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KPMG: Mobile Technology to Decide High Street 'Battle'

By Graham Shone on February 14, 2012 9:02 AM | No Comments | No TrackBacks

KPMG have this week published research which indicates that retailers worldwide are beginning to come round to the view that effective implementation of mobile technology is eclipsing more traditional ways of generating business.

The research, compiled following a survey of 350 senior financial officers of global retailers and consumer brands, also indicates that a decrease in annual revenue is widely expected, with opinion varying from country to country on how far mobile technology can help to maximise sales.

The U.K. respondents appear to be the least enthused about the ability of mobile technology to deliver a much-needed boost to retail sales, with only 36% of the Britons surveyed stating that yes; the technology will drastically help improve sales over the next two years - compared with 46% in Germany, 44% in America, and 50% in India. 

Although it does indicate a lukewarm leaning towards the benefits of mobile transactions, those percentages seem incredibly low. Especially when considering further insight by KPMG published in September last year, which indicated that over 90% of financial services executives believed mobile payments were 'yet to go mainstream'. This is in spite of the fact that an estimated $3 billion worth of transactions were processed via mobiles last year - four times the amount for 2010.

What figures, then, can we expect when mobile transactions really take off? We could be looking at astronomical numbers - and it's then even more alarming to consider that less than four out of ten retail CFOs in this country remain, at present, unconvinced of its merits. Perhaps it's down to an inherent mistrust of new technologies, and 'Big Brother' paranoia thwarting appropriate progress in the fusion between the old and the new.

Do we, then, continue with the slow progression towards (and begrudging acceptance of) a coalescence of modern technology and traditional retail values; or do we do away with the myopia, and give mobile technology the chance it deserves in the immediate future to help resurrect a broken retail market?

I'd rather hope that more than 36% of retailers, agents and landlords in the U.K. would choose the latter.

Online success shines through Christmas results

By Annabel Dixon on January 12, 2012 5:57 PM | No Comments | No TrackBacks

This week has been quite a revealing week for the retail industry with some of the UK's biggest retailers producing their Christmas trading results.

 

There have been some clear successes. House of Fraser, John Lewis, Sainsbury's, New Look, SuperGroup, Debenhams, Majestic Wine, Foyles, Morrisons and JD Sports have all reported increased like-for-like sales figures.

 

But there was a more worrying picture being painted by the likes of Home Retail Group, Tesco, Mothercare, Halfords and Thorntons, which all flagged up falling sales. Some of these lacklustre results come despite widespread discounting in the run up to Christmas, which will have hit retailers' pockets.

 

A clear opportunity or warning sign (depending if your glass is half full or half empty) for both retailers and landlords to pick out of these results lies in the blossoming online sales figures. They helped some retailers push through a tough trading period.

 

John Lewis said: "Our very successful multichannel and online operations have been at the heart of John Lewis' performance. All three John Lewis markets were instrumental in driving sales in this area, with johnlewis.com outperforming its market and seeing 27.2% growth."

 

"As the 'Click and Collect' facility has proved to be so popular, from next month the number of collection outlets will more than double to 116, including collection points in 84 Waitrose branches, with more being planned."

 

Debenhams' like-for-like sales increased by 1.4% including VAT in the 18 weeks to 7 January 2012. However, its online business, which it says is a key component of its multi-channel offer, delivered like-for-like sales increase of 34.8%. 

 

Ellen Flood, retail expert from Shopow says: "The internet is developing as a key element of the retail landscape. Online shopping offers shoppers an incredible amount of choice, convenience and savings."

 

"What we will see this year is the evolution of the high street with leading retailers changing their approach, and in many cases their product lines, to reflect the tastes of the modern shopper."

Social Media: A Missed Opportunity?

By Graham Shone on December 6, 2011 4:17 PM | No Comments | No TrackBacks
Some intriguing research was published this week by BCSC, which investigated shopping centres' relationship with social media, and how retail schemes could better utilise such platforms to their future advantage.

By analysing primary data collected from shopping centre managers and social media users, BCSC were able to determine how effectively the two were interacting.

