quality press.
Gerald Ratner was on the TV last night, the only company boss so far to have the guts to speak for himself on Evan Davis’s clattery but compelling Business Nightmares show. 20 years on, he is still understandably bemused by the scope of his fall from grace – to have your family name turned into a noun synonymous with “cock-up” is hard to live down. Ratner today is honest and engaging; the point was made that his price-slashing showmanship was ideal for the go-go 80s, and completely wrong for the more austere early 90s. As the public mood entrenches and the true cost of the banking crisis comes home to households across the country, other retailers need to take care as they pick their way across the volcano.
Luckily, however, everything is going to be alright, as Mary Portas has been appointed to to carry out a government-backed review aimed at halting the “decline of the High Street” in England. This looks horribly like an Alan Sugar-type “eye-catching initiative” – doesn’t Stuart Rose have time on his hands at the moment? – and I hope that the review concentrates on accessibility, occupancy costs and online impact, rather than picking up on the horror show aspects of Portas’s C4 series. The good news is that the problem has been recognised by the government – let us hope that the celeb approach can do some good this time around.
Mary Portas’s Secret Shopper series ended on Channel 4 last night, and it left a rather odd taste in the mouth.
I’ve never worked with Portas – the closest I’ve got is onstage at a conference – so my views are based on the media persona, rather than the working consultant. She’s an acquired taste – in your face, shouty – but I like her honesty, I like her passion, and I liked the way those qualities translated on to the screen in her three BBC series, when she was still Queen of Shops.
In two of those BBC series, MP devoted a programme to individual stores, typically owner-managed and owner-invested. Fashion stores were advised on how to differentiate themselves from the chains; a broader range of stores (convenience, home decor etc) discovered their USPs and became exciting and different. In each programme, every aspect of the business was tackled – financial, product, brand/marketing. execution, service, motivation, environment. Stores were made-over, and turned into destinations customers would seek out.
The other BBC series focused on charity shops, and specifically the Save the Children store in Orpington. There was plenty of tough love for the elderly volunteers, but the result was a raised profile for charity shops, and an improved offer that will hopefully raise the standards, and thus the income, of charity retailers. It was a show from the heart, and compelling viewing.
Over to C4, and the whole premise has altered. Brusque, no-nonsense advice and careful development was replaced by one blunt message per show. In four programmes, Mary was going to fix four entire retail sectors!
Portas claimed to be “standing up for the customer” but I’m not sure how true this was. She picked her fights in cheap fashion, sofas, phones and estate agency. All of these have a poor customer service reputation, though I would argue that, at least in the first, this is accepted by the customer as the cost of cheap goods and fast convenience. (Which doesn’t excuse rudeness, but I think explains poor product knowledge, for instance.)
In all four programmes, shop assistants were pilloried, for being good at their jobs, or for being bad at their jobs. You drove sofa sales so hard you got a Rolex? We despise you. You don’t know anything about the mobile phones you’re selling? We despise you. This is Channel 4 bullying TV, victimisation masquerading as entertainment. In my experience, unless sales staff in stores are terminally uninterested, they do their best to deliver the message their bosses want.
Why the sofa hard sell? It’s what the boss wants. Why the phone hard sell? It’s what the boss wants. But the bosses were soft-pedalled when we visited their ranch-style homes or admired their bongos.
This is fundamentally unfair. Store staff respond to training, support, clarity of expectations, fair treatment. There is little evidence of them sticking around for long after they’ve been publicly lambasted.
Next, three of the four shows – sofas, phones and estate agents – covered testosterone-driven sectors where, like it or not, negotiation is the recognised route to the customer getting a deal. This inevitably creates a combative environment, very different to the charity shops and fashion boutiques of previous series.
Typically, a single solution was mooted to these stores’ perceived problems. Wacky changing rooms; a home design studio; a mini-Apple store; a better informed house viewing. Essentially, these recommendations – all admirable in their way – introduce softer qualities to a shopping experience, but they don’t eliminate the hard sell.
I started to wonder whether the increased sales that the focus stores enjoyed were a function of softening the customers’ expectations, and lessening their negotiating drive. These sofa people, phone people, were so nice that I was happy to pay full price. (I think that’s how the Apple Store works.)
And, does fixing one part of the equation also fix the rest? The estate agent now has command of the features and benefits of the property. But if they still dress like schoolboys and drive fairground Minis; if they do all the other things estate agents do like failing to return your calls, conflating bidding wars, running the wrong adverts in the wrong media, sitting you down in their grey offices to bully you into a deal… I’m sure none of those things happen in last night’s focus agency, but I still don’t see how fixing one element will mend the whole transaction. (Quite aside from the fact the estate agency has as much in common with utilities or insurance, style-wise, as it does with regular high street retail.)
A couple of thoughts on Fairness in Negotiation: back in the 1960s, Roy Brooks made his name and his fortune from honestly advertising the properties he sold. His adverts were very amusing, and apparently very successful – you can read about them here: http://www.moneymarketing.co.uk/remembering-roy-brooks-the-honest-estate-agent/128917.article. But in the subsequent 40 years, no agent – ever? – has sought to replicate his frank approach.
Second, back in the 80s, General Motors established its Saturn Division as a “different kind of car company”. The cars were sold from family-friendly “retailers” (not “dealerships”), uniquely on a no-haggle basis – the sticker price was the selling price. Saturn never achieved their sales targets, and the division failed and was closed. Now, GM’s strategy and their model line-up had multiple flaws – but again, nobody has since attempted to replicate this selling approach.
Perhaps these are opportunities, perhaps I am too cynical, and Mary is right. I hope that making surface changes to some small players will cause the big boys to improve their act, but I’m not banking on it. And as for the “flashmob” sequences at the end of each episode – what the hell was all that about?
Too many words today, and I’ve only sketched in my thoughts. I’m still grateful that we have retail coverage on the telly at all, though I wish the more measured BBC approach was still in place. As a sidebar, you can check out Mary’s poll of 12,000 online pollsters. The best customer experience in the UK… is Waterstone’s. And the rest fall into place very much as you might expect. http://www.maryportas.com/secretshopper/best-shops/