Marks & Spencers slides down the retail mountainThe clothing, food and homeware retailer is set to close an estimated 100 shops by 2022. Sales were down 2.2% for the last six months, and food sales fared even worse, dropping to 2.9%. Clothing and homeware sales reported a similarly dismal 1.1% decline.
“Trading conditions for the remainder of the financial year will remain challenging. We are expecting little improvement in our sales trajectory.” – Marks & SpencerNow before SME retailers heave out a sigh and say, ‘If M&S isn’t doing well, how can we hope to survive!’. – Well, you can, and by learning from their mistakes.
New Look, a ‘value’ high-street brand that’s not delivering the goodsSimilar to M&S, the high-street clothing brand is facing a similar threat of en-masse store closures, as well as a 3.7% sales slump up to 22 September this year.
“Clearly the wider retail environment remains challenging and we are not expecting that to change anytime soon.” – Alistair McGeorge, New LookNot exactly words of steely optimism from New Look’s executive chairman is it?
John Lewis chairman steps down todaySir Charlie Mayfield, the chairman of John Lewis, has announced he’s stepping down from his position today, and will officially leave by 2020. Funny that this date coincides with the store closure plans of many high-street retailers?
“He has been at the helm over many years of growth at the business, but more recently John Lewis has struggled to cope with rising costs, higher business rates and a weaker pound.” – BBC NewsHis announcement comes as a probable result of the shocking 99% fall in half-year profits the stores experienced in September this year. The overall profit decline for the brand has been notable, revealing a fall from £95m to just £1.2m during the last 6 months.
What can SMEs learn from these high street failures?Once upon a time, budding entrepreneurs, and especially those in the retail industry, would look to industry giants such as John Lewis with admiration. But now, in the digital age, nationwide high street chains are more the out-dated ‘dinosaur’ in the room of British retail.
“Big, heritage brands just look dated, slow and lack an image of innovation.” – Jeremy Schwartz, PandoraNow before you balk at Schwartz’s comment about bulky old high-street brands, the man has worked for high street stalwarts such as Sainsbury’s and the Body Shop (formerly it’s Chief Executive), so I think he knows a thing or two about the difficulty these brands are experiencing in trying to modernise to suit the contemporary consumer palette.
“Customers are looking for both authenticity and modernity, unbelievable value but also luxury.” – Jeremy Schwartz, PandoraDoes his comment sound a bit contradictory? Well, for SMEs making authentic products based in Britain, there is a global demand for brand authenticity and craftsmanship:
“British goods are definitely high on quality. But they are also high on price. So it was about making it competitive enough to match the world market. British products have a lineage, they have a history.”– Siddharth Shankar, Tails Trading[article id=”124835″ title=”British goods still have value”]
Keep original but keep up with digital trendsSo what other advice do the likes of Schwartz have for retail SMEs offering quality British made products who have a physical as well as an online presence?
“Choose one particular product category and really go to town, create a ‘palace of couture’, but also offer value basics. The alternative is slow, or even accelerating decline.” – Jeremy SchwartzSMEs can and must hold on to their brand originality. Whilst consumer spending habits have changed, and whilst customers can go online for a ‘quick-fix’ experience, traditional retailers can do more to put further thought into the customer experience within their stores.
“There are hundreds of High Streets in Britain but only one has a got Harrods on it. I think there’s a message there.”If you have any sort of physical store, check out the article below to find out how your SME can compete with online retailers. [article id=”126506″ title=”The high street can compete with e-commerce”]
– Richard Hyman, retail industry expert
Brand consistency and valuing your cornerstone customer baseWhilst the high-street has been ‘shopping around’ and seeking to change their brand identities to deal with the decline in high-street spending, (cue Marks & Spencer’s unsuccessful attempt to go ‘young and trendy’ in its clothing brands), they instead risked alienating their cornerstone customer base, namely the largely female over 55’s looking for practical, comfortable and high-quality clothing. You can learn from their misguided move. If you offer a singular good or service, all the better. – Structure your branding and it’s associated messaging around what you offer, don’t dilute your message or outreach to keep up with trends if you have a committed audience that buys what you sell. Instead, expand upon and accelerate it instead using digital tools like social media to reach them better.
“Don’t go clutching at a series of fashionable straws to appeal to every sort of customer, if you do this, you won’t reach any of them well.”If you don’t already, ensure you know who these cornerstone customers are via ingrained marketing and paid search campaigns. If you know who exactly engages with your ads, products, or services, you can design strategies that encourage them to engage even more.
Link social to your retail siteAlso if you do have a physical store, don’t let all the chat about the ‘death of the high-street’ make you feel ashamed of it. Instead use social media to link your physical retail space with your customers online, and make it a destination for them to engage with and visit.
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