Some statistics published in the research were illuminating. When asked why they didn't follow a shopping centre on social media, a combined figure of 31% of the respondents said that they were either unaware of the scheme's on-line presence or had never considered it as a means of interaction. In addition, only 12% of shopping centre managers said that a dedicated social media executive was tasked with managing their on-line output, and less than half of the centres (42%) carry any written guidelines on social media usage.

These are just a few of the statistics that point to a missed opportunity for schemes to engage with customers on an increasingly popular platform. There seems to be a very clear and obvious dichotomy between what the public would want from a shopping centre via social media, and what those centres are currently providing. The malls seem to currently churn out repetitive marketing material, precipitating a swift click of the 'unfollow' button. People would, in fact, prefer malls to inform them of new store openings, upcoming events and news about improvements to the centre.

An issue that is brought up in defence of social media negligence is one of metrics. Malls find it difficult to quantify the benefit given to them by an increased on-line presence, and whether indeed it would be worth spending money improving their output on such sites in order to generate increases in revenue that may have arrived regardless. My view is that with some 175 million people people now using Twitter, and 400 million logging onto Facebook daily, is ignoring the potential of social media a risk that retailers and retail developments can afford to take?

The fact is, more and more people are harnessing the 'wisdom of crowds' provided by these sites to inform their choices when it comes to retail - and negative on-line publicity spreads like wildfire. Without active management of social media output, centres could find their reputations tarnished in the blink of an eye via a chatroom, hashtag, or an orchestrated on-line campaign. 

Read the full report on-line here.

Move over, Google, there's a new pop-up in town...

By Graham Shone on November 18, 2011 9:49 AM | No Comments | No TrackBacks
Yet another big name e-tailer has announced that it will be slinging itself into the murky waters of high-street retail as the countdown to Christmas brings even more ferocity to the battle for market share.
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On-line auction site eBay will be trialling a new pop-up store in Soho's Dean Street this December, and becomes the latest in a string of on-line retailers to announce a high-street presence. The store will open on December 1st, and close four days later as the internet giant tries to maximise profit from the busiest week of the year for web-based purchases.

I must say the eBay store sounds a great deal more civilised than I first imagined it. I envisaged a giant digital clock on the back wall, ticking down to the countdown theme as frenzied shoppers proffered increasingly ludicrous bids for a towel or crisp emblazoned with the image of Jesus. However, eBay doyens have rendered this pure fantasy by instead featuring barcoded images of more sensible products which, when scanned, direct a smart phone browser to eBay's pay-wall.

This means that by the end of this calendar year, we will have seen Ocado, Amazon, Google, Simply Be and now eBay debut their physical retail presence in high-profile destinations, whilst other big name brands have fully immersed themselves in the world of multi-channel retail. Surely a message to the market that the collision between on-line and high street shopping has now become a fusion; and news that even Tesco is leaning towards space-saving is as big an indicator as any.

Christmas Time, Mistletoe and....i-Helicopters.

By Graham Shone on November 3, 2011 9:56 AM | No Comments | No TrackBacks
So, back go the clocks - and like a Brussels sprout on Christmas day, festive adverts are now to be forced down our throats until December 26th. Joy unconfined for some, unnecessary shared bonhomie for others.

Falling into the latter "Scroogian" category, I have already stolen some coal and wrapped it in newspaper for my next of kin; but retailers competing in an increasingly brutal market have already begun clamouring for the attention of those less stringent, or 'despicable', if you like.

This November will see possibly the earliest ever beginning to the festive sales, as Hallowe'en decorations are quickly stashed away in favour of fake snow, reindeer and Christmas trees as the chosen adornment of shop windows. With the high street in desperate need of a seasonal boost - it's little wonder that brands are trying to get bargain shoppers in early this year.

The high street's major retailers will be competing fiercely with supermarkets - the latter enjoyed a 6.9% year-on-year growth in sales last Christmas; and it would be a brave man to bet against a similar outcome in 2011. Price sensitivity is the order of the day, and the larger stores can undercut the high street on this year's key toys and gadgets.

We may also see an increase in the propensity to shop on-line for gifts. John Lewis last year enjoyed a bumper period - with year-on-year on-line sales increasing by an incredible 42%. Horrific weather conditions last year were possibly the main reason for this, but I would also attribute the increase in internet shopping to simply not wishing to deal with queues or a last-minute dearth of in-store merchandise.

There is quite a conservative view on what this year's top sellers will be. The average RRP of a top ten children's gift is £47.20; for her, £19.89, and for him, £26.47 - a little under what I would have expected - although the average is heavily decreased in this case by the omission of an iPad 2, or a Kindle.

I would personally be ecstatic with a remote control helicopter - see here, although the coal will have to be eschewed in favour of more appropriate offerings. Where can you find good myrrh these days?







 

NSLSP Summary: Out-of-town on the rise...

By Graham Shone on October 28, 2011 1:22 PM | No Comments | No TrackBacks
CBRE have recently published their National Survey of Local Shopping Patterns (NSLSP) report, which indicates that although town centres still retain the majority of the population for comparison goods shopping, out-of-town destinations are slowly eating a larger chunk of the pie.

Analysing the period from 1998-2009, in which the population of the U.K. grew by 3.3 million, CBRE have identified which comparison goods trading locations have improved, and which have struggled out of over 3,000 destinations. 

Town centres have had their comparative market share reduced by around 4% in that time, despite the 1.64% increase in shopping population size. Out-of-town destinations, by contrast, now have an additional 9.6% of the population choosing them for comparison goods shopping - representing an increase in market share of an astounding 61%.

The survey cites three main causes of this paradigm shift, namely: retail mix change as a result of development activity; accessibility change brought about by transport innovations, and underlying population change. 

There is also an indication of a market squeeze, in which the top destinations will thrive, while others succumb to unfavourable market conditions. Of the new space developed in this period, 65% was in the top 200 locations, whereas 40% of other trading zones saw a loss of 4 million shoppers - the equivalent of £13 billion worth of trade disappearing.

Going forward, CBRE are adamant that fuel costs will have a more profound impact on retail than the internet. Shoppers currently tend to make fewer trips to larger centres but as fuel prices rise, we might see more and more affluent households deciding to stay at home to shop - following the lead of poorer households, who make up the majority of multi-channel consumers.

For an in-depth regional look at the winners and losers, see here.

House of Fraser Leads the Way for a Multi-Channel Future

By Graham Shone on October 21, 2011 10:28 AM | No Comments | No TrackBacks
The opening of House of Fraser's new click-and-collect store in Aberdeen today could be significant for a couple of reasons. Firstly, it is a major department store and leading high street retailer sacrificing 98,500 sq ft from their average unit size to engage fully with multi-channel retail. Secondly, and most importantly, it represents what could very well be the future of how customers and retailers interact.

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The emphasis is heavily on creating a relaxed atmosphere in a fashion boutique/internet cafe hybrid in which patrons can have a leisurely browse House of Fraser's extensive range of products on computers, interactive screens and iPads; all whilst enjoying free coffee and sitting in chairs comfortable enough to snooze in.

The logic behind this concept is that customers now wish to shop in-store as they would at home. Combining a homely, relaxing atmosphere with the highest calibre technology to produce a unique shopping experience is what House of Fraser hope will catapult them ahead of their rivals as the battle for profit margins intensifies in a now rather brutal retail market. Fashion retailer Oasis also seems to buy into this thinking after having opened its very own new concept store just off Oxford Street this week. Oasis also cite customer experience as being the reason for the move - abolishing queues for tills by introducing customised mobile iPads to process transactions throughout the store. The message seems to be clear: embrace technology or fall behind.

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We have also recently seen Ocado trial a shopping wall at One New Change, and as technology develops into as important a part of retail as bricks and mortar, what price a Shanghai-style subway shopping wall adorning Holborn tube station in the near future? It is certainly pleasing to see such a propensity from retailers to engage with technology, rather than fear it. Amazon have also entered the multi-channel ballpit, installing lockers at the St. Paul's mall, among other places, wherein customers can collect their purchases.

For House of Fraser, this will undoubtedly be one of their most scrutinised stores in terms of performance - not just by HoF bosses, but by retailers nationwide. Following their lead, we may well see other department stores, retailers and possibly even supermarkets rolling out identikit store designs as click-and-collect becomes the definitive way in which consumers re-align their loyalties to brands post-recession. Looking even further ahead, this may well reflect how town centres and shopping malls are designed, as the impact of the reduction in necessary floorspace is felt by landlords and developers alike.







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